The Medicare late enrollment penalty is not a one-time fee. It is added to your premium every month, in most cases for as long as you have the coverage, and it grows the longer you wait. Enter how long you went without coverage below and this page will show you what the Part B and Part D penalties would cost you — this year, and over the years that follow.
Work out your penalty
Only count time you were eligible and had no employer coverage. If you had coverage through a job you were still working at, that time usually does not count.
“Creditable” means drug coverage at least as good as Part D. Your employer or retiree plan tells you each year whether yours is.
How is the Part B penalty calculated?
Ten percent of the standard Part B premium for each full twelve-month period you could have signed up but did not. Partial years do not count, which is the one piece of good news in it: going eleven months late costs nothing, and going thirteen months late costs a full ten percent.
The percentage is applied to the standard premium, and the standard premium rises most years — so the penalty is not a fixed dollar amount. It quietly grows with the program for the rest of your life.
How is the Part D penalty calculated?
One percent for each full month you went without creditable drug coverage — twelve percent a year. It is calculated against a figure called the national base beneficiary premium, not against your own plan’s premium, and it is added on top of whatever plan you eventually choose.
The trigger people miss is that you do not have to skip drug coverage deliberately. Going 63 days or more without creditable coverage starts the clock. A gap between an employer plan ending and a Part D plan starting can do it without anyone deciding anything.
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There are two Medicare penalties that follow you for the rest of your life, not for a year, not for five years, for the rest of your life. And the people who get hit by them almost always had no idea they were coming. Penalty number one is going to be the Part B late enrollment penalty. If you're eligible for Medicare at 65 and you don't sign up for Part B and you're not covered by a current employer's group health plan, you're going to get hit with a 10% penalty on your Part B premium for every year you waited.
That penalty gets added permanently to your premium for as long as you have Medicare. Then penalty number two that you want to avoid is the Part D penalty. This one is 1% per month for every month you went without credible drug coverage. If you waited 24 months, that's a 24% permanent increase on your drug plan premium.
single month forever. Now here's the important exception. If you or your spouse are still working and covered by an employer group health plan with 20 or more employees, you can delay Medicare without any penalties. You're going to have a special enrollment period when that coverage ends.
But if you're not in that situation and you wait, those penalties are going to kick in. This is one of the most important conversations to have before you turn 65. I put together a free Medicare Made Simple guide that walks you through exactly when and how to enroll so you never get hit with the penalty you didn't see coming.
Hope this helps. See you in the next one.
Is there a Part A penalty too?
For most people, no. About 99 percent of beneficiaries get Part A with no premium because they or a spouse paid Medicare taxes for at least ten years, and there is no penalty on a premium you do not pay.
If you do have to buy Part A, the penalty is ten percent — but unlike the others it is not permanent. You pay it for twice the number of years you delayed. Two years late means four years of the higher premium, then it stops.
Can a Medicare late enrollment penalty be removed?
Sometimes, and it is worth checking before accepting one. The penalty does not apply at all if a Special Enrollment Period covered your delay — most commonly coverage through a job you or your spouse were still working at. It does not apply to Part D if you had creditable drug coverage the whole time, or if you qualify for Extra Help.
If a penalty was assessed and you believe one of those applies to you, there is a reconsideration process. People do win these. What they need is the evidence — proof of the employer coverage, or the creditable coverage notice the plan sent every autumn. The notice nobody keeps is often the one that settles it.
What does this actually change?
For most people reading this, the penalty is still avoidable — and that is the entire point of running the numbers. If you are approaching 65, the enrollment calculator will show you the months that keep you clear of it. If you are working past 65, whether your coverage counts is the whole question, and it is covered in Medicare and employer coverage.
If a penalty is already on your premium, the useful questions are whether it was calculated correctly and whether an exception applies to you. Both are worth a conversation, and there is no cost for it. Pick a time or call 770-765-7007.
Common questions
Does the Medicare penalty ever go away?
The Part B and Part D penalties generally last as long as you have that coverage. The Part A penalty is the exception — it lasts twice the number of years you delayed, then ends. There is one more exception worth knowing: if you qualify for Extra Help with drug costs, the Part D penalty is removed while you have it.
Do the penalty amounts change every year?
Yes. Both penalties are percentages of figures that are reset annually, so the dollar amount moves each January even though your percentage stays the same. The figures on this page are the current year’s.
I had COBRA. Does that protect me?
Not for Part B. COBRA is not coverage based on current employment, so it does not give you a Special Enrollment Period and it does not stop the Part B clock — this is one of the most common and most expensive misunderstandings in Medicare. For Part D it depends on whether the COBRA drug coverage was creditable, which the plan has to tell you.
What counts as creditable drug coverage?
Coverage the plan certifies is at least as good as standard Part D. Most employer and union plans are, and they are required to send you a notice each year saying so. Keep that notice. It is the document that settles a Part D penalty dispute.
I delayed on purpose because I was healthy. Was that a mistake?
Usually, yes — and it is worth being plain about it. Medicare’s penalties exist precisely to discourage waiting until you need care. Healthy years are the cheap years to be enrolled, and the delay is charged back to you for the rest of your life. If that is where you are, the next question is not whether it was a mistake but whether an exception applies, which is worth reading up on before you assume it does not.
A penalty is only one part of the bill. What Medicare actually costs sets out the rest, and the full set of calculators covers enrollment timing and income surcharges too.