Medicare drug coverage  helps pay for prescription drugs you need. Even if you don’t take  prescription drugs now, you should consider getting Medicare drug  coverage. Medicare drug coverage is optional and is offered to everyone  with Medicare. If you decide not to get it when you’re first eligible,  and you don’t have other creditable prescription drug coverage (like  drug coverage from an employer or union) or get Extra Help, you’ll  likely pay a late enrollment penalty if you join a plan later. Generally, you’ll pay this penalty for as  long as you have Medicare drug coverage. To get Medicare drug coverage,  you must join a Medicare-approved plan that offers drug coverage. Each  plan can vary in cost and specific drugs covered.  

1. Medicare drug plans. These plans add drug coverage to Original  Medicare, some Medicare Cost Plans, some Private Fee‑for‑Service plans,  and Medical Savings Account plans. You must have Medicare Part A (Hospital Insurance) and/or  Medicare Part B (Medical Insurance) to join a separate Medicare drug plan.

2.  Medicare Advantage Plan (Part C) or other  Medicare Health Plan with  drug coverage. You get all of your Part A, Part B, and drug coverage,  through these plans. Remember, you must have Part A and Part B to join a  Medicare Advantage Plan, and not all of these plans offer drug  coverage.

Part D late enrollment penalty 

The late enrollment  penalty is an amount that's permanently added to your Medicare drug  coverage (Part D) premium. You may owe a late enrollment penalty if at  any time after your Initial Enrollment Period is over, there's a period  of 63 or more days in a row when you don't have Medicare drug coverage  or other  

creditable prescription drug coverage . You’ll generally have to pay the penalty for as long as you have Medicare drug coverage.

Learn how to avoid the late enrollment penalty.

Note If you get Extra Help, you don't pay the late enrollment penalty

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The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.

Medicare calculates the penalty by multiplying 1% of the "national  base beneficiary premium" ($33.06 in 2021) times the number of full,  uncovered months you didn't have Part D or creditable coverage. The  monthly premium is rounded to the nearest $.10 and added to your monthly  Part D premium.The national base beneficiary premium may change each year, so your penalty amount may also change each year.

 What is the  Medicare Donut Hole ?

Prescription drugs can also eat into your budget if you need expensive  medications. You should know that you can purchase standalone  prescription coverage. That’s Part D in Medicare terminology.

Under the Affordable Care Act (ACA),  the prescription price donut hole has been closing each year, but it’s  not completely gone yet. At a certain level—$4,130 in 2021—you enter the  notorious donut hole in coverage that requires you to pay up to 25% of  covered brand-name and generic drug costs. When costs go above $6,550 in  2021, you pass through the donut hole and owe only 5% of the cost of  drugs. 3 

The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage.

Medicare calculates the penalty by multiplying 1% of the "national  base beneficiary premium" ($33.06 in 2021) times the number of full,  uncovered months you didn't have Part D or creditable coverage. 

The  monthly premium is rounded to the nearest $.10 and added to your monthly  Part D premium.The national base beneficiary premium may change each year, so your penalty amount may also change each year.