Why Medicare has late penalties
Medicare's late enrollment penalties exist to encourage people to sign up on time. If everyone waited until they got sick to enroll, costs would rise for everyone else. The penalties look small in any single month, but for Part B and Part D they last for as long as you have the coverage, so they add up over a retirement. A 10% penalty paid for 20 years costs thousands of dollars.
Part B late enrollment penalty
The Part B penalty adds 10% of the standard premium to your monthly premium for each full 12-month period you could have had Part B but didn't. You pay it for as long as you have Part B.
How it's calculated
The penalty is 10% of the standard Part B premium ($202.90 in 2026) for each full 12-month period of delay, added to your premium every month. When the standard premium goes up each year, so does your penalty. Delays while you had group health coverage from your own or your spouse's current job don't count.
Example
Sarah didn't sign up for Part B when she turned 65 and had no job-based coverage. She went 3 full years without Part B before signing up during a General Enrollment Period. Her late penalty is 30% of the standard Part B premium. At the 2026 premium, that's about $60.87 a month extra, or about $730 a year. Over 20 years at today's premium, that's about $14,609, and more as the premium rises.
How to avoid it
- Sign up during your Initial Enrollment Period (the 7 months around your 65th birthday)
- Or have group health coverage based on your own or your spouse's current job with an employer of 20 or more employees, then sign up within the 8-month Special Enrollment Period after the job or coverage ends
- Or be in another situation Medicare recognizes, such as some active-duty TRICARE coverage or certain volunteer service abroad
COBRA, retiree health plans, marketplace (Healthplanfinder) coverage and VA health care don't count as coverage based on current employment, so they don't let you delay Part B without a penalty. See our working past 65 page.
Part D late enrollment penalty
The Part D penalty is 1% of the national base beneficiary premium for each full month you went without Part D or other creditable drug coverage after your Initial Enrollment Period ended (counting only gaps of 63 days or more in a row). It's added to your premium for as long as you have Part D, whichever plan you join.
How it's calculated
Each year CMS sets the national base beneficiary premium; for 2026 it's $38.99. Medicare multiplies 1% of that amount by the number of full months you went without creditable drug coverage, rounds to the nearest 10 cents, and adds it to your monthly Part D premium. Because the base premium can change each year, your penalty can too.
Example
James had no creditable drug coverage for 24 months after his Initial Enrollment Period ended, then joined a Part D plan. His penalty is 24% of the base premium: 24% × $38.99 is about $9.36, which Medicare rounds to the nearest 10 cents, added to his Part D premium every month he has Part D in 2026.
What counts as creditable drug coverage?
Coverage that's expected to pay, on average, at least as much as standard Medicare Part D. Common creditable sources:
- Many employer or union group plans that include drugs (check the plan's creditable coverage notice)
- VA prescription benefits
- TRICARE
- Indian Health Service and tribal health programs
- Some Federal Employees Health Benefits (FEHB) plans
- Some COBRA plans (check with the plan administrator)
Keep your creditable coverage notices. Each year, employers and other plans send a notice saying whether their drug coverage is creditable. Save them; you may need them later to show no penalty applies.
Part A late enrollment penalty (rare)
Most people get Part A with no premium because they or a spouse have 40 or more quarters (about 10 years) of work paying Medicare taxes. For them, there's no Part A penalty.
If you have to buy Part A (fewer than 40 quarters and no qualifying spouse) and don't sign up when you're first eligible, your premium can go up 10% for twice the number of years you could have had Part A but didn't sign up. For example, if you waited 2 years, you pay the higher premium for 4 years, and then it ends.
This is the only Medicare late penalty that ends on a set schedule.
Penalty exceptions and special situations
Equitable relief and exceptional situations
If you delayed Part A or Part B because a federal employee gave you wrong information, you may be able to ask Social Security for equitable relief, which can let you sign up without a penalty. Medicare also has Special Enrollment Periods for some exceptional situations, such as an employer or health plan giving you wrong information, a declared emergency, release from incarceration, or losing Medicaid. Documentation matters: keep letters, dates and names. Call Social Security at 1-800-772-1213 (TTY 1-800-325-0778) to ask about your options.
