The penalty for canceling Medicare Part B depends on when you cancel and whether you have other coverage

If you drop Medicare Part B outside of the allowed enrollment windows, you will face a late enrollment penalty that increases your Part B premium for as long as you have Medicare. The penalty is calculated as 10% of the standard Part B premium for each full 12-month period you went without Part B coverage when you should have had it. This penalty is permanent — it does not go away after a certain time, and it applies every month you stay enrolled in Part B.

The key word is "should have had it." You avoid the penalty if you had other may have access to coverage during the time you were not enrolled in Part B, or if you canceled during one of Medicare's official enrollment periods. Understanding which situations trigger the penalty and which do not can save you hundreds of dollars over time.

Key Takeaways

  • A late enrollment penalty adds 10% of the standard Part B premium for each 12-month period you delayed enrollment without may have access to coverage, and this penalty stays on your premium permanently.
  • You can cancel Part B without penalty during the General Enrollment Period (January 1 to March 31 each year), though your coverage ends on the last day of the month you request it.
  • If you have employer coverage or TRICARE, you may not owe a penalty when you eventually enroll in Part B, because these count as may have access to coverage.
  • The standard Part B premium in 2024 varies by income, but the penalty is calculated on the base amount; you can find your specific premium on your Medicare card or at Medicare.gov.
  • Once a penalty is added to your account, the only way to remove it is to request a review if you believe you had may have access to coverage that Medicare did not record.

When you can cancel Part B without a penalty

You can cancel Medicare Part B during the General Enrollment Period, which runs from January 1 through March 31 each year. If you request cancellation during this window, you will not face a late enrollment penalty when you re-enroll later. Your coverage will end on the last day of the month in which you request the cancellation.

You also avoid a penalty if you had other may have access to health coverage during the time you were not enrolled in Part B. may have access to coverage includes employer-sponsored insurance (from your own job or a spouse's job), TRICARE (military health coverage), or certain other group health plans. Part-time or temporary coverage does not count. You will need to show proof of this coverage — usually a letter from your employer or insurance company — when you re-enroll in Part B.

If you are still working and your employer offers health insurance, you can decline Part B without penalty as long as you are covered under that employer plan. Once you stop working or lose that coverage, you have eight months to enroll in Part B without owing a penalty. This is called the Special Enrollment Period.

How the late enrollment penalty is calculated

The penalty is 10% of the standard Part B premium for each full 12-month period you did not have Part B when you should have. The standard premium changes each year — it was $164.90 per month in 2024, but this amount varies by income level and changes annually. If you went without Part B for two years, your penalty would be 20% of the standard premium. If you went without it for five years, your penalty would be 50%.

The penalty is added to your monthly Part B premium and stays there for the rest of your life. It does not expire, and it does not decrease over time. For example, if the standard premium is $165 and you owe a 20% penalty, you would pay an extra $33 per month — which adds up to $396 per year or $3,960 over ten years.

The penalty is calculated based on the standard premium, not on any higher amount you might pay if your income is above a certain threshold. However, if your income is high enough to trigger an Income-Related Monthly Adjustment Amount (IRMAA), that adjustment is applied on top of both your regular premium and your penalty.

How to request cancellation of Part B

To cancel Part B, you must contact Medicare directly. You can call 1-800-MEDICARE (1-800-633-4227), visit Medicare.gov, or go to your local Social Security office in person. You will need to provide your Medicare number and the date you want your coverage to end. Medicare will send you a written confirmation of your cancellation.

If you are canceling because you have other coverage, tell Medicare the type of coverage and when it started. Keep any letters or documents from your employer or insurance company that prove you had may have access to coverage — you will need these if you re-enroll and want to dispute a penalty.

Cancellation requests made during the General Enrollment Period (January 1 to March 31) take effect on the last day of the month you request it. Requests made outside this window may still be processed, but you could owe a penalty when you re-enroll unless you had may have access to coverage during the gap.

