Medicare penalizes beneficiaries who do not enroll when they are first eligible and do not have other qualifying coverage. These penalties are added to your monthly premiums, and in most cases, you pay them for as long as you have Medicare. This guide explains all three penalty types, shows you exactly how they are calculated, and outlines the steps you can take to avoid them. For a broader overview of when to sign up, see our Medicare eligibility requirements guide.
Overview: All Three Medicare Penalties
Medicare has three separate late enrollment penalties, one for each part that charges a premium:
| Penalty | How It Is Calculated | Duration | 2026 Base Premium |
|---|---|---|---|
Part A | 10% of the Part A premium for each full 12-month period you delayed | Twice the number of years you delayed | $565/month (full premium) |
Part B | 10% of the standard premium for each full 12-month period you delayed | For life (as long as you have Part B) | $202.90/month |
Part D | 1% of the national base beneficiary premium x number of uncovered months | For life (as long as you have Part D) | $38.99/month (base) |
These Penalties Are Permanent
Part B and Part D penalties never go away. They are recalculated each year as premiums change, and they are added to your monthly bill for life. The only way to eliminate them is to avoid triggering them in the first place.
Medicare Part A Late Enrollment Penalty
Most people get Part A premium-free because they (or their spouse) paid Medicare taxes for at least 40 quarters (10 years). The Part A penalty only applies to people who must purchase Part A because they do not have enough work credits.
| Factor | Details |
|---|---|
Who it affects | People with fewer than 40 quarters of Medicare-taxed employment who do not sign up during their Initial Enrollment Period |
Penalty amount | 10% of the monthly Part A premium for each full 12-month period you could have enrolled but did not |
2026 full Part A premium | $565/month (fewer than 30 quarters) or $318/month (30-39 quarters) |
Duration | Twice the number of years you delayed enrollment |
Example | If you delayed 2 years, you pay a 20% surcharge for 4 years |
Unlike Part B and Part D penalties, the Part A penalty is temporary. It eventually expires after you have paid it for twice the length of your delay period.
Medicare Part B Late Enrollment Penalty
The Part B penalty is the most common and the most costly over time because it lasts for life. It applies if you did not sign up for Part B when you were first eligible and did not have creditable coverage from an employer with 20 or more employees.
| Factor | Details |
|---|---|
Who it affects | Anyone who delays Part B enrollment without qualifying employer coverage (from an employer with 20+ employees) |
Penalty amount | 10% of the standard Part B premium for each full 12-month period you were eligible but not enrolled |
2026 standard premium | $202.90/month |
Duration | Permanent (for life, as long as you have Part B) |
Example | Delayed 3 years = 30% penalty = $60.87/month added to your premium in 2026 |
Part B Penalty Example Scenarios
| Years Delayed | Penalty Percentage | Monthly Surcharge | Total Monthly Premium |
|---|---|---|---|
1 year | 10% | $20.29 | $223.19 |
2 years | 20% | $40.58 | $243.48 |
3 years | 30% | $60.87 | $263.77 |
5 years | 50% | $101.45 | $304.35 |
The penalty percentage stays the same, but the dollar amount changes each year as the standard Part B premium is adjusted. For more details, see our dedicated Part B late enrollment penalty guide.
Medicare Part D Late Enrollment Penalty
The Part D penalty applies if you go 63 or more consecutive days without Medicare drug coverage or other creditable prescription drug coverage after your Initial Enrollment Period ends.
| Factor | Details |
|---|---|
Who it affects | Anyone who goes 63+ consecutive days without creditable drug coverage after their IEP |
Penalty amount | 1% of the national base beneficiary premium x number of full uncovered months |
2026 national base premium | $38.99/month |
Duration | Permanent (for life, as long as you have Part D or Medicare Advantage with drug coverage) |
Example | 14 uncovered months = 14% x $38.99 = $5.46/month added to your drug plan premium |
Part D Penalty Example Scenarios
| Months Without Coverage | Penalty Percentage | Monthly Surcharge | Annual Extra Cost |
|---|---|---|---|
12 months | 12% | $4.68 | $56.16 |
24 months | 24% | $9.36 | $112.32 |
36 months | 36% | $14.04 | $168.48 |
60 months (5 years) | 60% | $23.39 | $280.68 |
The Part D penalty is rounded to the nearest $0.10. It is recalculated each year as the national base beneficiary premium changes. For more details, see our dedicated Part D late enrollment penalty guide.
