Medicare Part B Late Enrollment Penalty


If you are newly eligible for Medicare and don’t enroll in Part B, you may have to pay the Part B late enrollment penalty. This penalty results in a higher premium every month. Unfortunately, it also lasts as long as you have Part B.

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What is the Penalty for Not Taking Medicare Part B?

The Part B penalty increases your monthly Part B premium by 10% for each full 12-month period you were eligible to enroll but didn’t. The penalty is based on the standard Part B premium, regardless of the premium amount you actually pay.

How to Calculate Your Medicare Late Enrollment Penalties

Here Are some examples of how the penalty works:
  • Suppose your IEP ended on November 30, but you waited and signed up on January 25, during the next General Enrollment Period. Because you didn’t let an entire 12-month period go by before the effective date of July 1, you will not pay the penalty.
  • If your IEP ended on December 30, 2013, but you did not sign up for Part B until March 31, 2017, you would be subject to a 30% penalty in addition to your premium each month. You waited 40 months, or three years and five months, to enroll, so this counts as three full 12-month periods.
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How Can I Avoid the Medicare Part B Penalty?

If you’re turning 65, you can enroll in Part B during your Initial Enrollment Period. Your IEP begins on the first day of the month, three months before your birth month. It then lasts through your birth month, and ends on the last day of the third months following. This means that if your 65th birthday is June 15, you can enroll between March 1 and September 30.

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Suppose you don’t enroll in Part B during your IEP. In that case, you usually must wait for the General Enrollment Period before you can sign up unless you’re eligible for a Special Enrollment Period. General Enrollment runs from January 1 to March 31 each year.

If you enroll at this time, your coverage will not start until July 1. Meaning, you may be without insurance if you have a sudden illness or injury. You can also apply for a Medicare Savings Program to avoid the Part B late enrollment penalty.

When Does the Part B Penalty Not Apply?

Those who miss the enrollment deadline but sign up during the next General Enrollment Period won’t pay the penalty if less than 12 months have passed. So, if the Initial Enrollment Period ends on Novmeber 30, only eight months will have passed before their Part B becomes effective on July 1.

Also, those under age 65 with Medicare due to disability who are paying a Part B late enrollment penalty won’t pay the penalty after turning 65. Further, those with Medicaid won’t worry about Part B premiums and penalties because their state will cover those costs.

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Finally, anyone living outside the United States who doesn’t receive premium-free Part A can’t enroll in Part A or Part B abroad. However, these people will get a Special Enrollment Period for three months after returning to the United States.

Enrolling during those three months means you’re not liable for late penalties. You may also be able to qualify for equitable relief if a federal employee told you that you didn’t need to sign up for Part B when you were supposed to enroll.

How Do I Appeal the Medicare Part B Penalty?

If you feel that the Part B penalty shouldn’t apply to your current situation, ask for a review. Medicare has reconsideration request forms to file an appeal. Unfortunately, you’ll still have to pay the penalty while waiting for your review to be processed.

Is There a Cap on the Medicare Part B Penalty?

As of now, there is no cap on the Part B late enrollment penalty. However, if passed, the Medicare Part B Fairness Act or H.R.1788 would cap the penalty amount at 15% of the current premium, regardless of how many 12-month periods the beneficiary goes without coverage. As of now, this bill is still under review, but this content will reflect future updates in the process.

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What if I Don’t Sign Up for Part B Because I Have Other Health Insurance?

If you have health insurance that is creditable for Medicare through your employer, your spouse’s employer, or a union, you can keep your coverage. You will not have to pay the penalty for waiting to sign up for Part B. However, if your coverage is not creditable, or if you lose your coverage (voluntarily or involuntarily) the clock begins to tick.

Usually, you will be allowed to sign up for Part B right away, during a Special Enrollment Period. This is an eight-month window beginning when the employment coverage ends. If you do not enroll during this period, you will have to pay a Part B penalty for each full 12 months you wait beyond the date the SEP began.

Take Bob’s case, for example. Bob continued working until he was 70, so he took Medicare Part A because it is premium-free and he assumed his group coverage through his employer would stand in for Medicare Part B until he retired.

However, he did not know that because his employer had fewer than 20 employees, his group coverage was not creditable for Medicare Part B. This resulted in Bob needing to pay the Medicare Part B penalty, adding 50% of the premium cost to his existing premium each month.

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Because the Medicare Part B penalty is 10% in addition to your premium for each 12-month period you delay coverage, Bob needs to pay 1.5 times the premium he would otherwise need to pay, throwing off his whole budget for retirement. Additionally, the penalty will last for as long as Bob has Medicare Part B coverage. Watch the video below for Bob’s whole story.

If you retire before age 65 and choose to extend your coverage using COBRA, you must end COBRA coverage once you are eligible for Medicare. COBRA is not creditable coverage to avoid the penalty if you delay Part B.

How to Avoid the Medicare Part B Late Enrollment Penalty

The best way to avoid Part B penalties is to plan ahead. You have several Medicare options from which to choose, including Medicare Advantage or a Medicare Supplement plan.

MedicareFAQ can help you through these decisions by answering your questions and helping you prepare for Medicare. Call the number above or fill out our online rate form to see all the options available in your area.

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Jagger Esch

Jagger Esch is the Medicare expert for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and MedicareFAQ.com. Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. He is featured in many publications as well as writes regularly for other expert columns regarding Medicare.

98 thoughts on “Medicare Part B Late Enrollment Penalty

  1. My husband has BCBS Federal Insurance and I am also on his medical Insurance. He retired at age 45 and is now 73, I am 72. We kept his government Insurance and never applied for Medicare part B. We plan to keep his Government Insurance but wanted to know what the penalty would be after 8 yrs if we enrolled in Medicare part B at this time.

    1. Hi Bonnie! If you turned 65 8 years ago, and you delayed signing up for Part B until now, your monthly premium would be 80% higher for as long as you have Medicare (8 years x 10%). However, you should not incur a penalty if you’ve had BCBS Federal Insurance. When he retired, you both were enrolled in Part A & Part B. That became your primary coverage, then BCBS became secondary.

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