The formula, step by step
First, Medicare counts the full months you went without creditable drug coverage after you were first eligible. Each month adds 1%, so a full year adds 12%.
Next, it multiplies that percentage by the national base beneficiary premium, which is $38.99 in 2026. Then it rounds to the nearest $0.10. Our Part D penalty calculator does the math for you.
| Step | 2026 | 2027 |
|---|---|---|
| Months uncovered | 14 | 14 |
| Penalty percentage | 14% | 14% |
| National base premium | $38.99 | $41.33 |
| Before rounding | $5.4586 | $5.7862 |
| Monthly penalty (nearest $0.10) | $5.50 | $5.80 |
Why the penalty changes every year
Your percentage never changes, but the base premium does. For 2027 the base rises to $41.33. The same 14% penalty becomes 14% × $41.33 = $5.79, rounded to $5.80 a month.
The penalty is added to your plan premium for as long as you have Medicare drug coverage. Switching plans does not remove it.
The 63-day rule and how to avoid it
The penalty can apply even if you signed up on time. Going 63 days or more in a row without creditable drug coverage triggers it. This often catches people who leave an employer plan.
Keep proof that your employer or union drug coverage was creditable. If you qualify for Extra Help, you generally won't pay the penalty. Our enrollment period finder shows your sign-up dates.