Medicare Late Enrollment Penalties  

Late Enrollment Penalty
If you don't sign up for Medicare Part A when you’re first eligible, your monthly premium may increase by 10%. Note this may not apply if you’re eligible for premium-free Part A or if you meet certain conditions and can sign up for Part A during a special enrollment period.

How much is the penalty?
You’ll have to pay the higher premium for twice the number of years you could have had Part A but didn’t sign up.  

What does that mean? 
Here’s an example: If you were eligible for Part A for two years but didn’t sign up, you’ll have to pay the higher premium for four years. 

Late Enrollment Penalty

In most cases, if you don’t sign up for Part B when you’re first eligible, you’ll have to pay an extra 10% for each full 12-month period you could have signed up for Part B but didn’t. You’ll have to pay this penalty for as long as you have Part B, in addition to the standard Part B monthly premium ($185 in 2025).

How much is the penalty?

It depends. Here’s an 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.

Here’s the math:

$185 (2025 Part B standard premium) + $37 (20% of $185 late enrollment penalty) = $222

$222 will be your Part B monthly premium for 2025. This amount is rounded to the nearest $0.10 and includes the late enrollment penalty. 

Late Enrollment Penalty

This penalty is added to your monthly Medicare prescription drug plan premium as long as you have prescription coverage. 

How much is the penalty?

The penalty is 1% (per month) of the national base beneficiary premium ($36.78 for 2025), times the number of full, uncovered months you didn’t have Part D or creditable coverage. This penalty is added to your monthly Medicare prescription drug plan premium for as long as you have prescription coverage. It may decrease or increase as the national base beneficiary premium changes.

Here’s an example: 

1. It’s 2025. Jane is eligible for Medicare, and her Initial Enrollment Period ended on May 31, 2023. 
2. Since Jane didn't have creditable prescription drug coverage for 19 months (from June 2023 – December 2024), her penalty in 2025 is 19% (1% for each of the 19 months) of $36.78 (the national base beneficiary premium for 2025). 
3. Since the monthly penalty is always rounded to the nearest $0.10, she pays $7.00 each month in addition to her plan’s monthly premium.

Here’s the math:

.01 (1% penalty) x 19 months = .19 (19% penalty) 
.19 × $36.78 (2025 base beneficiary premium) = $6.98 
$6.98 rounded to the nearest $0.10 = $7.00 
Jane’s monthly late enrollment penalty for 2025 = $7.00 

1. Join an all-in-one Medicare Advantage Prescription Drug Plan when you’re first eligible. You won’t have to pay a penalty, even if you’ve never had prescription drug coverage before.

2. Don’t go 63 days or more without Medicare prescription drug coverage or other creditable coverage

   Your current plan should tell you each year if your prescription drug coverage is creditable. This information may come in a letter or newsletter, so hang onto it in case you enroll in a Medicare prescription drug plan later.

   Creditable coverage is prescription drug coverage — like from an employer — that pays at least as much as Medicare’s prescription drug coverage. If you have it when you become eligible for Medicare, you can usually delay enrolling in a Medicare prescription drug plan without a penalty.

3. Let your plan know if you had prescription drug coverage.

   When you join a Medicare prescription drug plan, they may send you a letter asking if you had creditable prescription drug coverage. Complete the form and return it by the deadline in the letter. If you don’t tell them about your creditable coverage, you may have to pay a late enrollment penalty.