02/10/2025
Avoid 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.
Late enrollment penalties:
Are added to your monthly premium.
Are not a one-time late fee.
Are usually charged for as long as you have that type of coverage (for most people, that’s a lifetime penalty). The Part A penalty is different.
Go up the longer you wait to sign up – they’re based on how long you go without coverage similar to Medicare. Find out when you should sign up to avoid penalties.
Part A late enrollment penalty
Some people have to buy Part A because they don't qualify for premium-free Part A.
Do I qualify for premium-free Part A?
If you have to buy Part A, and you don't buy it when you're first eligible for Medicare, your monthly premium may go up 10%.
You'll have to pay the penalty for twice the number of years you didn't sign up.
Example:
If you were eligible for Part A for 2 years but didn't sign up, you'll have to pay the higher premium for 4 years. Usually, you don't have to pay a penalty if you meet certain conditions that allow you to sign up for Part A during a Special Enrollment Period. Find out if you’re eligible for a Special Enrollment Period.
Part B late enrollment penalty
Generally, you won’t have to pay a Part B penalty if you qualify for a Special Enrollment Period. Learn more about Special Enrollment Periods.
You’ll pay an extra 10% for each year you could have signed up for Part B, but didn’t.
You may also pay a higher premium depending on your income.
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 ($185 in 2025).
$185 (2025 Part B standard premium)
+ $37 (20% [of $174.70] late enrollment penalty)
$222 will be your Part B monthly premium for 2025. This amount is rounded to the nearest $.10 and includes the late enrollment penalty.
Part D late enrollment penalty
Generally, you won’t have to pay a Part D penalty if:
You have creditable drug coverage (coverage that’s similar in value to Part D) OR
You qualify for Extra Help
You’ll pay an extra 1% for each month (that’s 12% a year) if you:
Don’t join a Medicare drug plan when you first get Medicare.
Go 63 days or more without creditable drug coverage.
You may also pay a higher premium depending on your income.
After you join a Medicare drug plan, the plan will tell you if you have to pay a penalty and what your premium will be.
What if I don't agree with the Part D late enrollment penalty?
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" ($36.78 in 2025).
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.
In 2025:
$36.78 (2025 national base beneficiary premium)
X 0.14 (14% penalty)
$5.15 (rounded to the nearest $0.10 = $5.20)
$5.20 will be your monthly penalty for 2025. This amount is added to your plan’s monthly premium for 2025.
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