Medicare Late Enrollment Penalty: How Part B, Part D and Part A Penalties Are Calculated

$243.50 instead of $202.90. That's the monthly Part B premium Medicare.gov uses in its own 2026 example for someone who waited two full years to sign up without a Special Enrollment Period. The extra 20% is not a one-time fine. It's added to the premium every month, and for most people it stays for as long as they have Part B.

Medicare has three late enrollment penalties: one for Part B, one for Part D drug coverage and one for Part A (if you have to buy it). Each uses different math. Open Enrollment starts tomorrow, October 15, and runs through December 7. Open Enrollment is one of the times you can join a Part D plan, and if you've gone without creditable drug coverage, that's when the Part D penalty shows up. Here is how each penalty is calculated, with worked numbers, and what you can do to avoid it or challenge it.

Source: Medicare.gov, Avoid late enrollment penalties; CMS, Part D 2027 national average monthly bid amount fact sheet; MedPAC, June 2019 Report to the Congress, ch. 1; CMS, Medicare Monthly Enrollment.

The three penalties side by side

The short version: Part B and Part D penalties are usually permanent. The Part A penalty ends. All three are avoidable if you sign up on time or have the right kind of other coverage.

Source: Medicare.gov, Avoid late enrollment penalties; CMS, Medicare & You 2027, pp. 23 and 87-89; SSA POMS HI 00805.170.

Part B: 10% for each full 12 months

The rule is in 42 CFR 408.22: the standard monthly premium goes up 10% for each full twelve months you could have had Part B but didn't. The word "full" does a lot of work. Eleven months late adds nothing. Twelve months adds 10%. Twenty-three months is still 10%. Twenty-four months jumps to 20%.

Medicare.gov's own example for 2026: someone who waited two full years without a Special Enrollment Period pays a 20% penalty. That's $202.90 plus $40.58, or $243.48, which Medicare rounds to the nearest 10 cents: $243.50 a month.

$0.00$100.00$200.00$300.00

$202.90

$223.20

$243.50

$263.80

No penalty10%20%30%

Source: Maru Insurance calculation from the CMS, 2026 Medicare Parts A & B premiums and deductibles fact sheet and the formula at Medicare.gov, Avoid late enrollment penalties.

Show the numbers

	Monthly Part B premium
No penalty	$202.90
10%	$223.20
20%	$243.50
30%	$263.80

Here's how months turn into a percentage. The counting window under 42 CFR 408.24 runs from the close of your Initial Enrollment Period to the close of the month you finally sign up. Months when you had group health coverage from current employment (and you signed up within that Special Enrollment Period) don't count.

Source: Maru Insurance calculation from 42 CFR 408.22, the CMS, 2026 Medicare Parts A & B premiums and deductibles fact sheet and Medicare.gov, Avoid late enrollment penalties. Totals rounded to the nearest $0.10.

The 27-month row is the one people trip on. The Medicare & You 2027 handbook uses it: Mr. Smith's Initial Enrollment Period ended in December 2021, and he signed up during the General Enrollment Period in March 2024. That's 27 months without Part B, but only two full 12-month periods, so his penalty is 20%, not 27% and not 30%. He pays it for as long as he has Part B.

In dollars, a 20% penalty at the 2026 premium is $40.58 a month, roughly $487 a year, every year. And because the penalty is a percentage of each year's standard premium, the dollar amount grows when the premium does. CMS hasn't announced the 2027 Part B premium yet; last year's announcement came in mid-November. One more layer: if your income is above certain limits ($109,000 individual or $218,000 joint, based on 2024 income, for 2026), you pay an income-related amount on top.

How common is this? MedPAC, the commission that advises Congress on Medicare, found that about 800,000 people, or 1.5% of Part B enrollees, paid the Part B penalty in 2016. About 40% of them paid 10%. About 5% paid a penalty as large as or larger than the base premium itself, which means they went at least a decade without Part B after 65. MedPAC estimated that up to about 20% of the people paying may not have known about the penalty when they turned 65.

