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Penalties

Understanding Medicare late enrollment penalties

Enrolling late without other qualifying coverage can add a lasting penalty to your premiums. Here's how the math works.

Part B Late Enrollment Penalty

For each full 12-month period you were eligible for Part B but didn't sign up — and didn't have other creditable coverage, such as through an employer — your monthly Part B premium can increase by roughly 10%. This higher premium generally applies for as long as you have Part B.

Illustrative example: If you delayed Part B by 24 months (two full 12-month periods) without creditable coverage, your premium could increase by roughly 20% for as long as you have Part B. This is a hypothetical example to illustrate the formula, not a current rate.

Part D Late Enrollment Penalty

The Part D penalty is generally about 1% of the national base beneficiary premium for each full month you went without Part D or other creditable prescription drug coverage after becoming eligible. That amount is added to your monthly Part D premium for as long as you have Part D coverage.

Illustrative example: If you went 18 months without creditable drug coverage, your penalty could be roughly 18% of that year's national base beneficiary premium, added to your monthly Part D premium. This is a hypothetical example to illustrate the formula, not a current rate.

The best way to avoid these penalties: enroll during your Initial Enrollment Period, or make sure any coverage you have while delaying Medicare qualifies as "creditable coverage." See Working at 65 to learn more about creditable coverage.

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