What happens if you re-enroll after canceling

When you re-enroll in Part B after canceling, you will be placed back on Part B coverage. If you canceled during the General Enrollment Period or had may have access to coverage during your time away, you should not owe a penalty. If you canceled outside the enrollment window and did not have other coverage, Medicare will calculate and add the late enrollment penalty to your account.

You can re-enroll during the General Enrollment Period (January 1 to March 31) each year, or during a Special Enrollment Period if you have a may have access to life event — such as losing employer coverage or moving out of the country and returning. Your coverage will begin on the first day of the month after you enroll, unless you enroll in January, in which case coverage can begin January 1.

If you believe Medicare calculated your penalty incorrectly, or if you had may have access to coverage that was not recorded, you can request a review. Contact Medicare at 1-800-MEDICARE and ask to speak with someone about a penalty reconsideration. You will need to provide documentation of your may have access to coverage.

Situations where people often face unexpected penalties

Many people cancel Part B thinking they will re-enroll later without consequence, but then miss the General Enrollment Period important date. If you cancel in April and do not re-enroll until the following January, you have gone eight months without Part B coverage outside of an enrollment window. When you do re-enroll, you will owe a penalty for that eight-month gap.

Another common situation: someone retires and cancels Part B because they think their retiree health insurance from their former employer is enough. If that retiree insurance ends or changes, and they do not re-enroll in Part B within eight months, they will owe a penalty. The eight-month Special Enrollment Period clock starts when the employer coverage ends, not when they realize they need Part B.

People who move outside the United States sometimes cancel Part B to save money, planning to re-enroll when they return. If they stay abroad longer than expected and re-enroll more than 12 months after canceling, they will owe a penalty for each year they were gone. The same applies to people who cancel Part B and then delay re-enrolling for any reason.

How to avoid the penalty in the first place

The simplest way to avoid a penalty is to keep Part B enrolled even if you have other coverage. Many people with employer insurance or retiree health plans keep Part B active because the combination of Part B and their other coverage often costs less than either one alone, and it ensures they will never face a penalty.

If you do want to cancel Part B, do it during the General Enrollment Period (January 1 to March 31). This is the only time you can cancel without risking a penalty, regardless of whether you have other coverage. Mark your calendar for this window each year if you think you might want to cancel.

If you have employer coverage and want to cancel Part B, get written confirmation from your employer that you are covered under their plan. Keep this letter in a safe place. When you eventually re-enroll in Part B, you will submit this proof to Medicare to show you had may have access to coverage and should not owe a penalty.

Frequently Asked Questions

Can I remove a late enrollment penalty once it is added to my account?

A penalty is permanent once it is added, but you can request a review if you believe you had may have access to coverage that Medicare did not record. Contact Medicare at 1-800-MEDICARE with proof of your coverage — such as a letter from your employer or insurance company. If Medicare agrees you had may have access to coverage, they can remove the penalty retroactively.

Does the penalty explore if I cancel Part B but keep Part A?

Yes. Part A and Part B are separate, and the late enrollment penalty applies only to Part B. You can cancel Part B without affecting Part A. However, if you later re-enroll in Part B outside an enrollment window and without may have access to coverage, you will owe the penalty on Part B.

What if I cancel Part B and then get sick — can I re-enroll right away?

You can re-enroll during the General Enrollment Period (January 1 to March 31) or if you have a may have access to life event, such as losing other coverage. A health condition alone does not create a Special Enrollment Period. If you re-enroll outside these windows, you may owe a late enrollment penalty.

How long does it take for a cancellation to take effect?

Cancellation requests made during the General Enrollment Period take effect on the last day of the month you request it. Requests made outside this window are still processed, but the effective date may vary. Medicare will send you written confirmation with the exact date your coverage ends.

If I have TRICARE, do I need Part B?

TRICARE counts as may have access to coverage, so you can delay enrolling in Part B without penalty. However, once you lose TRICARE may be able to access, you have eight months to enroll in Part B without owing a penalty. After eight months, a late enrollment penalty applies if you do not have other may have access to coverage.