Part D: 1% a month, recalculated every year

The Part D penalty kicks in if, after your Initial Enrollment Period ends, you go 63 days or more in a row without Part D or other creditable prescription drug coverage (42 CFR 423.46). "Creditable" means coverage expected to pay, on average, at least as much as Medicare drug coverage. Your employer, union or other plan has to tell you each year whether yours is.

The formula: 1% of the national base beneficiary premium, times the number of full months you went without coverage, rounded to the nearest 10 cents. It's added to whatever premium your plan charges. After you join, your plan tells you whether you owe it.

The base beneficiary premium is a number CMS sets each summer by statutory formula. It is not what any plan charges; it's the starting point for the penalty math. Between 2024 and 2029, the law caps its annual increase at 6%, and it has gone up by that full 6% two years running.

$0.00$20.00$40.00$60.00

$36.78

$38.99

$41.33

202520262027

Source: CMS, Medicare & You 2027 (2025 figure, p. 88); CMS, 2026 Part D bid information fact sheet; CMS, Part D 2027 national average monthly bid amount fact sheet.

Show the numbers

	Base beneficiary premium
2025	$36.78
2026	$38.99
2027	$41.33

Medicare.gov's 2026 example: someone who waited 14 months with no creditable coverage owes 14%. That's $38.99 × 0.14 = $5.46, rounded to $5.50 a month. Here's the same math at other lengths of time, for each of the last three years.

Source: Maru Insurance calculation from CMS, Medicare & You 2027 (formula, p. 88), CMS, 2026 Part D bid information fact sheet and CMS, Part D 2027 national average monthly bid amount fact sheet. Rounded to the nearest $0.10. Added on top of the plan's own premium.

Notice what happens across each row. Your number of uncovered months is fixed once you join, but the base premium is reset every year, so the dollar penalty usually creeps up. The handbook's example, Mrs. Martinez, went 29 months without creditable drug coverage (August 2022 through December 2024). Her penalty was $10.70 a month in 2025 and $11.30 in 2026. Running the same 29% against the 2027 base premium of $41.33 gives $12.00 a month next year.

Now the Open Enrollment angle. Say you've had no drug coverage since your Initial Enrollment Period ended and you join a plan between October 15 and December 7 for coverage starting January 1, 2027. Every full month without coverage until then counts, and the penalty will be figured on the 2027 base premium. Someone with 24 uncovered months would owe $9.90 a month, about $119 a year at 2027 rates, on top of the plan premium. Waiting longer only adds 1% a month.

There is one clean exit. If you get Extra Help (the federal program that helps pay Part D costs for people with limited income and resources), you don't pay a Part D late enrollment penalty. If your income is tight, apply. For the bigger 2027 changes to the drug benefit itself, see what changes in Part D for 2027.

Part A: 10% for twice the years you missed

Most people don't pay a Part A premium because they or a spouse worked long enough. This penalty only applies if you have to buy Part A. In 2026 that costs $565 a month with fewer than 30 quarters of work credits, or $311 with 30 to 39 quarters.

If you have to buy it and don't sign up when you're first eligible, the premium may go up 10%. Unlike Parts B and D, the penalty ends: you pay it for twice the number of years you didn't sign up. Medicare's example is two years late, four years of the higher premium.

Worked out at the 2026 full rate: $565 plus $56.50 is $621.50 a month. Two years late means 48 months of that extra $56.50, or $2,712 total at 2026 rates. At the reduced $311 premium, the 10% is $31.10 a month. As with Part B, you usually don't owe it if you sign up during a Special Enrollment Period.

How to avoid the penalties

Most penalties start with one sentence: "I have other insurance, so I don't need Medicare yet." Sometimes that's true. The test is different for Part B and Part D.

