Late Enrollment Penalty
This is a sum of money added to your monthly premium for a Medicare Part D prescription drug plan. If you go for any continuous period of 63 or more days after your initial enrollment period is over, without having prescription drug coverage, you may owe a late enrollment penalty. The cost of the penalty depends on how long you went without prescription drug coverage. The penalty is calculated by multiplying 1% of the national beneficiary premium times the number of full uncovered months you didn’t have prescription drug coverage. This number is rounded to the nearest $.10. In general you will have to pay this monthly penalty as long as you have a Medicare drug plan. You may ask for a reconsideration within 60 days of the date on the letter telling you that you owe the penalty, if you don’t agree with the penalty.
Susan did not get prescription drug coverage until four months after her initial enrollment period ended therefore she had to pay the late enrollment penalty.