what happens if i dont have medicare part d

What Happens If I Don’t Have Medicare Part D?

When you enroll in Medicare, you might be wondering if you need drug coverage as part of your health insurance.

While enrollment in Medicare Part D isn’t mandatory, you will have to pay a penalty if you don’t obtain creditable prescription drug coverage during the Initial Enrollment Period and you lack other creditable coverage for a period of more than 63 consecutive days. Creditable coverage can be obtained through a current or former employer, Tricare, the Department of Veterans Affairs, and some retiree plans.

This article outlines the penalties you’ll face without Part D coverage.

Do You Need a Prescription Drug Plan?

As a reminder, you are eligible to enroll in the Medicare government program during a period that spans three months prior to your birthday month, your actual birthday month, and three months later for a total period of seven months.

You can also add Medicare prescription drug coverage during the Medicare open enrollment period during the first quarter of each calendar year.

The question, however, is if you need prescription drug coverage or you can simply pay out of pocket for your prescriptions as needed.

There are four things to consider:

  1. Even if you don’t have an immediate need for a prescription drug plan, your health could change in the future, making paying for prescriptions costly.
     
  2. There are limited times of the year when you can join a Medicare Part D plan (or equivalent) for prescription drug coverage.
     
  3. You will accrue penalties for each month that you don’t have prescription coverage, and this amount will be added to your monthly premium. Depending on how long you go without prescription coverage, the late enrollment penalty could add a substantial amount to your monthly premium.
     
  4. The cost of a Medicare drug plan is nominal compared to the cost of paying for prescriptions, so it’s smart to get creditable drug coverage. 

Changes You Can Make to Your Medicare Plan

If you missed signing up for Medicare Part D during the initial enrollment period, you can add Medicare drug coverage to your health insurance later, typically during the annual election period that starts in October.

There are other eligible periods where you can make adjustments to your coverage, including the following:

  • If you already have a Medicare Advantage plan, you can switch plans. As a reminder, Medicare Advantage includes the benefits of Original Medicare (including Medicare Part A and Medicare Part B). Further, most Medicare Advantage plans include additional health benefits along with a Part D plan.  
     
  • You can also get rid of a Medicare Advantage plan and revert back to Original Medicare. From here, you can add drug coverage.  
     
  • You can add a Medicare Part D plan during the open enrollment period from January 1st through March 31st.

Is There a Penalty for Not Having Medicare Part D?

The short answer is yes. If you cannot demonstrate that you have creditably prescription drug coverage for a period of 63 consecutive days, then you will be subject to a monthly penalty when you do finally enroll in Medicare drug coverage.

The longer you wait to get creditable coverage through a Medicare drug plan, the more you will have to pay in monthly premiums. When you add the ever-rising cost of prescription drugs and compare it to the average cost of a Part D premium, then it makes financial sense to ensure you enroll in a drug plan. This coverage can protect your health and your pocketbook.  

Calculating the Medicare Part D Late Enrollment Penalty

If you are in a situation where you have to pay a late enrollment penalty because your Medicare plan doesn’t include prescription drug coverage and you don’t have this coverage through an employer or other source, you might be wondering exactly how much you’ll have to pay in additional premiums.

Keep in mind that the late enrollment penalty is cumulative, and it can become significant if you incur several uncovered months of Part D coverage.

Further, the late enrollment period is permanent, so you will continue to pay the penalty forever. This is true even if you later change your Medicare plan coverage during a special enrollment period or some other time.

Medicare calculates the penalty based on the “national base beneficiary premium.” As of 2023, the national average premium is $32.74, so the national base beneficiary premium is 1% of this amount multiplied by the number of months you have incurred without creditable prescription drug coverage. The figure is then rounded to the nearest $0.10 to come up with the Part D penalty.

Here’s an example of how this late enrollment penalty would be added to your monthly Part D premium:

John Doe decided to enroll in Original Medicare (which includes Part A and Part B), but he elected not to get a prescription drug plan because he was in peak physical health and did not take any prescriptions. However, he later learned that there are late enrollment penalties for not having creditable prescription drug coverage, so he decided to add a Part D prescription drug plan to his Medicare program.

However, John Doe was without a Part D drug plan for 20 months. John Doe’s additional premium penalty is calculated as follows:

  • .20 (The number of months without coverage at 1% each month) x $32.74 (the current year base beneficiary premium = $6.55
  • Rounding to the nearest $0.10, John Doe would pay an additional $6.60 each month for Part D when he finally enrolls.

