Enroll at 65 to Avoid Medicare Late Penalties
Key Takeaways
- Medicare late enrollment penalties are applied to Part AMedicare Part A is hospital insurance, which covers the care you receive while admitted to a hospital, skilled nursing facility, or other inpatient facility. Medicare Part A is part of Original Medicare. , Part BMedicare Part B is medical insurance that covers Medicare-approved services — such as medically necessary treatment and preventive services — and certain other costs, like durable medical equipment. Medicare Part B is part of Original Medicare. and Part DMedicare Part D is prescription drug coverage for people enrolled in Medicare. Part D is optional and is offered by private insurance companies. .
- To avoid Part A and Part B penalties, you must sign up when you turn 65 if you don’t have health coverage from another source.
- The Part D penalty is applied when you go more than 63 days without prescription drug coverage after becoming eligible.
- The part B late enrollment penalty is a lifetime penalty that is paid as long as you’re on Medicare.
- The Part D late enrollment penalty is a lifetime penalty you’ll pay as long as you have a plan that covers your prescription drug costs.
- The longer you delay enrollment in Part A, the longer you’ll pay a late enrollment penalty.
- If you have other coverage, you may be able to delay enrollment without penalty.
Original Medicare consists of two parts: Part A (hospital coverage) and Part B (medical coverage). To get prescription drug coverage, most people must either add a Medicare Part D plan from a private insurance carrier or switch to a Medicare Advantage plan that includes Part D coverage.
To encourage enrollment in these programs, Medicare has instituted late enrollment penalties that are long-lasting and increase with time. There are cases, though, when you can delay enrollment without penalty.
Here’s a breakdown of Medicare’s late enrollment penalties and when you can avoid them.
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How Do Medicare Late Enrollment Penalties Work?
Medicare has late enrollment penalties in place for:
If you don’t enroll in Medicare in time and don’t have other coverage, you may accrue late enrollment penalties for each part.
Even worse, you’re not just hit with a one-time fee. Instead, Medicare’s late enrollment penalties increase over time and can last as long as you’re enrolled. The longer you wait to sign up, the costlier your penalties will be.
What Is the Medicare Part A Late Enrollment Penalty?
The rule: For every year you weren’t enrolled in Part A, you’ll pay a 10% penalty for two years.
If you worked 10 or more years, you probably won’t have a Part A premium to pay each month. If you qualify for no-cost Part A coverage and miss your enrollment, you won’t be charged a late enrollment penalty when you enroll.
However, if you worked between 7.5 and 10 years, you pay a $285 Part A monthly premium in 2025; those who worked less than 7.5 years pay $518 per month. These costs go up if you enroll late.
For example, if you worked for eight years and signed up for Part A three years late, the Part A Late Enrollment Penalty will be tacked onto your premium for six years. When the six years is over, your Part A premium will drop back to the regular amount.
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What Is the Medicare Part B Late Enrollment Penalty?
The rule: You’re assessed a 10% penalty for every year you didn’t sign up after becoming eligible. You’ll continue to pay this late enrollment penalty for as long as you have Part B.
Unlike Part A, all Medicare beneficiaries have a monthly premium payment for Part B coverage. The premium amount for Part B, which covers medical expenses, is income-based; individuals making $106,000 or less annually pay the standard premium payment of $185 in 2025. Those with the highest incomes may pay as much as $628.90 each month.
Remember, the Part B late enrollment penalty is a lifetime penalty. For example, if you delayed enrollment by three years, you’ll pay an extra 30% per month as long as you’re enrolled in Part B. Missing your Part B enrollment could mean you’re stuck paying hundreds or more, in enrollment penalties each year.
What Is the Medicare Part D Late Enrollment Penalty?
The rule: You’ll pay an extra 1% of the average Part D premium for each month you don’t enroll and don’t have creditable coverage.
Medicare Part D covers prescription drugs and has its own monthly premium. And like Part B, your Medicare Part D cost is partly based on your income. But Part D doesn’t have a standard charge. Instead, you’ll pay an Income-Related Monthly Adjustment Amount (IRMAA) if you make more than $106,000 per year. These range from $13.70 to $85.80 per month (in 2025).
Because there’s not a standard payment amount, the Medicare Part D penalty is calculated using a figure called the base beneficiary premium, which is determined based on the national average for Part D premiums. The 2025 base beneficiary premium is 36.78.
Medicare multiplies 1% of the national base beneficiary premium by the number of full months when you had no creditable coverage. That amount is rounded to the nearest $.10 and added to your monthly Part D premium.
I Have Health Insurance — Can I Delay Enrollment and Avoid a Penalty?
You can delay enrolling in Medicare and avoid late enrollment penalties if you have other creditable coverage.
Parts A and B
This usually includes active employment group coverage through your or your spouse’s job-based plan. Once that coverage ends, an eight-month special enrollment period begins. This allows you to enroll in Medicare Parts A, B and D without penalty.
Aside from job-based group plans, creditable coverage can also include Marketplace plans. While you’re encouraged to enroll in Medicare when you turn 65, a Marketplace plan may be cheaper if you haven’t yet worked long enough to qualify for premium-free Part A. If you decide to enroll in Medicare Parts A and B later, you won’t be penalized.
Part D
While you can delay enrolling in Medicare Prescription Drug Plan (Part D) if you have other coverage, your window to find new coverage before getting hit with a late penalty is much smaller. If you go 63 days without creditable drug coverage, your late enrollment clock starts ticking. Remember, you’ll accrue a 1% penalty for each month you don’t have coverage after those 63 days.
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Can I appeal my late enrollment penalty?
How do I know when my enrollment deadline is?
For example: if your birthday is June 15, your IEP begins March 1 and ends September 30.
When can I sign up if I missed my IEP?
- Medicare Annual Enrollment Period: October 15 to December 7; plans start January 1 the following year (also called the Annual Enrollment Period)
- General Enrollment Period: January 1 to March 31; plans start July 1.
Sources
- Enrolling in Medicare Part A & Part B. Medicare.gov.
- 3 ways to avoid the Part D late enrollment penalty. Medicare.gov.
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