Medicare charges a permanent premium surcharge if you sign up late for Part B or Part D without qualifying coverage in the meantime. The Part B penalty adds 10% to your monthly premium for every full 12 months you delayed, and it never expires. The Part D penalty adds 1% of the national base beneficiary premium for every month you went without creditable drug coverage. In 2026, the standard Part B premium is $202.90 a month, and the Part D national base beneficiary premium is $38.99. A person who waited seven years to enroll in Part B pays roughly $344.93 a month for that coverage instead of $202.90, permanently. Understanding how the math works, and which enrollment windows protect you from it, is the difference between a manageable Medicare bill and one that follows you for life.
The Three Medicare Late Enrollment Penalties
Medicare has separate penalties for Part A, Part B, and Part D. Most people never see a Part A penalty because Part A is premium-free for anyone with enough work history. The penalties that trip people up are Part B (medical insurance) and Part D (prescription drug coverage).
| Penalty | Who it applies to | How it's calculated | Does it end? |
|---|
| Part A | People who must buy Part A (fewer than 40 work credits) and delay enrollment | 10% added to premium, paid for twice the number of years you delayed | Yes, after twice the delay period |
| Part B | Anyone without qualifying employer coverage who delays Part B | 10% of the standard premium per full 12-month period delayed | No, lasts as long as you have Part B |
| Part D | Anyone who goes 63+ days without creditable drug coverage after their Initial Enrollment Period | 1% of the national base beneficiary premium per month uncovered | No, lasts as long as you have Part D coverage |
How the Part B Penalty Is Calculated
The Part B penalty is 10% of the current standard premium for every full 12-month period you were eligible for Part B but didn't enroll and didn't have creditable coverage through an employer.
The formula:
Penalty percentage = 10% x (number of full 12-month periods delayed)
That percentage is added to whatever the standard Part B premium is that year, so the dollar amount changes annually even though the percentage stays fixed once it's set.
2026 Part B Penalty Examples
The standard Part B premium for 2026 is $202.90 per month.
| Years delayed | Penalty percentage | Monthly penalty | Total monthly premium |
|---|
| 1 year | 10% | $20.29 | $223.19 |
| 2 years | 20% | $40.58 | $243.48 |
| 3 years | 30% | $60.87 | $263.77 |
| 5 years | 50% | $101.45 | $304.35 |
| 7 years | 70% | $142.03 | $344.93 |
| 10 years | 100% | $202.90 | $405.80 |
Because the penalty is a percentage rather than a fixed dollar figure, it grows every time the standard Part B premium increases. A 20% penalty locked in during one year costs more in dollar terms five years later, even though the percentage never changes.
How the Part D Penalty Is Calculated
The Part D penalty is calculated differently. Instead of counting full years, it counts full months without creditable prescription drug coverage.
Penalty = 1% of the national base beneficiary premium x number of full months uncovered
The national base beneficiary premium for 2026 is $38.99. The result is rounded to the nearest 10 cents and added to your monthly Part D plan premium, whatever that plan happens to cost.
2026 Part D Penalty Examples
| Months without coverage | Penalty percentage | Monthly penalty added |
|---|
| 12 months | 12% | approximately $4.70 |
| 24 months | 24% | approximately $9.40 |
| 36 months | 36% | approximately $14.00 |
| 60 months | 60% | approximately $23.40 |
Unlike Part B, the Part D penalty is based on the national base beneficiary premium, not your specific plan's premium. That national figure is recalculated each year, so the dollar penalty adjusts annually even if you never change plans. Q1Medicare has reported the 2026 base beneficiary premium reflects roughly a 6% increase from the prior year, which pushes penalty dollar amounts up for everyone already carrying one.
"Creditable coverage" means drug coverage that's expected to pay, on average, at least as much as Medicare's standard Part D plan. Coverage through a current employer, VA benefits, or TRICARE typically qualifies. If you're not sure your coverage counts, your plan administrator is required to send an annual notice confirming creditable status.
