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.

Written by Kayla Price, Licensed Medicare Agent (NPN 18530055)

Quick Answer

The Medicare Part B late enrollment penalty is 10% of the standard premium for each 12-month period you went without coverage. The Part D late enrollment penalty is 1% of the national base beneficiary premium per month without coverage. Both penalties last as long as you have Medicare.

Part B Late Enrollment Penalty

For each full 12-month period you were eligible for Part B but didn't sign up during yourInitial Enrollment Period — 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. Official penalty rules are published atMedicare.gov.

Frequently Asked Questions

How is the Medicare Part B late enrollment penalty calculated?

For each full 12-month period you were eligible for Part B but didn't enroll (and didn't have other creditable coverage), your monthly premium may go up by roughly 10%. This penalty generally lasts as long as you have Part B.

How is the Medicare Part D late enrollment penalty calculated?

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

How can I avoid the Medicare late enrollment penalties?

Enroll during your Initial Enrollment Period, or make sure any coverage you keep instead (such as employer coverage) qualifies as creditable coverage so you avoid a penalty when you do eventually sign up.

Do the Part B and Part D penalties ever go away?

Generally, no. Both penalties are typically added to your premium for as long as you have that part of Medicare, which is why enrolling on time or maintaining creditable coverage matters.

Not sure how these penalties apply to your situation? Take the Medicare Decision Style Quiz orschedule a consultation with a licensed insurance agent.

Still working? Here's what to know

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