Medicare Late Enrollment Penalties: How Parts A, B and D Work

Signing up for Medicare late can cost you money every month for the rest of your life. Medicare calls these charges late enrollment penalties, and they are easy to trigger by accident, for example by dropping drug coverage for a few months or assuming a job-based plan counts when it doesn't.

Medicare.gov describes three features that all the penalties share. They are added to your monthly premium. They are not a one-time late fee. And they usually last as long as you have that type of coverage, which for most people means a lifetime penalty. The Part A penalty is the exception.

This guide explains how each penalty is calculated, using Medicare.gov's 2026 examples, and how to avoid or dispute one. It is an independent guide and general information only, not insurance, financial or legal advice, and it is not affiliated with Medicare or CMS. For questions about your own enrollment timing, a State Health Insurance Assistance Program (SHIP) counselor can help at no cost.

Why penalties exist and who can avoid them

Medicare.gov says it is important to sign up during your Initial Enrollment Period unless you have other coverage similar in value to Medicare, such as coverage from an employer. The penalties grow the longer you go without that kind of coverage.

The details of when each enrollment period opens and closes are covered in this site's Enrolling & Choosing guides. This article focuses on what a late start costs and how to keep that cost at zero.

The Part A penalty: only if you have to buy Part A

Most people never face a Part A penalty, because most people get premium-free Part A. The penalty only applies if you have to buy Part A and don't buy it when you're first eligible.

Medicare.gov explains it this way: your monthly Part A premium may go up 10%, and you pay that higher premium for twice the number of years you didn't sign up. Medicare.gov's example: if you were eligible for Part A for 2 years but didn't sign up, you pay the higher premium for 4 years. You usually don't pay a penalty if you meet the conditions for a Special Enrollment Period.

For context, Medicare.gov lists the 2026 monthly Part A premium for people who must buy it as either $311 or $565, depending on how long they or their spouse worked and paid Medicare taxes.

The Part B penalty: charged for each full year

For Part B, Medicare.gov says you pay an extra 10% for each full 12-month period you could have signed up but didn't. The penalty lasts as long as you have Part B, and it grows the longer you wait.

Medicare.gov's 2026 example shows the math. Someone who waited 2 full years (24 months) without qualifying for a Special Enrollment Period owes a 20% penalty. For 2026, Medicare.gov calculates it as the standard Part B premium of $202.90 plus a 20% penalty of $40.58, or $243.48, rounded to a monthly premium of $243.50.

Two details are worth knowing:

• The penalty is figured on the standard premium. SSA's operations manual (POMS HI 01101.031) says that for people who pay an income-related adjustment, Part B late enrollment surcharges are still calculated on the standard monthly premium.
• Because the penalty is a percentage of the standard premium, its dollar amount changes whenever the standard premium changes.

Medicare.gov lists two main ways around the Part B penalty: you generally won't pay one if you qualify for a Special Enrollment Period, or if you enroll in a Medicare Savings Program, the state programs that help pay Part B premiums for people with limited income and resources.

The Part D penalty: charged by the month

The drug coverage penalty is calculated by the month. Medicare.gov says you pay an extra 1% for each month (12% a year) if you don't join a Medicare drug plan when you first get Medicare, or if you go 63 days or more without creditable drug coverage. Creditable coverage is drug coverage expected to pay, on average, at least as much as Medicare drug coverage.

The penalty is based on the national base beneficiary premium, not your own plan's premium. For 2026, Medicare.gov lists that base premium at $38.99. Its 2026 example: someone who waited 14 months without creditable coverage owes a 14% penalty, which Medicare.gov calculates as $38.99 times 0.14, or $5.46, rounded to $5.50 a month added to the plan premium for 2026.

Because the base premium changes each year, the penalty amount can change each year too. Medicare.gov says the penalty is added for as long as you have Medicare drug coverage, even if you switch plans.

You generally won't pay a Part D penalty if you had creditable drug coverage, or if you qualify for Extra Help. Medicare.gov's definition says creditable coverage could include drug coverage from a current or former employer or union, TRICARE, the Indian Health Service, the VA, or individual health insurance coverage, but only if it meets the creditable standard.

Disputing a Part D penalty

After you join a drug plan, the plan tells you if you owe a penalty. If you think it's wrong, perhaps because you did have creditable coverage, Medicare.gov says you may be able to ask for a reconsideration, which is decided by a Medicare contractor not connected with your drug plan. Your plan sends the information and form.

Key points from Medicare.gov's guidance:

• Return the form no later than 60 days from the date on the letter saying you owe a penalty. If you're later than that, you must explain why.
• Include proof of creditable coverage, such as a copy of your prescription drug card or a notice of creditable coverage from an employer or union plan.
• The contractor generally decides within 90 days, and may take an extra 14 days for good cause.
• You must keep paying the penalty with your premium while you wait. Drug plans can disenroll members who don't pay their premiums.
• You generally won't get another chance at a reconsideration if you were already paying a penalty under a different drug plan.

Habits that prevent penalties

• Keep every notice of creditable drug coverage you receive from an employer, union or other plan. It is your proof if a penalty is ever questioned.
• Before you drop or change coverage, check the calendar. A gap of 63 days or more without creditable drug coverage starts the Part D clock.
• Ask your employer or benefits office in writing whether your coverage counts as creditable for drug coverage, and whether your situation qualifies you for a Special Enrollment Period for Part B.
• If money is tight, look into Extra Help and Medicare Savings Programs. Medicare.gov says people who get Extra Help don't pay the Part D penalty, and people who enroll in a Medicare Savings Program generally won't pay the Part B penalty.
• Watch out for callers who say you owe a Medicare penalty and must pay immediately. The Federal Trade Commission warns that no government agency will demand payment by wire transfer, gift card, cryptocurrency or a payment app.

Key takeaways

• Late enrollment penalties are added to your monthly premium and usually last as long as you have that coverage.
• The Part A penalty (only for people who must buy Part A) can, per Medicare.gov, raise the premium 10% for twice the number of years you delayed.
• For 2026, Medicare.gov's example shows a 2-year Part B delay raising the $202.90 standard premium to $243.50.
• The Part D penalty is 1% per month of the national base beneficiary premium, which Medicare.gov lists at $38.99 for 2026.
• Creditable coverage, a Special Enrollment Period, Extra Help or a Medicare Savings Program can prevent a penalty; keep your coverage notices.

Sources

• Medicare.gov (CMS), Avoid late enrollment penalties
• Medicare.gov (CMS), Costs: What you pay in 2026
• Social Security Administration, POMS HI 01101.031: How IRMAA is Calculated and How IRMAA Affects the Total Medicare Premium (December 2, 2025)
• Medicare.gov (CMS), Help with drug costs
• Federal Trade Commission, How To Avoid a Government Impersonation Scam