Late Enrollment Penalties

Missing your Initial Enrollment Period can be costly. Medicare Part A, Medicare Part B and Medicare Part D may charge premium penalties if you miss your initial enrollment dates, unless you qualify for a Medicare Special Enrollment Period.

Medicare Part A Premium Penalty

Part A is premium free if you or your spouse worked and paid taxes for at least 10 years. If you have to pay a premium, the penalty for late enrollment is 10%.

The Part A premium penalty is charged for twice the number of years you delay enrollment. If you wait 2 years, for example, you would pay the additional 10% for 4 years (2 x 2 years). The penalty applies no matter how long you delay Part A enrollment.

Medicare Part B Premium Penalty

The penalty for late enrollment in Part B is an additional 10% for each 12-month period that you delay it.

Let’s say your Initial Enrollment Period ended September 30, 2010, for example. Then you enroll in Part B during the General Enrollment Period in March 2013. Your late enrollment penalty would be 20% of the Part B premium, or 2 x 10%. This is because you waited 30 months to sign up, and that time period included 2 full 12-month periods.

In most cases, you have to pay the penalty every month for as long as you have Part B. If you’re under 65 and disabled, any Part B penalty ends once you turn 65 because you’ll have another Initial Enrollment Period based on your age.

Medicare Part D Premium Penalty

The penalty for late enrollment in a Part D plan is 1% of the average Part D premium for each month you delay enrollment. You pay the penalty for as long as you’re enrolled in a Medicare Part D plan.

You may delay enrolling in Medicare Part D without penalty if you qualify for Extra Help or have creditable drug coverage. If it’s been more than 63 days since you’ve had creditable coverage, then the penalty may apply.