Medicare Late Enrollment Penalties: How They Work and How to Avoid Them

Medicare charges permanent late-enrollment penalties if you do not sign up for Part B or Part D when first eligible and lack qualifying coverage. The Part B penalty is 10% per year of delay and the Part D penalty is approximately 1% per month — both are added permanently to your premium and never expire.

Key Rules

  • The Part B penalty is 10% per full 12-month period you were eligible but not enrolled — this is permanent
  • The Part D penalty is approximately 1% per month without creditable drug coverage — also permanent
  • Qualifying employer coverage, TRICARE, and certain other plans can protect you from penalties during active enrollment
  • COBRA and retiree coverage do NOT protect you from Part B late-enrollment penalties