Part B & Part D Late Enrollment Penalties

Medicare’s late enrollment penalties get used as a scare tactic, which is a shame, because they are real, they are permanent, and understanding them accurately is genuinely useful. They are also entirely avoidable — the people who get caught are almost never the ones who decided to gamble. They are the ones who thought they were covered.

Part B: 10% a year, for life

If you could have enrolled in Part B and did not, and you did not have qualifying coverage in the meantime, Medicare adds 10% of the standard premium for every full 12-month period you went without.

On the 2026 standard premium of $202.90, one full year of delay adds roughly $20 a month. Three years adds roughly $61 a month. And it is added for as long as you have Medicare — not for a year, not until you have made up the difference. Permanently.

Two details that make it worse than it first sounds.

It is calculated on the standard premium each year, so it grows. The percentage is fixed at the point you enrol, but the dollar amount is recalculated annually against the current standard premium. As that premium rises, so does your penalty.

Part B is not premium-free like Part A. Most people get Part A at no cost through their work history, which leads to a reasonable assumption that “signing up for Medicare” is handled. Part B is a separate decision with a separate premium, and it is the one with the penalty attached.

Part D: 1% a month, also for life

If you go more than 63 consecutive days after your Initial Enrollment Period without creditable prescription drug coverage, Medicare adds 1% of the national base beneficiary premium for every month you went without, rounded to the nearest ten cents.

Go three years without and you have added 36% of the base premium to your monthly cost, permanently. And like the Part B penalty, the dollar figure is recalculated each year against the current national base premium, so it rises over time even though the percentage does not.

The trap here has a very specific shape, and I see it constantly: someone takes no medication at 65, reasonably concludes a drug plan is money for nothing, skips it, and enrols at 72 when something changes. They now pay the penalty for the rest of their life, on top of the premium they are finally paying anyway. A minimal plan at 65 would have cost less than the penalty does.

There is more on how Part D itself works in Part D explained.

What actually protects you

The exception that matters is coverage through active employment — yours or your spouse’s.

If you or your spouse are still working and you are covered by that employer’s group health plan, you can generally delay Part B without penalty. When that employment or coverage ends, you get an eight-month Special Enrollment Period to enrol in Part B without penalty. For Part D, the equivalent window is two months.

For drug coverage specifically, the test is whether your plan is creditable — meaning at least as good as standard Part D. Your plan administrator must tell you, and they are required to send a notice each year. Keep those notices. If you ever need to contest a penalty, that paperwork is the evidence.

The two exceptions that don’t work

These are where the money actually gets lost, and both feel like they should count.

COBRA is not active employment. When you leave a job and continue coverage through COBRA, that coverage is not tied to anyone actively working. It does not protect you from the Part B penalty, and when it runs out it does not trigger the eight-month Special Enrollment Period. People spend eighteen months on COBRA believing they are covered, and discover the position only when they try to enrol.

Retiree coverage is not active employment either. Same reasoning, same outcome. Employer-sponsored retiree coverage may be excellent health insurance and may well be creditable for Part D purposes — but for Part B timing it does not stop the clock.

If either applies to you, take Part B on schedule. The retiree or COBRA plan then coordinates with Medicare rather than substituting for it.

The small-employer trap

This one is less well known and can be more expensive than a penalty.

If the employer has fewer than 20 employees, Medicare usually becomes the primary payer at 65 whether or not you enrolled. The group plan pays second. If you have not enrolled in Part B, there is no primary payer — and the group plan can decline the portion Medicare would have covered.

You are not merely accruing a penalty at that point. You may be substantially uninsured while believing you are fully covered.

If you are approaching 65 and still working, ask your benefits administrator one specific question: does this employer have 20 or more employees, and does our plan pay primary or secondary once I turn 65? Get the answer in writing.

The arithmetic, worked through

Abstract percentages do not convey this well, so here is what it actually looks like.

Someone who delays Part B by three years with no qualifying coverage adds 30% to their premium. On the 2026 standard premium of $202.90, that is about $61 a month, or roughly $730 a year. If they live another 20 years on Medicare, and the standard premium rises as it historically has, the cumulative cost runs well into five figures — for three years of coverage they chose not to buy.

Someone who delays Part D by five years adds 60% of the national base beneficiary premium. That is a smaller monthly figure than the Part B penalty, but it behaves identically: permanent, recalculated annually, and payable on top of whatever their plan charges.

The two stack. Somebody who assumed COBRA covered them and delayed both for two years carries a Part B penalty and a Part D penalty, for life, on top of premiums they now pay anyway.

The comparison worth making is not “penalty versus no penalty”. It is “penalty for life versus the cost of a minimal plan during the years you did not need it”. The minimal plan wins in essentially every scenario, which is why the advice is so unhesitating.

Where the clock starts

Your Initial Enrollment Period runs seven months: the three months before the month you turn 65, that month, and the three months after. Enrolling in the first three months means coverage starts on the first day of your birthday month; enrolling later means it slides.

If you were born on the first of a month, Medicare treats you as attaining 65 in the previous month, and every window shifts a month earlier.

The enrollment window checker will give you your exact dates from your date of birth, born-on-the-first rule included. Full detail on the windows is in Medicare enrollment periods.

If you have already missed it

Late is not the same as too late, and the position is usually more recoverable than people fear.

The General Enrollment Period runs 1 January to 31 March every year. You can enrol in Part B then, with coverage beginning the first of the month after you sign up. A penalty may apply, but coverage starts.

Check whether a Special Enrollment Period applies first. If you had employer coverage through active employment and it ended within the last eight months, you may still be inside the penalty-free window. That is worth confirming before assuming a penalty. The qualifying events are covered in special enrollment periods.

Extra Help eliminates the Part D penalty outright. If you qualify for the low-income subsidy, the Part D late penalty goes away. The income limits are higher than most people assume and plenty who qualify never apply. It costs nothing to check.

Reconsideration is possible in specific circumstances — if you had creditable coverage that was not recorded, or if you were given incorrect information by a federal employee. It is not a general appeal, and evidence matters, but it exists.

What to do

Approaching 65 and not working: enrol in Part A and Part B during your Initial Enrollment Period, and take a Part D plan even if you take nothing. Enrol in the first three months rather than the last three.

Approaching 65 and still working: confirm the employer has 20 or more employees, confirm the plan pays primary, and confirm in writing that the drug coverage is creditable. Then you can safely delay Part B — and note the eight-month clock that starts when the employment ends.

On COBRA or retiree coverage: take Part B on schedule. Neither protects you.

Already past the window: check for a Special Enrollment Period first, then look at the General Enrollment Period, then check Extra Help eligibility. There is usually more room than it appears.

The short version

• Part B: 10% per full year of delay, permanent, recalculated annually as the premium rises.
• Part D: 1% per month without creditable coverage, permanent, also rising.
• Coverage through active employment protects you. COBRA and retiree coverage do not.
• Under 20 employees means Medicare pays primary at 65 — delaying can leave you exposed.
• Extra Help wipes out the Part D penalty entirely.

If you are not certain where you stand, that is a short conversation with a definite answer — and it is far better had before the deadline than after.