Challenging the Late Enrollment Penalty

If you disagree with how Medicare calculates your late enrollment penalty, you can ask for a reconsideration by filling out a form and returning it to the proper department. This action must be taken within 60 days of being informed that you have to pay the penalty. 

Conclusion

It’s recommended to get creditable prescription drug coverage as soon as possible, whether it is during the initial enrollment period or Medicare Open Enrollment, to avoid paying the penalty on your monthly premiums. For the most up-to-date and accurate information, contact a Medicare advisor.

5 Most common Questions About Medicare Part D

If I don’t take any drugs or my drugs are super cheap without insurance why do I have to enroll in a Part D drug plan?

A. Medicare Part D is completley optional and you donot have to enroll in a plan. However Medicare does want everyone to participate in the Part D program even if you feel like its a waste of money. The center of Medicare & Medicaid services has designed the Part D program with very specific enrollment time frames and if you do not enroll when first eligible you will be accessed a penalty of 1% of the average cost of a part D plan for each month you are not enrolled. It is also importan to know you can’t just enroll in a drug plan whenever you want there must be a valid enrollment period.

Will all my prescriptions be covered?

Yes, most people will have to pay for Medicare part B the base premium for 2022 is $170.10. Some people may pay more based on their income. Medicare has established a sliding scale. Click here to learn more.

Why do I need to get extra coverage?

Medicare Part D carriers usually use a committee to create each plans formulary. While they will cover at least two drugs in every therputic prescription classification it does not mean they will cover all drugs. Mmost states offer close to 20 options for drug plans and you can usually find a plan that covers your specific needs. If you do not there are appeals process you can follow to try and get your drug added on for you.

 

I only take generic drugs will I still have to pay a deductible?

A. Some plans have deductibles and others do not. Typically plans with lower premiums have higher deductibles and plans with higher premium have low or NO deductible. Most of the time generic drugs will fall under no deductible needing to be met, but not always. So make sure you double check before you assume your generic will not have a deductible phase.

I am diabetic and take insulin will all my diabetic supplies be covered?

Yes all of your diabetic supplies will be covered, but they are covered under part B of medicare under the category of durable medical equipment.

When do I enroll in Medicare?

A. For most people Medicare enrollment should happen during your initial enrollment period, which begins three months before you turn 65 and runs three months after the month you turn 65. There are several different special election periods as well depending on your circumstances. Click here to learn more

Can I change my Part D plan?

A. Yes you can change your part D plan, typically its allowed to be done Octobet 15th- December 7th during the Medicare Annual election period. There may be a special election period depending on your situation that allows you to change your plan other times of the year.

What Is Medicare Part B and What Does It Actually Cover?

The complete guide to Medicare’s medical insurance — every service it covers, exactly what it costs in 2026, how it works with group insurance and VA benefits, and the excess charges most people have never heard of until they get a surprise bill.

The Short Answer

Medicare Part B is medical insurance — it covers doctor visits, outpatient care, preventive services, durable medical equipment, and more. Unlike Part A, Part B is not premium-free for anyone: everyone pays a monthly premium (202.90in2026formostpeople),anannualdeductible(283), and 20% coinsurance on most covered services, with no yearly cap on that 20% under Original Medicare alone. Whether you need to enroll at 65, and whether delaying is safe, depends heavily on your employment status and your employer’s size — getting this wrong is one of the most consequential and permanent mistakes in all of Medicare.

Key Takeaways

What Part B Actually Covers

While Part A handles hospital room and board, Part B is the half of Original Medicare that covers medical care and most services delivered outside a hospital admission — doctor visits, outpatient procedures, and ongoing medical needs.

What’s covered

Preventive services: the part Medicare gets genuinely right

Most preventive services are covered at 100%, with no deductible and no copay, as long as your provider accepts Medicare assignment. This includes:

Paul’s Honest Take: This is one of the most underused parts of Medicare, full stop. I’ve had clients who paid for a private physical every year out of habit and never realized their annual wellness visit through Medicare was completely free. If you haven’t used your Welcome to Medicare visit or your annual wellness visit, that’s real value sitting on the table.

What’s NOT covered

Paul’s Honest Take: The dental and vision exclusions are the ones that surprise people most, especially since they’re such routine parts of healthcare for most adults. This is exactly why so many Medicare Advantage plans build dental, vision, and hearing benefits into their coverage — Original Medicare was simply never designed to include them, and that gap doesn’t go away on its own.

