Medicare Late Enrollment Penalties
Key Takeaways
- Medicare imposes permanent late enrollment penalties for Parts B and D if you don’t sign up when first eligible, increasing your monthly premiums for life.
- Part A penalty applies only if you don’t qualify for free Part A; premiums increase by 10% for twice the number of years you delayed enrollment.
- Part B penalty adds 10% to your premium for each 12-month period you delayed, and Part D penalty adds 1% per uncovered month without creditable prescription coverage, both lasting for life.
- You can avoid penalties if you qualify for a Special Enrollment Period, such as having current employer coverage, losing Medicaid, or being affected by a disaster.
- To prevent penalties, enroll on time, maintain continuous coverage, and check for Special Enrollment Period eligibility if delaying enrollment.
Medicare imposes late enrollment penalties if you don’t sign up for certain parts (and don’t have alternative coverage) when you’re first eligible. These penalties can increase your monthly premiums and, in some cases, last for as long as you have Medicare. Fortunately, you can avoid penalties if you meet certain criteria for exemptions.
Learn more about the Medicare penalty for late enrollment and how to prevent it.
Ready for a new Medicare Advantage plan?
Should I Be Worried About Paying a Penalty?
Delaying enrollment beyond your initial period can result in higher monthly premiums. For Medicare Parts B and D, the Medicare late enrollment penalty is permanent, meaning you will always pay more for coverage. Late enrollment penalties can be costly the longer you delay enrollment. However, if you meet exemption criteria, you can avoid the penalty even if you delay your enrollment.
How the Medicare Penalty for Late Enrollment Works
Original Medicare is composed of Part A (hospital insurance) and Part B (outpatient services and durable medical equipment). Private insurance companies offer Medicare Part D to provide coverage for prescription drugs, but it also has a late enrollment penalty.
- Part A penalty: Most people get Medicare Part A for free as long as you or your spouse have worked and paid taxes for at least 10 years. However, if you are not eligible for premium-free Part A and do not enroll in Part A when you’re first eligible, your premium can increase by 10%. You’ll pay this higher premium for twice the number of years you delayed enrollment.
- Part B penalty: If you don’t sign up for Part B when first eligible and don’t have alternative coverage, your premium increases by 10% for each 12-month period you delayed enrollment. This penalty lasts for life.
- Part D penalty: If you go 63 days or more without creditable prescription drug coverage after becoming eligible, you’ll pay a penalty. The penalty is 1% of the national base beneficiary premium multiplied by the number of whole months you went without coverage. This penalty also lasts for life.
Medicare Part A Late Enrollment Penalty
If you have to pay a Part A premium and don’t sign up when first eligible, that cost can increase by 10%.
You’ll pay this higher premium for twice the number of years you delayed enrollment. For example, if you had to purchase Medicare Part A and delayed enrollment for 5 years, your premium would increase by 10% for 10 years.
Medicare Part B Late Enrollment Penalty
If you don’t sign up for Part B when first eligible and don’t have another source of coverage, your premium increases by 10% for each 12-month period you delayed enrollment. For example, the Part B premium is $185 per month in 2025.
If you first became eligible for Medicare Part B in 2022 but delayed enrollment until 2025 (3 years), then your premium would increase by 30%. Instead of paying $185 monthly, you would be responsible for $240.50 monthly for your 2025 coverage. This penalty is permanent, so you would pay 30% more every year on your premium.
Medicare Part D Late Enrollment Penalty
If you go 63 days or more without creditable prescription drug coverage after becoming eligible, you’ll pay a penalty.The penalty is 1% of the “national base beneficiary premium” multiplied by the number of full months you went without coverage. The “national base beneficiary premium” is a specific amount set by Medicare each year. Similar to the Part B penalty, this penalty lasts for life.