For Part B, the coverage has to come from current employment. If you or your spouse are still working and you have a group health plan through that job, you can delay Part B. When the job or the coverage ends (whichever comes first), you get a Special Enrollment Period of 8 months. Per 42 CFR 406.24, it ends on the last day of the eighth consecutive month without that coverage.

What doesn't count: COBRA, retiree coverage and VA coverage. Medicare.gov says plainly that COBRA isn't group health plan coverage and doesn't change when the SEP ends, and that COBRA or retiree coverage ending does not give you a Part B SEP. Marketplace coverage doesn't either. People assume COBRA "continues" their job coverage. For Part B, it doesn't.

Source: Maru Insurance example applying 42 CFR 406.24(b)(2), Medicare.gov, When does Medicare coverage start? and Medicare.gov, Special Enrollment Periods. COBRA in this period does not extend the Part B SEP.

Even inside the 8 months, don't sit on it. The Part B SEP and the Part D clock are separate, and the Part D one is much shorter. If your job coverage included drug coverage that was creditable, line up Part D (or a Medicare Advantage plan with drug coverage) before you run past 63 days. The Part D SEP after leaving employer or union coverage lasts 2 full months after the month the coverage ends.

The paperwork for the Part B SEP is two forms. Form CMS-40B is the Part B application if you already have Part A. Form CMS-L564, "Request for Employment Information," is proof of your job-based coverage: you fill out Section A, and your employer fills out Section B with the coverage and employment dates. Both go to your local Social Security office by mail or fax. Social Security's number is 1-800-772-1213 (TTY 1-800-325-0778). Get the employer's half done before you leave, while HR still answers your emails.

For Part D, the test is "creditable," not "current employment." Your current or former employer or union, TRICARE, the Indian Health Service or the VA can all count, if the coverage is creditable. COBRA is different here too: if your COBRA includes creditable drug coverage, Medicare & You says you get a Special Enrollment Period to join Part D without a penalty when the COBRA ends. Keep the yearly creditable coverage notices. You'll need them if a plan ever asks, or if you have to challenge a penalty.

If you already missed the window, the General Enrollment Period runs January 1 to March 31 each year. Since 2023, coverage starts the first day of the month after you sign up (42 CFR 407.25); before 2023 it didn't start until July 1. You may owe a penalty, but signing up in January rather than March stops the clock sooner. Medicare also has Special Enrollment Periods for exceptional conditions, such as missing enrollment because of a declared disaster or emergency or after losing Medicaid. The disaster rule matters in Florida; I covered it in Medicare Special Enrollment Periods in Florida.

Two more exemptions from the Part B penalty: you generally don't owe it if you qualify for a Special Enrollment Period, or if you enroll in a Medicare Savings Program, the programs available through your state that help people with limited income and resources pay Medicare costs such as the Part B premium.

How to challenge a penalty

Part D: reconsideration, within 60 days. When a plan says you owe a penalty, it sends a letter with a reconsideration request form. If you disagree, send that form back no later than 60 days from the date on the letter, with proof. An independent review entity that works for Medicare decides it, not your plan. Use the form, mailing address and fax number that came with your letter rather than one you find online; contractors and addresses change. CMS's reconsideration form lists the usual grounds:

• You had creditable drug coverage (attach the creditable coverage notice, a VA card or letter, or Indian Health Service documents).
• You had coverage but never got a notice clearly saying whether it was creditable. Under 42 CFR 423.56(g), if you show you weren't adequately told that coverage wasn't creditable, it can be treated as creditable for penalty purposes.
• You weren't eligible for Part D during the period, for example because you lived outside the U.S.
• A serious medical emergency kept you from enrolling on time.
• You had Extra Help.

Send copies, not originals. If you're past 60 days, the form asks you to explain the delay on a separate sheet. The reconsideration decision itself isn't appealable, though CMS can review and revise it at its discretion.

Part B: ask Social Security to reconsider. Social Security makes the decision on a Part B premium penalty and handles reconsiderations of it (42 CFR 405.924). If you think the penalty is wrong, for example because months with job-based coverage were counted, use the appeal instructions on your Social Security notice.