What Part B Costs in 2026

Part B has three separate cost components, and understanding all three matters:

Cost Component

2026 Amount

Standard monthly premium

$202.90

Annual deductible

$283

Coinsurance on most covered services

20%

The premium is deducted automatically from your Social Security check if you’re already collecting benefits. If you’re not yet collecting Social Security, you’ll receive a bill, typically every three months.

The deductible works differently than Part A’s — it’s a straightforward annual figure. You pay the first $283 of Medicare-approved outpatient costs each calendar year, and then Medicare’s cost-sharing kicks in.

The coinsurance is where the real risk lives. After your deductible is met, Medicare pays 80% of the Medicare-approved amount for most covered services, and you’re responsible for the remaining 20%. There is no yearly cap on this 20% under Original Medicare alone. If you have a $100,000 course of cancer treatment, your 20% share is $20,000 — unless you have a Medigap policy or Medicare Advantage plan absorbing that cost.

Paul’s Honest Take: I put this in bold because it’s genuinely the single most important number in this entire guide. That uncapped 20% is the whole reason Medigap and Medicare Advantage exist as products in the first place. Original Medicare by itself was never designed to protect you from a truly expensive year — it was designed to cover 80% of it and leave the rest to you.

IRMAA: What Higher Earners Actually Pay

If your income is above certain thresholds, you’ll pay more for Part B through the Income-Related Monthly Adjustment Amount (IRMAA) — based on your tax return from two years prior. For 2026, that means your 2024 income determines your premium tier.

2024 Income (Individual)

2024 Income (Married, Joint)

Total Part B / Month

$109,000 or less

$218,000 or less

$202.90

$109,001 – $137,000

$218,001 – $274,000

$284.10

$137,001 – $171,000

$274,001 – $342,000

$405.80

$171,001 – $205,000

$342,001 – $410,000

$527.50

$205,001 – $499,999

$410,001 – $749,999

$649.20

$500,000 and above

$750,000 and above

$689.90

At the top tier, you’re paying more than three times the standard premium. If your income has recently dropped — retirement, the loss of a spouse, or certain other life-changing events — you can appeal your IRMAA determination using Form SSA-44.

Do You Have to Enroll? And What Happens If You Don’t?

Technically, Part B is optional — Medicare won’t force you into it. But opting out without a valid alternative is genuinely risky, because of how the penalty structure works.

If you don’t sign up during your Initial Enrollment Period (the 7-month window around your 65th birthday) and you don’t have qualifying employer coverage, you’ll face a permanent 10% penalty added to your premium for every full 12-month period you went without Part B. That penalty doesn’t expire — you pay it for as long as you have Part B, which for most people means for the rest of your life.

Example: If you delayed enrollment by 24 full months without a valid exception, you’d pay an extra 20% on top of the standard $202.90 premium in 2026 — roughly $40.58 more, every month, permanently.

How Part B Works with Group Insurance

Just like Part A, whether you can safely delay Part B without penalty comes down to one specific number: how many employees your company has.

Companies with 20 or more employees: If you or your spouse are actively working and covered by a genuine group health plan, your workplace insurance is primary, and you can legally delay Part B without any penalty. When that employment or coverage eventually ends, you get an 8-month Special Enrollment Period to enroll in Part B penalty-free.

Companies with fewer than 20 employees: Medicare automatically becomes your primary insurer at 65, regardless of your employment status. You need to enroll in Part B right on schedule. If you don’t, your small employer’s plan can legally refuse to pay claims that Medicare should have covered first — potentially leaving you responsible for the full cost.

Paul’s Honest Take: I say this in nearly every guide I write, because it’s genuinely one of the costliest misunderstandings I encounter: “I have good coverage at work” and “I’m protected from Medicare’s enrollment deadlines” are two completely different statements, and whether the second one is true depends entirely on your employer’s size — not how generous the coverage feels. Confirm the actual employee count before you decide to delay anything.

Retiree Coverage Is Not the Same as Active Employer Coverage

This is a distinction that catches a genuinely large number of people off guard: the “20 or more employees” exception only applies to active employment. If you retire and your former employer offers you retiree health benefits — sometimes a genuinely good, comprehensive plan — that coverage does not create a Special Enrollment Period the way active group coverage does, and it does not exempt you from enrolling in Part B on time.

