Medicare Late Enrollment Penalties
It’s important to sign up for Medicare coverage during your Initial Enrollment Period, unless you have other coverage that’s similar in value to Medicare (like from an employer). If you don’t, you may have to pay an extra amount, called a late enrollment penalty and may have to pay this penalty for the rest of your life.
The most significant late enrollment penalties are for Parts B (Medical) and Part D (Prescription Drug Plans).
Part B Late Enrollment Penalty
You can enroll in Part B during your Initial Enrollment Period, which begins three months before your birthday month and ends three months after for a total of seven months. If you delay enrollment and don't have other creditable coverage (such as through an employer), you may face penalties. The penalty for late enrollment in Part B is an additional 10% for each 12-month period that the individual could have enrolled but didn't. This penalty is permanent and added to the monthly premium for as long as the individual remains enrolled in Part B.
Example:
If you waited 2 full years (24 months) to sign up for Part B and didn’t qualify for a Special Enrollment Period, you’ll have to pay a 20% late enrollment penalty (10% for each full 12-month period that you could have signed up), plus the standard Part B monthly premium ($174.70 in 2024).
$174.70 (2024 Part B standard premium)
+ $34.94 (20% [of $174.70] late enrollment penalty)
$209.60 will be your Part B monthly premium for 2024. This amount is rounded to the nearest $.10 and includes the late enrollment penalty.
Part D Late Enrollment Penalty
Medicare Part D provides coverage for prescription drugs, helping beneficiaries afford the medications they need to manage their health conditions. Like Part B, enrollment in Part D is optional but comes with penalties for late enrollment. The Part D late enrollment penalty is calculated by multiplying 1% of the "national base beneficiary premium" ($34.70 in 2024) by the number of full, uncovered months the individual was eligible for Part D but didn't enroll. This penalty is added to the monthly premium and remains for as long as the individual has Part D coverage.
Example:
If you waited 14 months after you were eligible for Medicare to join a Medicare drug plan, and you didn’t have creditable drug coverage, you’ll have to pay a 14% late enrollment penalty in addition to your monthly plan premium.
The penalty amount comes from the "national base beneficiary premium" ($34.70 in 2024).
The national base beneficiary premium changes each year, so your penalty amount may also change each year. This monthly penalty is added for as long as you have Medicare drug coverage, even if you switch plans.
$34.70 (2024 national base beneficiary premium)
X 0.14 (14% penalty)
$4.86 (rounded to the nearest $0.10 = $4.90)
$4.90 will be your monthly penalty for 2024. This amount is added to your plan’s monthly premium.
