Medicare, the federal health insurance program designed for adults age 65 and older and some younger individuals with qualifying disabilities, provides life-saving health insurance to retirees who no longer have access to employer-based options.
As critical as Medicare is for older adults, it comes with one potentially expensive pitfall: If you miss certain enrollment deadlines, you’ll end up paying more — possibly for the rest of your time on Medicare.
Here we explain Medicare late enrollment penalties and how to avoid them.
[Read: When Can You Sign Up for Medicare?]
Parts of Medicare With Late Enrollment Fees
Here’s what to watch out for when it comes to penalties for different parts of Medicare:
Part A
Part A of Medicare is for hospitalization and health care services received while in the hospital. Most people don’t need to pay a premium for Part A, but you do, you’ll have to pay a penalty if you don’t enroll when you first become eligible for Medicare.
“Your premiums will be increased 10% for twice the number of years you went without enrolling beyond your original eligibility period,” explains Whitney Stidom, vice president of sales enablement with eHealth Inc., a health insurance broker and online resource provider headquartered in Santa Clara, California.
Part B
Medicare Part B covers outpatient care, including doctor visits, durable medical equipment, ambulance services, blood work and other services rendered outside of a hospital setting.
Everyone who has original Medicare pays a premium for Part B, which usually comes out of your Social Security benefits. But if you don’t enroll in Medicare when you first become eligible for it, your premium will be increased 10% for every year you were eligible for Part B but did not enroll, Stidom explains.
Part D
Medicare Part D covers prescription drugs. If you don’t sign up for a Medicare Part D plan as soon as you’re eligible, you run the risk of incurring a penalty. That penalty increases your premium by 1% for each month you delay enrolling beyond your initial enrollment period. That adds up to 12% per year. The penalty is also triggered if you go without another form of creditable coverage, such as a plan you might have through an employer, for more than 63 days. (Creditable health insurance means health insurance that follows the minimum essential coverage standards set by the Affordable Care Act or other federal-sponsored health coverage.)
Examples of penalty scenarios
— Penalty scenario 1: Part A late enrollment penalty. You don’t qualify for premium-free Part A Medicare coverage. (This happens to people who haven’t paid Medicare taxes while working for long enough, usually 10 years.) If you turned 65 in 2022 but didn’t sign up for Medicare until 2024, and you didn’t have other creditable coverage during that time — such as through an employer or a state health care marketplace — you’ll have to pay the higher Medicare premium for four years, until 2028.
— Penalty scenario 2: Part B late enrollment penalty. If you didn’t sign up for Part B when you turned 65 or during a special enrollment period, you can expect to pay an extra 10% per year. So if you waited that same two years — 24 months — to sign up for Part B, you’ll have to pay a 20% late enrollment penalty. That’s 10% for each full 12-month period that you could have signed up, which is added to the standard Part B monthly premium of $185 in 2025. In this scenario, you’d have to pay $222 for your Part B monthly premium for 2025.
— Penalty scenario 3: Part D late enrollment penalty. If you have creditable drug coverage from another insurance plan or qualify for the Extra Help program (more on that below), you won’t have to worry about a penalty. But if you don’t have these things and you miss your enrollment period, you’ll be charged an extra 1% for each month you don’t have coverage. That’s 12% per year, so if you forego this coverage for two years, you’ll be looking at a 24% penalty. That penalty is calculated on the national base beneficiary premium, which is $36.78 in 2025, so in this scenario, you’d pay an extra $8.80 per month for a total of $45.60 in 2025.
[Read: Medicare vs. Medicare Advantage: How to Choose.]
Exceptions to Medicare Late Enrollment Penalties
It’s clear that delaying enrollment into Medicare much beyond your 65th birthday could have expensive consequences. But there are some exceptions to these penalties.
“Let’s say you’re 66 years old and you lose your job. You may be able to enroll in Parts A, B and D due to a life-changing event,” Gross explains.
Such events trigger special enrollment periods.
Special enrollment periods for those with employer coverage
Medicare allows you to enroll during special enrollment periods when certain events happen in your life. For example, if you move, retire or otherwise lose access to employer-sponsored health insurance, you have a set period of time during which to sign up for Medicare, usually either two or three months depending on the situation.
Special enrollment periods also allow you to enroll in health coverage or switch plans outside of open enrollment, which runs annually from October 15 to December 7.
In addition, you can enroll in Medicare Part B during the annual general enrollment period, which takes place from January 1 through March 31. However, enrolling during a general enrollment period may result in a penalty depending on the situation.