Paul’s Honest Take: I’ve seen this mistake more than once, and it’s an especially painful one because it happens to people who did everything right during their working years. Someone retires with a strong retiree health plan from a large employer, assumes it works the same way their active coverage did, and delays Part B — only to find out later that retiree coverage was never a valid reason to delay in the first place. The moment you stop actively working, that clock starts, regardless of how good your retiree plan looks on paper. If you’re retiring and keeping employer retiree benefits, treat enrolling in Part B as something to handle right on schedule, not something retiree coverage lets you postpone.

Why You Need Both Part A and Part B for Medigap or Medicare Advantage

Here’s a foundational requirement worth understanding clearly, since it shapes every other coverage decision in Medicare: you must be enrolled in both Part A and Part B before you can buy a Medigap policy or enroll in a Medicare Advantage plan. Neither product exists as a standalone substitute for Original Medicare — both are built specifically to work alongside it.

Paul’s Honest Take: This surprises people who assume they can somehow “skip” Part B and go straight into a Medicare Advantage plan to avoid the extra premium. It doesn’t work that way — Part B enrollment, and its premium, is a prerequisite either way, whether you end up on Original Medicare with Medigap or on a Medicare Advantage plan. There’s no path through Medicare that avoids the Part B premium once you’re actually using the system.

Does Medicare Work If You’re a Veteran?

Yes — and if you have VA health benefits, understanding how the two systems relate is genuinely important, because they work differently than most people assume.

Medicare and VA benefits do not coordinate. These are two entirely separate systems that each pay only for care received within their own network. Medicare doesn’t pay for care you receive at a VA facility, and VA benefits don’t pay for care you receive from a non-VA doctor or hospital. You, the veteran, choose which system to use each time you seek care.

Here’s the critical point: having VA benefits does not exempt you from Medicare’s enrollment deadlines. VA coverage is not considered a qualifying reason to delay Part B without penalty. If you don’t enroll in Part B during your Initial Enrollment Period and you’re relying solely on VA benefits, you can still trigger the permanent late enrollment penalty.

Why the VA itself recommends enrolling in Medicare anyway:

Paul’s Honest Take: This is one of the most common misconceptions I run into with veterans specifically, and it’s an expensive one to get wrong. Good VA coverage feels like it should be enough, and it might genuinely handle most of your care — but it doesn’t protect you from the Part B enrollment clock the way employer coverage from a large company can. The VA itself actively encourages enrolling in Medicare Parts A and B for exactly this reason. If you have VA benefits and are approaching 65, this is worth a direct conversation before you assume you’re covered.

Veterans who enroll in Part B can also purchase a Medigap policy, which can be particularly valuable if you use non-VA providers regularly — though if you primarily rely on VA facilities for most of your care, the value of an added Medigap policy may be more limited, and worth weighing carefully.

How Long Does It Actually Take to Get Part B Approved?

This is one of the most practical, and most overlooked, pieces of planning — especially if you’re leaving a job after 65 and coordinating your Part B start date around the end of your employer coverage. Applying isn’t instant, and the timeline depends heavily on which enrollment window you’re using.

Enrollment Situation

Typical Processing Time

When Coverage Actually Starts

Initial Enrollment Period (around 65)

2–4 weeks, sometimes up to 6

1st of your birthday month (if applied in the 3 months before) or 1st of the month after you apply (if applied during or after your birthday month)

Special Enrollment Period (leaving employer coverage)

4–8 weeks, sometimes longer

1st of the month after your application is submitted

General Enrollment Period (Jan 1–Mar 31, missed window)

4–6 weeks

1st of the month after you apply

Why the Special Enrollment Period takes longer: applying after leaving employer coverage requires two forms, not one — Form CMS-40B (the actual Part B application) and Form CMS-L564 (Request for Employment Information), which your employer needs to complete to verify you had qualifying coverage. Social Security has to manually review both, which is exactly why this route consistently takes longer than a standard Initial Enrollment Period application.

Paul’s Honest Take: This timeline question comes up constantly with clients who are retiring or leaving a job after 65, and it deserves real attention — not just because of the penalty risk we’ve already covered, but because a slow approval can leave you with an actual gap in coverage if you time it too tightly. My standard advice: start this process at least 2 to 3 months before you need Part B to actually begin, not the week your employer coverage ends. If your former employer is slow to complete their portion of Form CMS-L564, that alone can hold up the entire application — so it’s worth following up with your HR or benefits department directly rather than assuming it’s been submitted.

Practical tips to avoid delays

Excess Charges: The Cost Almost Nobody Knows to Ask About

Here’s a detail that surprises even people who’ve been on Medicare for years: not every doctor who accepts Medicare agrees to accept Medicare’s approved amount as full payment.