For example, the national base beneficiary premium is $36.78 in 2025. If you went without prescription drug coverage through a Part D plan or Medicare Advantage plan with Part D benefits for five full months, then you would pay a 5% penalty when you decide to enroll in Part D. This would be an additional $1.84 per month in 2025.
Exemptions to the Medicare Late Enrollment Penalty
You don’t have to pay a penalty if you’re eligible for a Special Enrollment Period. The following are common scenarios that would make you eligible for a Special Enrollment Period:
- You lose Medicaid coverage
- If you delayed enrolling in Part A or Part B because you had health coverage through current employment (yours or your spouse’s)
- Being affected by a natural disaster or emergency
- Experiencing an error or misinformation that affected timely enrollment
Still have questions? GoHealth has the answers you need.
Is There a Late Enrollment Penalty for Medicare Advantage?
There is no late enrollment penalty specifically for Medicare Advantage (Medicare Part C) plans from private insurance carriers. Medicare Advantage plans substitute for Original Medicare and may offer additional benefits, including Part D prescription drug coverage. You must enroll in Medicare Parts A and B before you can join a Medicare Advantage plan.
To avoid penalties, make sure you enroll in Medicare Parts A and B when first eligible and maintain drug coverage.
Reasons You May Delay Medicare Enrollment
- You or your spouse are still receiving employer-sponsored health insurance. If you or your spouse are still working and have health insurance through an employer with 20 or more employees, you may delay enrolling in Medicare Part B without penalties. However, if the employer has fewer than 20 employees, you may need to enroll in Medicare as your primary coverage.
- You were enrolled in a Medicare Advantage plan with Part D and now want to enroll in a stand-alone Part D plan. If you decide to switch from Medicare Advantage to Original Medicare, you may enroll in Medicare Part D without triggering a late enrollment penalty.
- You experienced an emergency that made you unable to enroll during your enrollment period. As long as FEMA declares the emergency a disaster, enrollment periods do not apply, and you may enroll outside of an enrollment period without incurring a penalty.
- You forgot to enroll during your Initial Enrollment Period. Your Initial Enrollment Period (IEP) lasts for seven months. It lasts for three months before and after the month you turn 65. Unfortunately, forgetting to enroll does not make you eligible for a Special Enrollment Period so be sure to enroll during your IEP to avoid late enrollment penalties.
How to Avoid a Medicare Late Enrollment Penalty
To avoid a Medicare late enrollment penalty, follow these steps:
- Enroll on time. Make sure you sign up for Medicare when you’re first eligible, which is usually three months before your 65th birthday, the month of your birthday, and three months after. If you’re not automatically enrolled, you must actively sign up when you first become eligible.
- Enroll in Part D coverage. Even if you do not have prescription drug needs now, you may in the future. Enrolling in Part D either through a stand-alone plan or as part of a Medicare Advantage Prescription Drug Plan can help you avoid the permanent late enrollment penalty.
- Avoid gaps in coverage. Even if you enrolled in Medicare when you were first eligible, you can incur a late enrollment penalty if you let your coverage lapse.
- Check if you are eligible for a Special Enrollment Period. If you or your spouse are still working and covered by a group health plan, you can delay enrolling in Part B and Part D without penalty.
Looking for Medicare Advantage coverage?
Putting It All Together
Medicare imposes late enrollment penalties if you don’t sign up for certain parts of Medicare when you’re first eligible, or if you let your coverage lapse. See if you are eligible for a late enrollment penalty exemption if you want to delay enrollment. This can help you avoid permanent penalties, which can lead to higher costs over time.
Sources
- How much does Medicare drug coverage cost? Medicare.gov
- 3 ways to avoid the Part D late enrollment penalty. Medicare.gov.
This website is operated by GoHealth, LLC., a licensed health insurance company. The website and its contents are for informational and educational purposes; helping people understand Medicare in a simple way. The purpose of this website is the solicitation of insurance. Contact will be made by a licensed insurance agent/producer or insurance company. Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. Our mission is to help every American get better health insurance and save money.
Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.