Part B: equitable relief, for government error. Separately, there's "equitable relief": if a federal employee or agent gave you wrong information or failed to act (say, a Social Security employee told you that you didn't need Part B yet), Social Security and CMS can set a new enrollment period and adjust the penalty. You need evidence of the error and that it harmed your enrollment rights. There's no time limit to ask. It applies to Part B and premium Part A, not premium-free Part A. Write down names, dates and what you were told every time you call.

What this means in Florida

Florida had 5,334,437 people on Medicare in June 2026, per CMS. Census estimates put the state's 65-and-older population at 5,346,788 in mid-2025, or 22.8% of residents, against 18.9% nationally. Only California has more people 65 and older.

A move to Florida doesn't change any of this; the penalty rules are federal. Moving out of a plan's service area gives you a window to change Medicare Advantage or Part D plans, but moving isn't on Medicare.gov's list of reasons for a Part B Special Enrollment Period. If you're splitting the year between states, read Medicare rules for Florida snowbirds before Open Enrollment closes.

What I'd do this month, if any of this sounds like you:

• If you're 65 or older with no drug coverage, look at joining Part D during Open Enrollment (October 15 to December 7). The penalty only grows while you wait.
• If you're still on job-based coverage, ask HR in writing whether your drug coverage is creditable, and get the CMS-L564 filled out before your last day.
• If you're on COBRA or retiree coverage and never signed up for Part B, call Social Security now about the General Enrollment Period starting January 1.
• If you got a Part D penalty letter, mark 60 days from the date on it.

For free, unbiased one-on-one help, call SHINE, Florida's State Health Insurance Assistance Program run by the Department of Elder Affairs: 1-800-96-ELDER (1-800-963-5337), TTY 1-800-955-8770. Medicare itself is at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048. For more on Medicare choices here, see Medicare in Florida and Medicare Part D in Florida.

Your own Medicare notices, plan documents and federal rules control your situation. Confirm the details with a licensed agent, SHINE, Social Security or 1-800-MEDICARE before you act, and talk to an attorney for legal questions.

Sources

1. Medicare.gov: Avoid late enrollment penalties (accessed Oct 14, 2026)
2. CMS: Medicare & You 2027 handbook
3. CMS: 2026 Medicare Parts A & B Premiums and Deductibles fact sheet (Nov 14, 2025)
4. CMS: 2026 Medicare Part D Bid Information and Part D Premium Stabilization Demonstration Parameters (Jul 28, 2025)
5. CMS: Medicare Part D 2027 National Average Monthly Bid Amount Information (Jul 28, 2026)
6. Medicare.gov: When does Medicare coverage start?
7. Medicare.gov: Special Enrollment Periods
8. CMS: Form CMS-L564, Request for Employment Information
9. CMS: Form CMS-40B, Application for Enrollment in Medicare Part B
10. CMS: Part D Late Enrollment Penalty Reconsideration Request Form
11. Social Security POMS HI 00805.170: Equitable relief
12. eCFR: 42 CFR 408.22, Part B premium increase for late enrollment
13. eCFR: 42 CFR 408.24, Individual enrolled or reenrolled after IEP
14. eCFR: 42 CFR 405.924, Actions that are initial determinations
15. eCFR: 42 CFR 406.24, Special enrollment period related to coverage under group health plans
16. eCFR: 42 CFR 407.25, General enrollment period
17. eCFR: 42 CFR 423.46, Part D late enrollment penalty
18. eCFR: 42 CFR 423.56, Procedures to determine and document creditable status
19. eCFR: 42 CFR 423.286, Rules regarding premiums
20. MedPAC: June 2019 Report to the Congress, chapter 1
21. CMS: Medicare Monthly Enrollment (Florida, June 2026)
22. U.S. Census Bureau: Vintage 2025 state population estimates by age
23. Florida SHINE program