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Medicare late penalties, explained: how much and how to avoid them
Last checked October 5, 2026 against the official rules. Sources are listed at the end.
If you sign up late for Part B, you pay 10% more for each full year you went without it, for as long as you have Part B. If you go without drug coverage for more than 63 days, you pay 1% of a set national amount for each month, for life. Both are avoidable if you know your dates.
Part B: 10% for each full year
If you don't sign up for Part B when you're first able to, and you don't have coverage from a current job, your Part B price goes up 10% for each full 12 months you could have had it but didn't. You pay it every month for as long as you have Part B, and it grows when the price does.
Example. Someone's sign-up window ended September 30, 2022, and they signed up in March 2025. That's about two and a half years without Part B, which counts as two full years, so a 20% penalty.
In 2026 their Part B bill is $243.50 a month instead of $202.90: about $487 more a year, for as long as they have Part B.
There's a second cost. If you miss your windows, you can only sign up from January through March, and coverage starts the month after. That can mean months with no coverage at all.
Part D: 1% for each month
If you go more than 63 days in a row without Part D or other "creditable" drug coverage (at least as good as Medicare's), you'll pay a penalty when you do join. It's 1% of a national amount ($38.99 in 2026) for each full month without coverage, rounded to the nearest 10 cents, added to your drug plan's price for life.
Example. 14 months without drug coverage: 14% × $38.99 = $5.46, rounded to $5.50 a month. The national amount changes each year, so the penalty does too.
Who doesn't owe a penalty
- People who had health coverage from a job they or their spouse still had, at an employer with 20 or more employees, and signed up within 8 months after it ended.
- People who had creditable drug coverage, such as a job plan that said so in writing, with no gap longer than 63 days.
- People in a Medicare Savings Program (state help paying Medicare costs) don't pay the Part B penalty.
- People who qualify for Extra Help with drug costs don't pay the Part D penalty.
COBRA, retiree plans and plans you bought yourself don't count for Part B. See COBRA and Medicare.
If you think a penalty is wrong
You can ask for it to be looked at again. Write down the dates you had job coverage and get proof from the employer, such as Form CMS-L564. The letter about your penalty says how long you have to ask, usually 60 days.
Check whether you'd owe a penalty
Enter your birthday and sign-up dates to see if you'd owe a penalty, and what it would cost each month.
Sources
- Medicare.gov: Avoid late enrollment penalties
- CMS: 2026 Medicare Parts A and B premiums and deductibles
- CMS: 2026 Part D bid information (national base premium $38.99)
This guide explains the general rules. It isn't legal, tax or insurance advice, and your situation may differ. Settled Years doesn't sell insurance or take commissions.