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Updated August 1, 2026. Quick answer: the Part D penalty is 1% of the national base beneficiary premium for every full uncovered month — $38.99 in 2026 — and it is permanent. Three years without creditable drug coverage is $14.00 a month, $168.00 a year, $3,360.00 over twenty years. Unlike Part B it counts every month, not full years, so there is no threshold to duck under.
The calculator
The trap is that healthy people opt out
Part D is drug coverage. If you take no prescriptions at 65, buying it feels like paying for nothing, and skipping it is the obviously rational move. It is the single most common way this penalty is earned — by people making a considered decision with one piece of information missing, which is that the meter is running.
What stops the meter is creditable coverage, and the definition is broader than most people assume:
“Prescription drug coverage that’s expected to pay, on average, at least as much as Medicare drug coverage. This could include drug coverage from a current or former employer or union, TRICARE, Indian Health Service, VA, or individual health insurance coverage.”
Employer and union drug coverage, TRICARE, the VA and Indian Health Service all commonly qualify. Your plan is required to tell you in writing each year whether its coverage is creditable. That notice is the document to keep, because it is what you will be asked for.
Coverage timing is one piece of the retirement decision
A penalty figure tells you what a timing choice costs, not how that choice sits next to the accounts, the income you plan to report and the years ahead, and an adviser can look at those together with you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
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It asks about nine questions (age, investable assets, location), then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button. Submitting the form does not guarantee an adviser or a match. This matching form is not tax or legal advice. Submitting the form does not guarantee an adviser or a match. This matching form is not tax or legal advice.
Why the number moves
The penalty is a percentage of the national base beneficiary premium, which CMS resets every year. It is $38.99 for 2026. So the penalty you are quoted is not frozen at the figure above — it is recalculated against each year’s base, and drifts upward with it. The count of uncovered months, however, is fixed forever on the day you enrol.
Two penalties, two different shapes
| Part B | Part D |
|---|---|
| 10% per full 12 months | 1% per single month |
| Percentage of the standard premium ($202.90) | Percentage of the base beneficiary premium ($38.99) |
| 11 months late costs nothing | Every month counts from the first |
The Part B side is the larger number in most real cases, because it is a percentage of a much larger premium.
Where this sits
If you are still working past 65, whether any of this applies to you at all depends on your employer’s headcount. And if you contribute to an HSA, there is a separate and more expensive timing trap: Medicare backdates, and your contributions become excess retroactively.
Penalty formula and the 2026 national base beneficiary premium from medicare.gov, read August 1, 2026. The underlying CMS release publishing the base premium was not reachable directly, so medicare.gov is cited as the source. Figures change annually. General information, not advice.