If you’ve heard that delaying Medicare can cost you—you’re right. But the rules around when to enroll and how to avoid penalties aren’t always clear.
In this post, we’ll walk you through the basics of Medicare’s late enrollment penalties, why they exist, and how to avoid them entirely. Because yes—some of these penalties last for the rest of your life.
What Is a Medicare Late Enrollment Penalty?
Medicare late enrollment penalties are added to your monthly premium if you delay enrolling in certain parts of Medicare without having what’s called “creditable coverage.” These penalties apply to:
- Part B (medical insurance)
- Part D (prescription drug coverage)
And unfortunately, they’re not one-time fees—they’re recurring and permanent.
The Part B Late Enrollment Penalty
Part B covers outpatient care, doctor visits, labs, and more. If you don’t sign up when you’re first eligible—and you don’t have creditable coverage—you’ll pay a penalty.
How much is it?
It’s 10% of the standard Part B premium for every 12-month period you delayed enrollment.
And it lasts?
For life. You’ll pay it as long as you have Part B.
How to avoid it:
Enroll during your Initial Enrollment Period (IEP), or—if you’re still working and have creditable coverage—enroll during your Special Enrollment Period (SEP) once that coverage ends.
The Part D Late Enrollment Penalty
Part D covers prescription drugs. Like Part B, delaying enrollment without creditable drug coverage leads to a monthly penalty.
How much is it?
1% of the “national base beneficiary premium” ($34.70 in 2024) for each full month you went without coverage.
Example:
If you went 12 months without creditable drug coverage, your penalty would be about $4.16/month—added to your premium for life.
How to avoid it:
Make sure you enroll in a Part D plan during your IEP or SEP, or prove that you had creditable drug coverage during that time.
What Counts as Creditable Coverage?
Creditable coverage is insurance that’s at least as good as Medicare’s. For Part B, this usually means:
- Employer coverage from a company with 20+ employees
- Union coverage
- FEHB (Federal Employee Health Benefits)
For Part D, creditable coverage includes:
- Employer or retiree drug plans
- VA drug coverage
- TRICARE
- Some COBRA drug coverage (but not always!)
The tricky part is that not all coverage qualifies, and sometimes even HR departments get it wrong. When in doubt, get it in writing—and verify it.
What Happens If You Miss a Deadline?
If you miss your Initial Enrollment Period and don’t have creditable coverage, you’ll have to wait until the General Enrollment Period (January 1 – March 31) to sign up for Part B, and your coverage won’t begin until July 1.
That gap in coverage could leave you vulnerable to unexpected bills—and of course, penalties.
Who’s Most at Risk?
- People who delay Medicare thinking they don’t need it yet
- Individuals who go on COBRA or retiree coverage thinking it “counts”
- Those who are on a spouse’s insurance and aren’t sure if it’s creditable
- Anyone who is self-employed or between jobs
How to Protect Yourself
- Don’t guess. The penalties are too serious to leave up to chance.
- Ask for confirmation in writing that your employer or retiree coverage is creditable.
- Know your timelines. Missing a 63-day window for Part D can lock in a penalty.
- Talk to someone who actually knows how this works. Not all agents—or HR reps—do.
Need Help Getting This Right?
At Brickhouse, we help people avoid costly Medicare penalties every day. Whether you’re planning ahead or already in the middle of a transition, we’ll walk you through your options based on your specific timeline and coverage.
Click here to schedule a free consultation with Niki or a member of our team. There’s no cost and no obligation to enroll.
—
Written by Niki Feret
Licensed Independent Medicare Insurance Agent
Founder, Brickhouse Agency & Chicagoland Medicare
As a female agency owner in a space that’s often dominated by call centers and cookie-cutter advice, I started Brickhouse to do things differently.
We’re a boutique Medicare agency—real people helping real people. No scripts, no pressure, and no one-size-fits-all recommendations. Just thoughtful, personalized guidance that helps you make confident Medicare decisions.
If you’re ready to feel supported—not sold—
Schedule a free consultation here. There’s no cost and no obligation to enroll. Ever.