Medicare late-enrollment penalties (and how to avoid them)

The Part B penalty

If you don't enroll in Part B when first eligible and don't have creditable coverage from an active employer, your premium goes up 10% for each full 12-month period you could have had Part B but didn't. The penalty is permanent (you pay it for as long as you have Part B), and it grows the longer you wait.

The Part D penalty

If you go 63 or more days in a row without creditable drug coverage after your Initial Enrollment Period, you owe a Part D penalty: 1% of the national base beneficiary premium for each month you went without, added to your Part D premium permanently. This is why enrolling in a drug plan matters even if you take no medications today.

The Part A penalty

Most people get premium-free Part A and never face this. But if you have to buy Part A (fewer than 40 quarters of Medicare taxes) and enroll late, your premium can be 10% higher for twice the number of years you delayed.

How to avoid every penalty

The penalties exist to reward timely enrollment, and there are clean, legal ways to never owe one.

• Enroll during your Initial Enrollment Period: The 7-month window around your 65th birthday. Sign up on time and there's no penalty.
• Keep creditable coverage: Active-employer group coverage (yours or a spouse's) lets you delay Part B and Part D penalty-free.
• Use your Special Enrollment Period: When employer coverage ends, you get an 8-month SEP for Part B and a 2-month window for Part D, with no penalty if you act in time.
• Watch the COBRA trap: COBRA and retiree coverage do NOT count as creditable for Part B. Enroll in Medicare when active-employment coverage ends, not when COBRA does.

Related articles

• Medicare enrollment periods and deadlines
• Turning 65: your complete guide to starting Medicare
• What Medicare costs: premiums and deductibles

Common questions