Providers fall into three categories:

How excess charges actually work: if the Medicare-approved amount for a service is $300 and you see a non-participating provider, they can legally charge up to an additional $45 (15%) on top, for a total bill of $345 — and that excess amount doesn’t count toward your Part B deductible.

Eight states currently prohibit or limit excess charges entirely: Connecticut, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and Vermont. If you live in one of these states, you’re generally shielded from excess charges from providers within your state — though you could still face them if you receive care from a non-participating provider elsewhere.

Paul’s Honest Take: This is exactly why Medigap Plan G matters so much for people who want maximum flexibility. Plan G covers excess charges in full — Plan N does not. If you’re the kind of person who wants the freedom to see any doctor without worrying about billing surprises, that distinction is worth understanding clearly before you pick between the two. And regardless of which plan you choose, it’s always worth asking a new provider directly whether they accept Medicare assignment before your first appointment.

The HSA Rule: Part B Closes the Door Too

If you’re hoping to keep contributing to a Health Savings Account, know this clearly: enrolling in Part B — or any part of Medicare — ends your ability to make new HSA contributions. This isn’t unique to Part B; it applies the moment you enroll in Medicare in any form, including premium-free Part A.

If keeping your HSA active matters to you, the only way to legally delay both Part A and Part B is through qualifying employer coverage — which, as covered above, generally requires an employer with 20 or more employees. And because Part A enrollment can be backdated up to 6 months once you do enroll, it’s smart to stop HSA contributions 6 months before you plan to sign up for Medicare or file for Social Security, whichever comes first.

Frequently Asked Questions

Is there a cap on what I’ll pay for Part B services in a year? Not under Original Medicare alone — the 20% coinsurance has no yearly limit. A Medigap policy or Medicare Advantage plan is what actually caps your exposure.

What happens if I don’t sign up for Part B on time? You’ll generally face a permanent 10% penalty on your premium for every 12-month period you went without coverage, unless you qualify for a Special Enrollment Period through active employer coverage.

Do I need Part B if I have good coverage through a small employer? Almost certainly yes. If your employer has fewer than 20 employees, Medicare becomes your primary insurer at 65 regardless of your job coverage, and not enrolling can leave you exposed to unpaid claims and a lifelong penalty.

Do veterans need Medicare Part B if they have VA benefits? Generally, yes. Medicare and VA benefits don’t coordinate — each only pays for care within its own system — and VA coverage doesn’t exempt you from Medicare’s enrollment deadlines or penalties.

What is a Part B excess charge? An additional charge, up to 15% above the Medicare-approved amount, that a non-participating provider can legally bill you. It doesn’t count toward your deductible, and only Medigap Plan G (among current plans) covers it in full.

Can I keep contributing to my HSA if I enroll in Part B? No. Enrolling in any part of Medicare, including Part B, ends your HSA contribution eligibility going forward.

How long does it take to get approved for Part B? It depends on the enrollment window. Initial Enrollment Period applications typically process in 2–4 weeks. Special Enrollment Period applications, used when leaving employer coverage, generally take 4–8 weeks since Social Security must manually verify your prior coverage using Form CMS-L564. Start the process at least 2–3 months before you need coverage to begin, especially when coordinating around a job ending.

The Bottom Line

Part B is the half of Medicare that covers your everyday medical care — and it’s also where the real financial exposure of Original Medicare lives, thanks to that uncapped 20% coinsurance. Whether you should enroll at 65, whether you can safely delay, and how much of that exposure you’re carrying all depend on details specific to your situation: your employer’s size, your income, your VA status, and which doctors you actually see.

If you want help sorting out exactly how Part B applies to your specific circumstances — or want to understand how Medigap or Medicare Advantage could close that uncapped coinsurance gap — that’s exactly the conversation I have with clients every day, at no cost to you.

Call 631-358-5793 or visit paulbinsurance.com to set up a time to talk it through.

Paul Barrett, CMIP, is the founder of The Modern Medicare Agency, based in Melville, NY, and has spent 18+ years exclusively helping people navigate Medicare — never life insurance, never annuities, just Medicare. He’s licensed in 37 states, represents more than 40 carriers, and has personally helped over 5,000 clients choose coverage that actually fits their lives.

Figures current as of 2026 and sourced from CMS, Medicare.gov, and the Social Security Administration. Individual circumstances vary, especially around employer coverage, VA benefits, and income-based premiums — always verify your specific situation before making enrollment decisions.

Sources

Related Post

Scroll to Top