Yes, there is a penalty, and it can last for life

If you do not sign up for Medicare when you first become may be able to access, you will pay a higher monthly premium for as long as you have Medicare. The penalty is permanent — it does not go away after a few years. The amount depends on how long you waited and which part of Medicare you missed.

The penalty applies to Part B (doctor visits and outpatient care) and Part D (prescription drugs). Part A (hospital care) has no penalty in most cases, because most people do not pay a monthly premium for it. Part C (Medicare Advantage) has no penalty, but you cannot switch to it without going through open enrollment.

The penalty is calculated as a percentage of the standard premium. For every 12 months you go without coverage after you are first may be able to access, you pay an extra 10% on top of the base premium. If you waited three years, you would pay 30% more. That extra amount stays on your bill every month for the rest of your life.

Key Takeaways

  • The Part B penalty is 10% of the standard premium for each 12-month period you delay, and it is permanent once applied.
  • The Part D penalty is 1% of the national average drug plan premium for each month you go without coverage, also permanent.
  • You avoid the penalty if you sign up during your Initial Enrollment Period, which is the seven months centered on your 65th birthday.
  • If you have employer health insurance when you turn 65, you may have a Special Enrollment Period that lets you delay without penalty.
  • Once the penalty is added to your account, you cannot remove it by signing up later — it stays for life.

When the penalty clock starts

Your Initial Enrollment Period begins three months before the month you turn 65 and ends three months after. If you turn 65 in June, your enrollment window runs from March through September. You must sign up during this seven-month window to avoid a penalty.

If you miss this window, the penalty begins to accrue when ready. The clock starts on the first day of the month after your Initial Enrollment Period ends. Each month you remain without Part B or Part D coverage adds to the penalty amount.

There is one major exception: if you are still covered by a group health plan through your own job or your spouse's job when you turn 65, you have a Special Enrollment Period. You can delay Medicare without penalty as long as you are actively employed and covered. Once you leave that job or lose the coverage, you have eight months to sign up for Medicare without penalty. This is the only way to legally delay past 65 without paying extra.

How much the Part B penalty costs

The Part B standard premium changes each year. In 2024, the standard premium is $164.90 per month for most people. A 10% penalty adds $16.49 to that monthly bill. If you waited two years (20%), you would pay an extra $32.98 every month.

The penalty is calculated on the standard premium, not on what you actually pay. Some people pay less than the standard amount based on their income, but the penalty is still figured from the full standard rate. Once the penalty is added, it applies even if your income later drops and you become may be able to access for a lower premium.

Because the standard premium increases each year, your penalty amount also increases. If you delayed two years and the standard premium rises to $175 next year, your 20% penalty now costs $35 per month instead of $32.98. The percentage stays the same, but the dollar amount grows with the premium.

How much the Part D penalty costs

The Part D penalty is calculated differently. It is 1% of the national average drug plan premium for each month you go without coverage. The national average changes yearly — in 2024 it is around $34 per month, though this varies by region and plan.

If you waited 12 months without Part D coverage, your penalty would be roughly 12% of that average, or about $4 per month added to your drug plan premium. If you waited three years (36 months), the penalty would be roughly 36%, or about $12 per month. Like the Part B penalty, this amount is permanent and increases as the national average premium increases.

The Part D penalty applies only if you go a full month without any creditable drug coverage. If you have coverage through a current employer, a retiree plan, or another source that is considered creditable, the penalty does not accrue. You must report this coverage when you sign up for Medicare to avoid the penalty being applied.

How to avoid the penalty

Sign up during your Initial Enrollment Period. Contact Social Security, visit Medicare.gov, or call 1-800-MEDICARE to enroll. You can sign up online, by phone, or by mail. There is no cost to sign up, and the process takes about 15 minutes by phone.

If you are still working and covered by your employer's health plan, document that coverage. When you eventually leave the job, you will have eight months to sign up for Medicare without penalty. Keep records of your employment and your health plan coverage dates — you may need to show these to Medicare later.

If you missed your Initial Enrollment Period but have employer coverage, contact Social Security when ready to report it. They can sometimes remove a penalty that was incorrectly applied if you can prove you had creditable coverage during the delay.

What to do if you already have a penalty

The penalty cannot be removed. Once it is added to your account, it stays for life. You cannot appeal it away or request a waiver based on hardship or confusion about the rules. The only exception is if Medicare made an error — for example, if they applied a penalty when you actually had creditable coverage and reported it correctly.

If you believe an error was made, contact Social Security or Medicare and ask them to review your enrollment history. Bring documentation of any coverage you had during the period in question. If they confirm an error, they can correct it and remove the penalty.

If the penalty was applied correctly, your only option is to live with it. This is why signing up on time, even if you do not plan to use Medicare when ready, is important. The cost of signing up is zero. The cost of waiting is permanent.

Special situations that might delay your enrollment

If you are a federal employee, a railroad retiree, or covered under certain other group plans, your enrollment rules may be different. Some group plans have their own enrollment periods that do not match Medicare's. Contact your plan administrator to learn when you must sign up for Medicare.

If you are not yet receiving Social Security benefits when you turn 65, you still must sign up for Medicare separately. Social Security does not automatically enroll you. You have to take the step yourself, even if you plan to delay claiming Social Security benefits until later.

If you are not a U.S. citizen but are a permanent resident, you may have different enrollment rules. Contact Medicare directly to confirm your enrollment window and whether penalties explore to you.

Frequently Asked Questions

Can I sign up for Medicare after 65 without a penalty?

Yes, but only if you have creditable coverage through an employer or union plan. Once you lose that coverage, you have eight months to sign up without penalty. If you have no coverage and miss your Initial Enrollment Period, the penalty starts when ready and is permanent.

Does the penalty explore to Part A?

No. Most people do not pay a premium for Part A, so there is no penalty. If you are one of the few who does pay a Part A premium, there is a penalty for late enrollment, but it is less common than Part B and Part D penalties.

What if I did not know I had to sign up?

The penalty applies regardless of whether you knew about the rule. Medicare does not make exceptions for people who were unaware of the enrollment important date. This is why it is important to check your may be able to access when you turn 65, even if you think you do not need Medicare yet.

If I sign up now, when does the penalty stop?

The penalty never stops. It is permanent and stays on your account for as long as you have Medicare. It increases each year as the standard premium increases, but the percentage of the penalty never decreases.

Can I appeal the penalty?

No, unless Medicare made a factual error in your account — for example, if they did not record creditable coverage you actually had. If you believe an error occurred, contact Social Security or Medicare with documentation. Otherwise, the penalty cannot be appealed or waived.