Medicare Part D Penalty Calculator for Colorado

How the Part D late enrollment penalty is figured

Part D penalizes by the month rather than the year. Medicare.gov sets it at 1% for each month you go without Part D or other creditable drug coverage, once a break reaches 63 days in a row after your Initial Enrollment Period.

Unlike the Part B surcharge, the Part D penalty appears inside the monthly premium you pay your drug plan, using a determination from Medicare about your uncovered months.

1. Count the uncovered months: those after your Initial Enrollment Period with no Part D plan, no Medicare Advantage drug coverage and no other creditable coverage.
2. Apply the 63-day test. A break of 62 days or fewer adds nothing. At 63 days or more, every uncovered month counts.
3. Multiply the months by 1% of the national base beneficiary premium, $38.99 in 2026 (CMS).
4. Round to the nearest ten cents and add it to whatever your plan charges.
5. Recalculate yearly. The percentage never changes, but the base premium does, so the dollars move.

Part D penalty misunderstandings

• Skipping Part D because you take nothing. The penalty measures time without coverage, not prescriptions. One diagnosis later, the surcharge is permanent.
• Assuming every drug benefit is creditable. Many employer, union, VA and TRICARE plans qualify; some do not. Keep each yearly creditable coverage notice as proof.
• Leaving a gap when switching. Coming off a job plan? A break of 63 days or more starts the count, so set the new plan’s start date first.
• Accepting a penalty you think is wrong. You can ask for a reconsideration. Act promptly and send your notices.
• Overlooking Extra Help. People who qualify for Extra Help generally pay no Part D penalty (Medicare.gov).
• Thinking Medicare Advantage sidesteps it. If your Advantage plan includes drug coverage, the penalty is added to that plan’s premium. Picking a plan without drug coverage does not stop the clock.

Drug coverage help for Coloradans

Extra Help is the federal program that removes the penalty and lowers drug costs. Medicare.gov lists 2026 limits of $23,940 in income and $18,090 in resources for one person, or $32,460 and $36,100 for a married couple. You get it automatically with full Health First Colorado (Medicaid) coverage, a Medicare Savings Program, or SSI.

In Colorado, Medicare Savings Programs are applied for through your county Department of Human Services (HCPF), and qualifying brings Extra Help with it.

Stand-alone drug plans are sold statewide. The CMS 2027 landscape file lists 8 for Colorado, with monthly premiums from $5.30 to $260.20. Any penalty is added on top of whichever premium you choose.

Colorado’s State Health Insurance Assistance Program (SHIP), run by the Colorado Division of Insurance, gives free, unbiased Medicare counseling at 888-696-7213.

Key terms: Part D penalty calculator

National base beneficiary premium

A CMS benchmark, $38.99 for 2026, used to compute penalties. It is not the price of any real plan.

Creditable coverage

Drug insurance expected to pay, on average, at least as much as standard Part D.

Creditable coverage notice

The yearly letter employers, unions and plans send stating whether your drug benefit qualifies.

Reconsideration

A review you can request when you believe a plan applied the penalty in error.

Extra Help

The federal Low-Income Subsidy for Part D, which trims premiums and copays and removes the penalty.

What to collect before disputing or estimating a Part D penalty

• Every creditable coverage notice you have kept.
• Start and end dates for employer, union, VA or TRICARE drug benefits.
• Current medications, strengths and preferred pharmacy.
• The penalty letter or plan notice, if one has arrived.