Medicare late-enrollment penalties: Part B and D forever-fees

Last reviewed July 2026 · 5 min read

Medicare’s late-enrollment penalties are not late fees. They are permanent premium increases: sign up two years late and you pay extra every month, usually for the rest of your life. The rules differ for Part B and Part D, but both share the same shape — the penalty grows with every month you wait, and it is calculated as a percentage of a premium that itself rises most years, so the dollar amount keeps climbing forever.

Part B: 10% per year missed, for life

Miss your enrollment window for Part B and the premium goes up 10% for each full 12-month period you could have had it but didn’t. Medicare’s own 2026 example: wait two full years and you owe a 20% penalty on top of the standard premium — $202.90 plus $40.58, so $243.50 a month in 2026 instead of $202.90. The percentage never expires, and because it applies to each year’s current standard premium, the dollar penalty grows as premiums do. Someone who waited five years pays roughly 1.5× the standard premium every month, for life — on top of any IRMAA surcharge, which is a separate income-based add-on.

Part D: 1% per month, also for life

The drug-coverage penalty is finer-grained: 1% per month (12% per year) without Part D or other creditable drug coverage, once you’ve gone 63 days or more past your enrollment window. It’s charged as a percentage of the national base beneficiary premium — $38.99 in 2026 — not of your plan’s actual premium. Medicare’s 2026 example: 14 months without creditable coverage means a 14% penalty, about $5.50 a month added to whatever plan you pick, forever, even if you later switch plans. The base premium is reset each year, so this penalty also drifts upward over time.

Part A: the exception that proves the rule

Most people get Part A premium-free (10+ years of Medicare-taxed work, you or a spouse) and can never owe a Part A penalty. If you have to buy Part A, the penalty is 10% — but unlike B and D, it ends after twice the number of years you delayed: skip two years, pay the higher premium for four.

How people actually get caught

The windows are the trap. Your Initial Enrollment Period is 7 months around your 65th birthday (3 before, the birthday month, 3 after). Delaying is safe only if you have qualifying other coverage: a group health plan from current employment (yours or a spouse’s) for Part B, and creditable drug coverage for Part D. The classic mistakes: assuming COBRA or retiree coverage counts as current-employment coverage for Part B (it doesn’t — the 8-month Special Enrollment Period starts when work stops, even if COBRA continues); assuming a small employer’s plan protects you (under 20 employees, Medicare pays first and you generally need Part B at 65); and not realizing an employer drug plan wasn’t creditable. Each of those quietly starts the penalty meter.

Undoing it is hard

There is no “pay it back” option. Relief exists only at the edges: a Special Enrollment Period (employer coverage, moving, losing Medicaid, certain disasters), Medicare Savings Programs for Part B, and Extra Help for Part D — each wipes or prevents the penalty for those who qualify. Otherwise the reliable defense is boring: enroll on time, or keep written proof (Part D plans ask) that your other coverage was creditable.

Try it in Deorbit Plan

The simulator assumes on-time enrollment: from age 65 it charges each person Part B and Part D premiums, indexed with inflation, plus any IRMAA surcharge from your simulated MAGI two years back. Expand a row in the Year table to see the IRMAA line item, and use the Taxes & MAGI chart’s IRMAA reference lines to see which surcharge tier your income path buys. If you model retiring before 65, the Household panel and ACA-years pricing show the pre-Medicare bridge — the years when mishandling the handoff to Medicare creates exactly the penalties described above.

Educational content only — not financial, tax, or investment advice.

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