Extra Help removes the Part D penalty
If you qualify for Extra Help (the Low-Income Subsidy) with Part D costs, you don't pay a Part D late enrollment penalty. You get Extra Help automatically if you have full Apple Health coverage, a Medicare Savings Program or SSI; otherwise you apply through Social Security. See Extra Help in Washington.
People with Medicare because of a disability who turn 65
If you had Medicare because of a disability before 65, you get a new Initial Enrollment Period when you turn 65. Any Part B or Part D late penalty you were paying because of your disability-based enrollment ends then.
Documenting creditable coverage
If you delay Medicare because you have other qualifying coverage, keep proof:
- For delaying Part B: Form CMS-L564 (Request for Employment Information), completed by your employer, which you send with your Part B application (Form CMS-40B)
- For delaying Part D: the yearly creditable coverage notices from your plan
- VA drug coverage: your VA enrollment records
Without proof, Social Security and your Part D plan may assume you didn't have qualifying coverage and apply the penalty.
What to do if you've been charged a penalty
- Check the calculation. Look at the months counted, the premium used and whether any period of other coverage was missed.
- Send documentation if you had qualifying coverage during the period in question.
- Ask for a reconsideration. For Part D, you can ask for a reconsideration, generally within 60 days of the letter from your plan. For Part B, contact Social Security, especially if you may qualify for equitable relief or an exceptional-situation Special Enrollment Period.
- Apply for Extra Help if your income and resources are limited; it removes the Part D penalty.
Try our late penalty calculator to estimate a penalty.
Where to get help
Late enrollment penalties are confusing and can last a long time, so it's worth asking before you decide:
- Social Security: 1-800-772-1213 (TTY 1-800-325-0778), for signing up, Part B penalties and equitable relief
- 1-800-MEDICARE (1-800-633-4227, TTY 1-877-486-2048): for questions about Medicare and Part D penalties
If you'd like help comparing coverage from the companies they work with, you can call (206) SENIORS (206-736-4677), TTY 711 to reach a licensed insurance agent with Benefits Life, at no cost to you. See also Washington Medicare contacts.
Sources
- Medicare.gov — Avoid late enrollment penalties
- Medicare.gov — Part D late enrollment penalty
- CMS — 2026 Medicare Parts A & B premiums and deductibles
- Medicare.gov — Working past 65
- Medicare.gov — COBRA coverage
- Medicare.gov — Special Enrollment Periods
- Social Security — Sign up for Medicare
- Social Security — Extra Help with Medicare prescription drug plan costs
Frequently asked questions
How is the Medicare Part B late enrollment penalty calculated?
It's 10% of the standard Part B premium ($202.90 in 2026) for each full 12-month period you could have had Part B but didn't. It's added to your monthly premium for as long as you have Part B, and it rises when the standard premium does.
Is the Part D late penalty permanent?
Generally yes: it's 1% of the national base beneficiary premium for each full month you went without creditable drug coverage, added to your premium for as long as you have Part D. If you get Extra Help, you don't pay it. If you had it before 65 because of a disability, it ends when you turn 65.
Does COBRA let me avoid the Part B penalty?
No. COBRA isn't coverage based on current employment, so it doesn't let you delay Part B without a penalty. Your 8-month window to sign up for Part B starts when your job ends, not when COBRA ends. COBRA drug coverage can count as creditable for Part D, so check the notice from the plan.
Can I get a Medicare late penalty waived?
Sometimes. If you delayed because a federal employee gave you wrong information, Social Security may grant equitable relief. Medicare also has Special Enrollment Periods for some exceptional situations, such as wrong information from an employer or health plan. For Part D, you can ask for a reconsideration if you think the penalty is wrong, and Extra Help removes it.
What is creditable drug coverage?
Drug coverage that's expected to pay, on average, at least as much as standard Medicare Part D. Common sources include many employer and union plans, VA, TRICARE, Indian Health Service and tribal health programs, and some FEHB plans. Your plan sends a yearly notice saying whether it's creditable; keep those notices.
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