Medicare Late Enrollment Penalties — and How to Avoid Them

Updated June 3, 20265 min readReviewed against medicare.gov

Medicare charges a late-enrollment penalty if you sign up after you were first eligible without having other qualifying coverage. The Part B penalty is 10% of the premium for each full 12 months you delayed, and it generally lasts as long as you have Part B. The Part D penalty is 1% of the national base premium for each month you went without drug coverage. Active employer coverage usually lets you delay penalty-free.

How the Part B penalty works

If you did not sign up for Part B when first eligible and you did not have qualifying coverage, your monthly premium may go up 10% for each full 12-month period you could have had Part B. Unlike a one-time fee, this penalty is added to your premium for as long as you have Part B.

Example: delaying Part B for three full years could add roughly 30% to your monthly premium permanently.

How the Part D penalty works

The Part D late-enrollment penalty applies if you go 63 days or more in a row without Part D or other creditable prescription drug coverage after your IEP. It is calculated as 1% of the "national base beneficiary premium" times the number of months you went without coverage, then added to your Part D premium.

How to avoid the penalties

Keep qualifying employer or union coverage active, and enroll through a Special Enrollment Period when it ends.
Sign up during your Initial Enrollment Period if you do not have other qualifying coverage.
Keep proof that any drug coverage you had was "creditable" (your plan sends a notice each year).

Frequently asked questions

Does the Part B penalty ever go away?

Generally no. The Part B late-enrollment penalty is added to your premium for as long as you have Part B, except in limited situations such as qualifying for a Medicare Savings Program.

Is employer coverage enough to avoid the penalty?

Coverage from an employer with 20 or more employees, based on current active employment, usually counts and lets you delay Part B penalty-free. COBRA and retiree coverage typically do NOT count — confirm with Social Security.

Sources

Related guides

Enrollment & Eligibility

Working Past 65: Do You Have to Sign Up for Medicare?

Medicare Login Guide is an independent resource and is not affiliated with or endorsed by Medicare, the Centers for Medicare & Medicaid Services, or any government agency. This article is for general information only — confirm current figures and your specific options at medicare.gov or by calling 1-800-MEDICARE.