How much is the late enrollment penalty for Medicare Part B?

For example, if you enroll in Part B 26 months late, you’ll have to pay a $32.98 late enrollment penalty every month in 2023, in addition to your $164.90 Part B premium. That’s 20 percent of $164.90 because the penalty is based on 12-month periods. Your monthly premium will be $197.90 in 2023 because the amount is rounded to the nearest 10 cents.

Since Part B premiums usually rise each year, your late enrollment penalty usually rises as well. In 2024, it’s based on the $174.70 monthly premium. The penalty lasts for as long as you have Medicare Part B, whether you have coverage through original Medicare or a Medicare Advantage plan. This is different from the Part A penalty, which lasts for a finite time.

If you should have signed up for Medicare at age 65, the penalty calculation is based on the time that elapsed between the end of your initial enrollment period and the end of the general enrollment period in which you finally sign up. If you delayed enrollment after age 65 because you were receiving health insurance through your or your spouse’s active employment, the penalty calculation is based on the time between the end of the employment — not the end of your special enrollment period eight months later — and the end of the general enrollment period when you finally sign up.

What are exceptions to the Part B late enrollment penalty?

You don’t have to pay a penalty if you sign up for Medicare Part B within eight months of losing your job-based coverage. Other exceptions:

• Less than a year without Part B. If you miss your enrollment deadline but sign up during the next general enrollment and fewer than 12 full months have lapsed, you will not pay a penalty. So if your initial enrollment period ends May 31, 10 months will have passed before the March 31 end of the general enrollment period.

• A reset of the penalty clock. If you’re younger than 65, have Medicare because of a disability and are paying Part B late penalties, you will no longer pay them after you turn 65. At that point, you become eligible for Medicare based on age instead of disability.

• Medicaid. If you’re enrolled in this federally financed but state-run health program for people with incomes below a certain amount, in addition to Medicare, your state pays your Part B premiums. Any late penalties are waived.

• Medicare Savings Programs. If you qualify for state assistance in paying Medicare costs under one of the MSPs, the state pays your Part B premiums and you’re not liable for late penalties.

• Living abroad. If you live outside the United States and its territories and are not entitled to premium-free Part A benefits, you cannot enroll in Part A or Part B abroad. Instead, you get a special enrollment period to sign up that begins during the month you return as a U.S. resident and lasts for up to two months afterward. If you enroll at that time, you’re not liable for Part A or Part B late penalties.

Medicare can establish special enrollment periods in other situations, such as allowing someone to enroll late because they were affected by a natural disaster.

Keep in mind

Only health insurance coverage from your own or your spouse’s current employer counts for a special enrollment period to avoid the late enrollment penalty. Having retiree health benefits or COBRA extended coverage from a former employer after age 65 will not exempt you from Part B late penalties if you don’t meet your enrollment deadline.

But if you have prescription drug coverage from these or other sources that’s considered to be at least as good as Medicare’s, that coverage may count as “creditable prescription drug coverage” to avoid the Part D late enrollment penalty.

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