How to Avoid Medicare Penalties
The simplest way to avoid all penalties is to enroll in Medicare during your Initial Enrollment Period (the 7-month window around your 65th birthday). If you miss that window, here are the other ways to stay penalty-free:
| Penalty | How to Avoid It |
|---|---|
Part A | Enroll during your IEP. If you miss it, enroll during the General Enrollment Period (January 1 through March 31 each year). Coverage starts July 1. |
Part B | Maintain creditable employer coverage from an employer with 20+ employees. When that coverage ends, enroll during your 8-month Special Enrollment Period. See our working past 65 guide. |
Part D | Maintain creditable drug coverage (employer plan, VA, TRICARE, or other qualifying coverage). When it ends, enroll in a Part D plan within 63 days. |
Request a Certificate of Creditable Coverage
When you leave employer coverage, ask your employer or plan administrator for a certificate of creditable coverage. This document proves you had qualifying coverage and protects you from penalties when you enroll in Medicare. Keep it in a safe place.
Special Enrollment Periods That Prevent Penalties
Several Special Enrollment Periods allow you to sign up for Medicare outside of standard enrollment windows without triggering a penalty:
Employer Coverage SEP (Part B): 8-month window starting when your employer coverage or employment ends (whichever comes first). Only applies if the employer has 20+ employees.
Loss of Creditable Coverage SEP (Part D): 63-day window after your creditable drug coverage ends. Your former plan must notify you that coverage is ending.
Moving SEP: If you move out of your plan's service area, you get a special period to join a new plan.
5-Star Plan SEP: You can switch to a 5-star rated Medicare Advantage or Part D plan once per year.
Extra Help/LIS SEP: If you qualify for Medicare Extra Help (Low-Income Subsidy), you can change Part D plans once per quarter.
Can You Get a Penalty Removed?
In most cases, Medicare penalties cannot be removed once they are applied. However, there are limited circumstances where you may be able to challenge a penalty:
Employer coverage error: If you were told your employer coverage was creditable but it was not, you may be able to appeal.
Medicare error: If Medicare or Social Security gave you incorrect information that caused you to delay enrollment, you can request a reconsideration.
Extra Help qualification: If you qualify for Medicare Extra Help (LIS), your Part D penalty is eliminated for as long as you receive Extra Help.
Equitable relief: In rare cases, CMS may grant relief if you can prove the delay was due to circumstances beyond your control.
To appeal a penalty, contact Medicare at 1-800-MEDICARE (1-800-633-4227) or submit a written request to your plan or the Social Security Administration.
Common Situations That Trigger Penalties
These are the most common scenarios where people unknowingly trigger late enrollment penalties:
| Situation | Penalty Risk | What to Do |
|---|---|---|
Retiring at 65 but not signing up for Part B | Part B penalty | Enroll during your IEP even if you have retiree coverage (retiree plans are secondary to Medicare) |
Working past 65 at a small employer (fewer than 20 employees) | Part B penalty | Small employer coverage is not creditable for Part B. Enroll during your IEP. |
COBRA coverage after 65 | Part B and Part D penalties | COBRA is never creditable for Medicare purposes. Enroll in Medicare before or when COBRA starts. |
Marketplace (ACA) plan after 65 | Part B and Part D penalties | Marketplace plans are not creditable once you are Medicare-eligible. Enroll in Medicare. |
Forgetting Part D when you turn 65 | Part D penalty | Enroll in a standalone Part D plan or Medicare Advantage with drug coverage during your IEP. |
Spouse's employer plan ends and you wait to enroll | Part B penalty | Use your 8-month SEP immediately when coverage ends. Do not wait for GEP. |
Frequently Asked Questions
Do Medicare penalties ever go away?
Part A penalties are temporary (lasting twice the delay period). Part B and Part D penalties are permanent and last for as long as you have that coverage.
Is COBRA considered creditable coverage for Medicare?
No. COBRA is never considered creditable coverage for Medicare Part B or Part D purposes. If you are eligible for Medicare and on COBRA, you should enroll in Medicare to avoid penalties.
Does my employer plan count as creditable coverage?
For Part B, only coverage from an employer with 20 or more employees counts. For Part D, your employer must send you a notice each year confirming whether your drug coverage is creditable.
What if I did not know I was supposed to sign up?
Unfortunately, lack of awareness does not exempt you from penalties. Medicare sends notices, but it is ultimately your responsibility to enroll on time. In rare cases, you may be able to appeal if you received incorrect information from an official source.
Can I avoid the Part D penalty by enrolling in Medicare Advantage?
Yes, if your Medicare Advantage plan includes drug coverage (MA-PD). As long as you have creditable drug coverage without a gap of 63+ days, you will not trigger the Part D penalty.
How do I know if my coverage is creditable?
Your plan must send you a notice each year (usually in the fall) stating whether your coverage is creditable. If you are unsure, contact your plan administrator or HR department and request a written confirmation.
I am still working at 67. Do I need to sign up for Medicare?
If your employer has 20 or more employees and offers creditable group coverage, you can delay Medicare Part B without penalty. When you stop working or lose that coverage, use your 8-month Special Enrollment Period to sign up.
Need Help Understanding Your Medicare Options?
Our licensed Medicare experts can help you find the right coverage for your needs.