Why the Part A Penalty Rarely Applies
Most people qualify for premium-free Part A because they or a spouse paid Medicare payroll taxes for at least 40 quarters (10 years) of work. If you don't have that work history, you can still buy Part A, and if you delay buying it after becoming eligible, the penalty is 10% added to the premium, but only for twice the number of years you delayed. A two-year delay means paying the penalty for four years, then it stops. This is the only Medicare late enrollment penalty that has an end date.
Enrollment Periods That Protect You
The penalties only apply if you miss your enrollment window without a qualifying reason. Three windows matter most:
Initial Enrollment Period (IEP): A seven-month window centered on your 65th birthday, three months before, your birthday month, and three months after. Enrolling during this window avoids all late penalties.
Special Enrollment Period (SEP): If you're still working past 65 and covered by a group health plan through your own or a spouse's active employment at a company with 20 or more employees, you can delay Part B without penalty. Once that employment or coverage ends, you get 8 months to enroll in Part B penalty-free. COBRA and retiree coverage do not count as active employer coverage and do not extend this window, a common and costly mistake.
General Enrollment Period (GEP): If you miss both the IEP and any SEP, you can enroll during the General Enrollment Period, January 1 through March 31 each year, with coverage starting the following month. This is also when the penalty gets locked in for people who had no qualifying excuse to delay.
How to Avoid the Part D Penalty Specifically
The Part D penalty catches people who assume they don't need drug coverage because they don't take many prescriptions yet. Medicare doesn't see it that way. If you're eligible for Medicare and go 63 or more consecutive days without either a Part D plan or other creditable drug coverage, the penalty clock starts, regardless of how healthy you are. Enrolling in a low-premium Part D plan during your Initial Enrollment Period, even one you barely use, avoids the penalty entirely and can be changed later during Annual Enrollment (October 15 through December 7).
Who Is Exempt From Late Enrollment Penalties
A few groups are protected from these penalties even if they enroll later than the standard windows:
- People eligible for Extra Help (the Part D low-income subsidy) do not pay the Part D late enrollment penalty, even if they had a gap in coverage.
- People with Medicare Savings Programs or other Medicaid-linked assistance may have Part B premiums covered and penalties waived in certain circumstances.
- People who qualify for a Special Enrollment Period due to active employer coverage, certain disability situations, or specific hardship circumstances outlined by the Social Security Administration.
If you believe you were penalized incorrectly, you can request a review through the Social Security Administration, which handles Medicare enrollment and penalty determinations. Reviews typically require documentation showing you had creditable coverage or qualified for an SEP during the gap in question.
Frequently Asked Questions
Does the Medicare Part B penalty ever go away?
No. Once assessed, the Part B late enrollment penalty is permanent and is recalculated each year based on that year's standard premium. It does not decrease or expire the way the Part A penalty does.
How much is the Medicare Part D penalty in 2026?
The Part D penalty equals 1% of the 2026 national base beneficiary premium of $38.99 for every full month you went without creditable drug coverage, rounded to the nearest 10 cents, and added permanently to your monthly plan premium.
Can I avoid the Part B penalty if I keep working past 65?
Yes, if you have qualifying group health coverage through your own or a spouse's active employment at a company with 20 or more employees. You get an 8-month Special Enrollment Period to sign up for Part B penalty-free after that employment or coverage ends.
Does COBRA coverage protect me from the Part B penalty?
No. COBRA and retiree health coverage are not considered active employer coverage by Medicare. If you rely on COBRA past your Initial Enrollment Period, you can still face a late enrollment penalty.
Is the Part A penalty the same as the Part B penalty?
No. The Part A penalty only applies to people who must buy Part A because they lack sufficient work history, and it only lasts for twice the number of years the person delayed enrolling. The Part B penalty applies to nearly everyone who delays without qualifying coverage and lasts for life.
Can low-income Medicare beneficiaries get the penalty waived?
People who qualify for Extra Help (the Part D low-income subsidy) are exempt from the Part D late enrollment penalty. Some state Medicare Savings Programs can also help cover Part B premiums, which may reduce the financial impact of a Part B penalty, though the underlying penalty determination process is separate.
How do I check if I already have a late enrollment penalty?
Your Medicare premium notice or your Social Security benefit statement will show any penalty amount added to your Part B or Part D premium. You can also call Social Security or check your Medicare account online at Medicare.gov to see your current premium breakdown.