Other circumstances that may exempt you from penalties
If you’ve had insurance coverage through Medicaid, but your circumstances change and you’re no longer eligible, you can join Medicare. You have three full months from the date you’re no longer eligible or the date you’re notified that you’re no longer eligible (whichever is later) to enroll in a Medicare Advantage plan or Medicare drug plan.
Similarly, if you’ve dropped your coverage in a Program of All-Inclusive Care for the Elderly (PACE) plan, you have two full months after the month you drop your PACE plan to join a Medicare Advantage plan or Medicare drug plan.
If you have a disability or a limited income, you might qualify for the Extra Help program, which will help cover the cost of your prescriptions as well as the premium for all of your coverages, Gross says.
[Read: What Medicare Doesn’t Cover and How to Manage Costs]
How to Avoid Late Penalties
There are several ways you can ensure you’ll avoid having to pay late penalties on your Medicare coverage:
— Enroll on time. “Every time I speak with a possible client or one of my clients who is under the age of 65, I tell them that they only have three months before or three months after their 65th birthday to sign up for Medicare without penalties,” says Adria Goldman Gross, a medical bill advocate with MedWise Insurance Advocacy, a division of MedWise Billing Inc. in Monroe, New York, and coauthor of “Solved! Curing Your Medical Insurance Problems.”
— Leverage special enrollment periods. If for some reason you didn’t enroll on time, you may have another option to do so during a special enrollment period. Taking advantage of these periods could save you a lot of money.
— Provide proof. If you’ve had coverage elsewhere, you can submit proof to Medicare to reset the clock on some of the late enrollment penalties. However, “not all health insurance is considered creditable,” Stidom warns, so check with your insurance provider to find out whether that coverage is adequate.
— Don’t forget Part D. Enroll in Part D within the first two months of your special enrollment period if you qualify. You have 63 days to enroll after losing creditable prescription coverage.
What to Do If You Missed Your Enrollment Period
If you’ve missed your enrollment period, don’t panic. There are a few things you can do to minimize the potential penalties.
If you missed your Part B open enrollment period, for instance, apply during the general enrollment period, advises Jack Glasker, designated partner at Affordable Healthcare Solutions, a father-son health insurance brokerage firm based in Westfield, New Jersey. You may still receive a penalty, but the sooner you sign up, the lower that penalty will be.
With premium-free Medicare Part A, on the other hand, federal programs such as Medicaid typically work with people to obtain Part B, Glasker says.
And if, due to a specific situation — a trauma or hardship, such as a house fire or a medical condition that made it impossible for you to register on time — you didn’t sign up for Medicare during an enrollment period you were eligible for, you can submit an application for a special enrollment period for exceptional conditions.
Appeal late enrollment penalties
Medicare has an appeals process for individuals who “feel they were unfairly given a late enrollment penalty” for Part B. You can contact the Social Security Administration office or submit a Request for Reconsideration form. There is also an appeals process for Part D that you can access if your think a late penalty is unfair.
The Impact of Delaying Medicare Enrollment
If you fail to enroll in Medicare when you become eligible and you don’t have other creditable coverage, you risk several consequences, Stidom notes:
— Gaps in health coverage
— Potential higher premiums
— Long-term financial impact
“The penalties last a lifetime and the only way to get out of them would be Medicaid eligibility,” Glasker adds.
Seek Additional Support
If you find you’ve missed a deadline or otherwise find yourself in a Medicare circumstance that could be tricky to navigate, help is available. Medicare.gov contains all the information you need about the program and how to avoid penalties.
You can also contact your State Health Insurance Assistance Program (SHIP). These volunteer-staffed organizations provide free, unbiased information to Medicare beneficiaries and their families and caregivers. SHIP staff are highly trained and provide tailored advice for your individual situation.
Consulting a qualified agent or broker for Medicare questions is another option that Glasker recommends.
“This is especially the case for anyone looking for additional coverage after obtaining both Medicare Part A and Part B. Most Medicare agents and brokers should be able to give you an informative breakdown on Medicare Advantage, Medigap (Medicare supplement plans) and Medicare prescription drug coverage,” he explains.
And for anyone with questions about how Medicare coordinates with their employer-sponsored health insurance, Glasker recommends asking your HR department or respective benefits administrator.
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How to Avoid Paying a Medicare Late Enrollment Penalty originally appeared on usnews.com
