What is the Medicare late enrollment penalty?

Two penalties, one for Part B and one for Part D. Both are added to your monthly premium and both last for life. Here is how each one is figured.

Updated September 3, 2026 · 4 min read · by Gerino Alejos

Key points

The Part B penalty adds 10 percent to your premium for every full year you waited, and it lasts for life.
The Part D penalty adds about 1 percent for every month you went without drug coverage that counts.
You avoid both penalties by signing up in your seven month window at 65, or in the special window after coverage from a job ends.

A late enrollment penalty is an extra charge added to your Medicare premium, the monthly bill for coverage, when you sign up after your deadline. There are two of them, one for Part B and one for Part D. Both last as long as you have the coverage, which for most people means the rest of their life.

The two penalties are figured differently. Medicare shows how the drug penalty is calculated on medicare.gov.

The Part B penalty: 10 percent per year, for life

Part B is the part of Medicare that pays for doctor visits and outpatient care, which is care you get without being admitted to the hospital. For every full 12 months you could have had Part B and did not, 10 percent is added to your Part B premium. That surcharge stays for the rest of your life.

Three years late means 30 percent more, every month, forever. The penalty is applied to the standard premium for the current year, so it grows as the premium grows. For every $100 of Part B premium, a 30 percent penalty adds $30 a month.

There is a second cost people forget. If you miss your window, you may not be able to enroll right away, and coverage can start months later. You have no insurance in the meantime.

The Part D penalty: about 1 percent per month

Part D is the part of Medicare that pays for prescriptions. Its penalty is figured per month rather than per year. It is 1 percent of a national base premium, a figure Medicare sets each year, for each full month you went without creditable drug coverage after you were eligible.

Two years without coverage is roughly a 24 percent surcharge added to whatever drug plan you eventually choose. The penalty follows you from plan to plan, and it is refigured each year against the national base figure.

People skip Part D because they take no medications. That feels reasonable, and it is usually the wrong call. The penalty counts every month you go without coverage, whether you fill a prescription or not, and your health can change before you expect it.

What creditable coverage means

Creditable coverage is drug coverage that is at least as good as Medicare's. You are not penalized for any months you had it.

Employer plans have to tell you every year whether their drug coverage is creditable. The notice usually arrives in the fall as a single page that looks like junk mail.

Keep those notices. They are your proof.
Drug coverage from the VA, the Department of Veterans Affairs, is creditable.
TRICARE, the military health plan, is creditable.
Marketplace plans and COBRA, the coverage that lets you keep an old employer plan after leaving a job, do not protect you from the Part B penalty.

The enrollment windows that avoid a penalty

Initial Enrollment Period: seven months around your 65th birthday. It covers the three months before your birthday month, the month itself, and the three months after.
Special Enrollment Period: a window to sign up late without a penalty after coverage from active employment ends. For Part B it lasts eight months. For Part D it is only two months, which is why people meet the Part B deadline and still get hit on Part D.
General Enrollment Period: January through March, for people who missed everything else. This is the cleanup option, and by then the penalty has already attached.

See the rules for working past 65 to find which of these applies to you.

If the penalty was applied by mistake

It happens, usually because Social Security has no record of coverage you had. You can appeal, and the creditable coverage notices you kept are what wins it.

There is also relief if you delayed because someone gave you bad information. That is a narrower path, and it is not automatic.

How to stay penalty free

Mark the three months before your 65th birthday month on a calendar now.
If you are working past 65, confirm in writing that your employer has 20 or more employees and that its drug coverage is creditable.
Keep every creditable coverage notice in one folder.
When employer coverage ends, act in the first month, not the eighth. The Part D window is only two months.

The deadlines do not bend, and nobody sends you a reminder. If you are not certain which window you are in, call our office in McAllen before it closes.

Common follow-up questions

Does the Medicare penalty ever go away?

No. Both the Part B and Part D penalties last as long as you keep the coverage. That is why a few months of delay costs so much over time.

I had insurance the whole time. Why am I being penalized?

Because not all coverage counts. COBRA, retiree plans and Marketplace coverage do not protect you from the Part B penalty. Only coverage from a job where you or your spouse is still actively working does.

I take no medications. Do I still need Part D?

If you want to avoid the penalty, yes, unless you have other creditable drug coverage. A low cost plan now almost always costs less than the surcharge later.

Want this looked at properly?

We are an independent agency in McAllen serving Hidalgo, Cameron and Starr counties. There is no obligation to talk it through.

Call (956) 687 3334

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