Many people feel caught off guard by Medicare late enrollment penalties. It’s crucial to know how to avoid them. Some people forget to enroll during their Initial Enrollment Period. Others delay enrollment because they assume they qualify for a Special Enrollment Period while working past age 65.

For many of these individuals, their “creditable coverage” ends. At that point, they no longer qualify for a Special Enrollment Period.

You can face late enrollment penalties for Medicare Part A, Part B, and Part D. That’s why it’s important to understand which parts of Medicare carry penalties.

Parts of Medicare with Late Enrollment Penalties

Medicare Part A, Part B, and Part D all have possible late enrollment penalties. If you miss your enrollment window and don’t qualify for a Special Enrollment Period, you must pay the penalty. The amount depends on the type of coverage you select and the date you signed up.

Medicare Part A Premium Penalty

• The Part A penalty is 10%.

• You’ll pay the penalty for twice the number of years you delayed enrollment.

• Most people don’t pay a Part A premium, so this penalty rarely applies.

Medicare Part B Premium Penalty

• The Part B penalty is 10% for each 12-month period you delayed enrollment.

• In most cases, you must pay the penalty every month for as long as you have Part B.

• If you’re under 65 and disabled, the penalty ends once you turn 65. At that time, you receive another Initial Enrollment Period.

Medicare Part D Premium Penalty

Medicare calculates the Part D penalty by multiplying 1% of the “national base beneficiary premium” by the number of uncovered months.

• The premium is $34.70 in 2024 and $36.78 in 2025.

• Medicare rounds the penalty to the nearest $0.10 and adds it to your monthly Part D premium.

• The national base beneficiary premium may change each year. As a result, your penalty may also change each year.

How to Avoid Penalties

Now that you know what penalties exist, here’s how to avoid them:

• Enroll during your Initial Enrollment Period.

• If you delay enrollment because of employer coverage, confirm that your coverage is “creditable” for both Medicare Part B and Part D.

• Enroll in Part D within the first two months of your Special Enrollment Period, if you qualify for one.

• If you have other creditable drug coverage, get written proof. You’ll need it to validate your Special Enrollment Period if you enroll later.

Still Unsure?

Although you can find information online about late Medicare enrollment, it can feel confusing. Every situation is different. The best step is to talk with a licensed health insurance agent who specializes in Medicare.

We are Independent Insurance Brokers appointed by many major insurance carriers. Our team helps clients find the policy that best fits their needs. Clients across Winchester, VA, Martinsburg, WV, and Charles Town, WV rely on our guidance.

Contact us today at (540) 662-4432 to schedule a free consultation with one of our agents. Or visit medicaretrustedagents.com for more information.