Medicare Late Enrollment Penalties Explained

A Medicare late enrollment penalty is an extra amount added to your monthly premium when you did not sign up for Part A, Part B or Part D when you were first able to, and you did not have other coverage that counts. According to Medicare.gov, the Part B penalty is 10 percent for each full year you could have had Part B but did not, and for most people it lasts for life. The Part D penalty is 1 percent of the national base premium for each month without creditable drug coverage, and it also lasts as long as you have Medicare drug coverage. The Part A penalty only affects people who have to buy Part A. The good news is that each penalty is avoidable once you know the rules, and this guide walks through them.

Three penalties, three different rules

Each part of Medicare has its own late penalty, and they are calculated differently. Here is a short summary before we go through each one.

The Part A penalty

Most people never face this one. If you or your spouse paid Medicare taxes for at least 10 years while working, Part A has no premium, so there is nothing to add a penalty to.

If you do have to buy Part A, Medicare.gov says your monthly premium may go up 10 percent if you sign up late, and you pay the higher premium for twice the number of years you could have had Part A but did not sign up. Its example: two years late means four years of the higher premium. For context, CMS set the 2026 Part A premium at $565 a month for people with fewer than 30 quarters of work, so a 10 percent penalty would add $56.50 a month in 2026.

The Part B penalty

If you do not sign up for Part B when you are first eligible, and you do not qualify for a Special Enrollment Period, your Part B premium goes up 10 percent for each full 12 month period you could have had Part B but did not. For most people it is charged for as long as they have Part B.

Medicare.gov gives this 2026 example. Someone who waited 24 months, with no Special Enrollment Period, owes a 20 percent penalty. That is 20 percent of the $202.90 standard premium, or $40.58, so the monthly Part B premium becomes $243.48, rounded to $243.50 for 2026. Because the penalty is a percentage of the standard premium, the dollar amount rises when the standard premium rises.

Medicare.gov also says you generally do not pay a Part B penalty if you qualify for a Special Enrollment Period or if you enroll in a Medicare Savings Program.

Working past 65: when delaying Part B is safe

Delaying Part B is safe when you, or your spouse, are still working and covered by an employer group health plan based on that current job. You can then sign up later using the Part B Special Enrollment Period, which is open while you have that coverage and for 8 months after the job or the coverage ends, whichever comes first.

Some coverage looks like employer coverage but does not count for this rule. COBRA, retiree coverage and VA health care are not coverage based on current employment, so relying on them to delay Part B can lead to a penalty. If you are not sure, ask your benefits office before you turn down Part B.

The Part D penalty

You may owe a Part D penalty if, after your Initial Enrollment Period ends, you go 63 days or more in a row without Medicare drug coverage or other creditable drug coverage. Creditable means coverage expected to pay, on average, at least as much as standard Medicare drug coverage. Your employer or union plan must tell you each year whether its drug coverage is creditable. Keep those letters.

The penalty is 1 percent of the national base beneficiary premium for each full month you went without coverage, rounded to the nearest $0.10, and it is added to your drug plan premium for as long as you have Medicare drug coverage. Medicare.gov's 2026 example: 14 months without coverage is 14 percent of the $38.99 base premium, or $5.46, rounded to $5.50 a month.

The base premium is reset each year, so the dollar amount of your penalty can change even though the percentage does not. CMS announced on July 28, 2026 that the base beneficiary premium for 2027 is $41.33.

Extra Help and the Part D penalty

If you qualify for Extra Help, the federal program that helps pay Part D costs for people with limited income and resources, Medicare.gov says you generally do not pay the Part D late enrollment penalty. If you think you may qualify, apply through Social Security before you assume a penalty is permanent. Our guide to Extra Help and Medicare Savings Programs in Arizona explains the income limits.

If you think your penalty is wrong

For Part D, the penalty letter from your plan includes a reconsideration request form. Medicare's Part D penalty fact sheet says to send it back within 60 days of the date on the letter, with proof such as a creditable coverage notice from a former employer. An independent reviewer decides, and you keep paying your premium, including the penalty, while it is reviewed.

For Part B, contact Social Security. If the penalty was charged because a Special Enrollment Period was not applied, proof of your employer coverage based on current work is usually what fixes it.

A simple checklist to avoid a penalty

• Know your Initial Enrollment Period: the 3 months before the month you turn 65, your birthday month, and the 3 months after.
• If you are still working, ask your employer in writing whether your health coverage is based on current employment and whether its drug coverage is creditable.
• If you retire or lose coverage, sign up for Part B within the 8 month Special Enrollment Period and join a drug plan before you reach 63 days without creditable coverage.
• Do not count on COBRA, retiree coverage or VA coverage to delay Part B.
• Keep every creditable coverage notice and your CMS-L564 in a safe place.
• Check whether Extra Help or a Medicare Savings Program fits your income.

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The bottom line

Late penalties are one of the few Medicare mistakes that can follow you for life, and almost all of them come from timing. If you are turning 65, retiring, or leaving employer coverage, map out your dates first. Our Part B and Part D penalty calculators show the cost of waiting, and a short conversation with us can confirm whether your current coverage counts.