Your Guide to Medicare Late Enrollment Penalties
No one likes late fees—not for library books, credit card payments, or anything else.
That’s why it’s particularly important for people nearing Medicare eligibility to know the rules when it comes to late enrollment penalties.
There are three parts of Medicare that can charge you a late enrollment penalty: Part A, Part B, and Part D. (Part C, or Medicare Advantage, is an optional alternative to Parts A and B, so there is no penalty for not enrolling in it.) See our Medicare guide for an explanation of the different parts.
Late enrollment penalties for Medicare
Duration you pay
10% of your Part A premium
12 months after you could have enrolled but didn’t
Twice the number of years you weren’t enrolled
10% of your Part B premium
12 months after you could have enrolled but didn’t
As long as you are on Medicare
1% of the national base premium, multiplied by number of months without sufficient coverage
When you don’t have sufficient coverage for 63 days or more
As long as you are on a Medicare drug program
This article will explain:
Do you have questions about enrollment timing for Medicare Supplement Plans (also known as Medigap plans)? If you don’t get the timing right, you can be charged more (or refused a plan) based on your health. Find out exactly when to enroll in Medicare Supplement Plans.
Why does Medicare charge late enrollment penalties?
The penalties provide extra incentive for seniors to enroll when the Medicare program expects them to. Without the penalty, some people may opt out of Medicare, perhaps thinking they don’t need insurance if they are generally healthy. They might even think they are saving the government money. However, from Medicare’s perspective, the opposite is true.
When healthy people opt out, it costs the program more per person because it is covering older, sicker people on average. This leads to higher premiums for the people who do sign up for Medicare. Higher premiums could cause still more people to drop out, driving premiums even higher.
With everyone enrolled in Medicare who is eligible, costs and risks are spread across many people, keeping premiums as low as possible for everyone.
Are there exceptions to who is charged late enrollment penalties?
Yes. Medicare enrollees with low incomes who get assistance with their health costs (either through Medicaid or the Extra Help program) may be exempt from late enrollment penalties.
You also won’t pay a penalty, even if you enroll after your Initial Enrollment Period, if you can prove one of these:
- You were still working and had employer health coverage.
- You were an international volunteer with health coverage.
- You were given incorrect information from a government worker.
In addition, the federal government will, at times, issue enrollment extensions to some people affected by a weather emergency or other major disaster.1
Part A late enrollment penalties
The vast majority of people on Medicare (99%) pay nothing for Part A because they (or their spouse) worked the required 40 quarters while contributing Medicare payroll taxes.2 However, people who aren’t entitled to free Part A coverage can pay to get it, and these folks can be charged penalties for enrolling late.
When are Part A penalties charged?
Medicare charges a late enrollment penalty for every 12-month period that you could have enrolled in Part A but didn’t. Again, this only applies to the very few people who don’t qualify for free Part A coverage through a work record (theirs or a spouse’s).
How much is the Part A penalty?
The Part A late enrollment penalty is 10% added to your monthly premium.
How long will I have to pay the Part A penalty?
Fortunately, the Part A late enrollment penalty is limited. You pay a higher monthly premium for double the number of years you could have enrolled in Part A but didn’t. So if you delayed for one 12-month period (one year), you’ll pay the penalty for two years.
Part B late enrollment penalties
Part B penalties are fairly uncommon. In 2018, just 1.4% of people with Part B coverage paid the late enrollment penalty.3 But it’s still important to know how the late penalties work so you can be sure to avoid them.
When are Part B penalties charged?
Medicare charges a late enrollment penalty for every 12-month period that you could have enrolled in Part B but didn’t. This is the same standard that Part A uses.
How much is the Part B penalty?
The Part B late enrollment penalty is an additional 10% tacked onto your monthly premium, same as Part A.
How long do I have to pay it?
Here is where the Part A and Part B penalties differ. With Part B, you will pay the late enrollment penalty for as long as you are on Medicare.
Part D late enrollment penalties
You can be charged a late enrollment penalty for Part D if, for a period of time, you don’t have “creditable coverage,” a term for prescription drug coverage that meets or exceeds Medicare’s standards. In 2018, about 2 million people were paying Part D late enrollment penalties.4
When are Part D penalties charged?
You’ll pay a penalty when you don’t have creditable coverage for 63 days or more, anytime after your Initial Enrollment Period.
How much is the Part D penalty?
The calculation for Part D penalties is somewhat involved. It starts by calculating 1% of what Medicare calls the "national base beneficiary premium," which is $32.74 in 2020.5 Then, this figure is multiplied by the number of months you didn’t have sufficient drug coverage and rounded to the nearest $0.10.
The penalty amount can go up or down each year as the national base beneficiary premium changes.
How long do I have to pay it?
You must pay the Part D late enrollment penalty, as part of your monthly premium, for as long as you are on a Medicare drug program.
How to avoid Medicare penalties
Most people avoid the penalties in two ways:
- Sign up for Medicare during your Initial Enrollment Period, a seven-month period around your 65th birthday.
- If you have employer-sponsored or other health coverage after age 65, sign up for Medicare as soon as it ends. You’ll have a Special Enrollment Period of two months to do so.
Can I appeal a Medicare penalty?
Yes. When you receive notice of the penalty by letter, typically there will be instructions on how to appeal it. You’ll need to submit a reconsideration request form and any documentation that supports your position.6
You can also contact your Medicare plan or your State Health Insurance Assistance Program (SHIP) for help.
When should I enroll in Medicare to avoid all penalties?
You’ll become eligible for Medicare when you reach age 65. The good news is that you have a generous seven-month window to sign up, which Medicare calls your Initial Enrollment Period (IEP). Your IEP is the month your 65th birthday falls in, plus the three months before and after.
Some people don’t need to do anything to enroll in Medicare. If you claimed Social Security retirement benefits at ages 62, 63, or 64, the Social Security Administration will automatically enroll you in Medicare Parts A and Part B when you reach 65. You will receive a Medicare card in the mail shortly before your 65th birthday.
If you are not automatically enrolled in Medicare (if, for example, you are waiting to claim Social Security benefits), you are responsible for enrolling yourself during the IEP. If you don’t, you may be charged penalties.
For an overview of all the Medicare enrollment periods, see our Medicare Enrollment Periods Cheat Sheet.
The bottom line
The easiest way to avoid Medicare late enrollment penalties is to be aware of the enrollment periods and deadlines. Most people avoid penalties by applying for Medicare right around their 65th birthday or soon after they lose health coverage through an employer.
- Social Security Administration, “Medicare Enrollment for Individuals Affected by a Weather-Related Emergency or Major Disaster”
- Centers for Medicare and Medicaid Services, “2019 Medicare Parts A & B Premiums and Deductibles”
- Congressional Research Service, “Medicare: Part B Premiums,” p. 5–6
- The Medicare Payment Advisory Commission, “Report to the Congress: Medicare and the Health Care Delivery System,” June 2019, p. 9
- Centers for Medicare and Medicaid Services, “Part D Late Enrollment Penalty”
- Centers for Medicare and Medicaid Services, “If You Disagree with Your Late Enrollment Penalty”
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