What Is the Late Enrollment Penalty (LEP) in Medicare?

The Medicare late enrollment penalty is a surcharge added to your monthly Medicare premium when you don’t sign up during your first eligible window. For Part B, the most common version, you pay an extra 10% on top of the standard premium for every full 12-month period you were eligible but not enrolled, and the surcharge lasts for as long as you have coverage.¹ Part D works on a similar idea with different math, and Part A carries a penalty only for the small share of people who have to buy it.

The Part B Penalty

This is the penalty that hits the hardest, because it’s permanent. You pay an extra 10% on your Part B premium for every full 12-month period you were eligible but didn’t sign up.¹ The standard Part B premium in 2026 is $202.90 per month.²

Say you were eligible at 65 but didn’t enroll until 67. That’s a two-year gap, so the penalty is 20%. On the 2026 premium, that’s roughly an extra $40.58 per month added to your $202.90 bill, every month, for as long as you have Part B. The base premium goes up most years, and the penalty percentage rides on top of whatever the current premium happens to be. Your surcharge grows in dollar terms over time even though the percentage stays fixed.¹

“Permanent” means what it sounds like. You’ll pay the surcharge for the rest of the time you have Part B, which for most people is the rest of their life.¹

The Part D Penalty

The Part D drug penalty kicks in if you go 63 or more consecutive days without Medicare drug coverage or other creditable prescription drug coverage after your Initial Enrollment Period ends.³ Creditable coverage means the other plan pays at least as much as Medicare’s standard drug benefit. Your former employer or plan has to tell you every year whether your coverage qualifies.

The math is different from Part B. You take 1% of the “national base beneficiary premium” and multiply it by the number of full months you went without coverage. In 2026, that base is $38.99. So 14 months without creditable coverage produces a penalty of 14% of $38.99, which is $5.46, rounded up to $5.50 per month.¹ That amount is added to whatever your Part D plan charges as its own monthly premium.

Because the national base beneficiary premium changes each year, your dollar penalty recalculates annually even though the number of uncovered months doesn’t change. Like Part B, the Part D penalty is effectively permanent. It follows you for as long as you have Medicare drug coverage, even if you switch plans.⁴

One exception matters. If you qualify for Extra Help, Medicare’s Low-Income Subsidy, you aren’t charged the Part D penalty at all.⁵ And if you later lose Extra Help, Medicare won’t count months from before you qualified when calculating a future penalty.

The Part A Penalty

Most people don’t pay a Part A premium at all, because they or a spouse paid Medicare taxes for at least 40 quarters during their working years.⁶ If that’s you, there’s no Part A penalty because there’s no premium to raise.

The Part A penalty only reaches people who have to buy the coverage. In 2026, that’s $311 per month with 30–39 quarters of work history, or $565 per month with fewer than 30 quarters.² If you delay, the premium goes up by 10%. Unlike the other Medicare penalties, this one isn’t for life. It lasts twice the number of years you could have enrolled but didn’t. Delay three years and you’ll pay the higher premium for six.¹

Traps That Create the Penalty by Accident

Plenty of people end up with a penalty not because they ignored Medicare but because they misread one specific rule.

COBRA Doesn’t Count as Employer Coverage

This is the one that catches the most people. If you retire at 65 and elect COBRA continuation coverage, that COBRA plan does not count as employer group coverage for Medicare enrollment purposes. Your eight-month Special Enrollment Period runs from the date you stopped working or lost your employer group coverage, not from the date COBRA runs out.⁷ Ride out 18 months of COBRA thinking you’ll sign up afterward and you’ve already blown past your penalty-free window by about a year.

It gets worse. If you have COBRA and are eligible for Medicare but not enrolled, COBRA may only pay a small portion of your health care costs, leaving you responsible for most of the bill.⁷ You can end up paying COBRA premiums, getting minimal coverage from them, and running up a lifetime Part B penalty at the same time.

Small-Employer Coverage Doesn’t Delay Part B Safely

The Special Enrollment Period that lets you delay Part B without penalty depends on group health coverage through an employer with 20 or more employees. If your employer has fewer than 20 workers, Medicare is generally the primary payer whether or not you have the employer plan.⁸ Delaying Part B in that situation leaves you with weak coverage and a late enrollment penalty. If you work for a small company, sign up during your Initial Enrollment Period even if your employer offers insurance.

Retiree, VA, and Marketplace Plans Don’t Protect You Either

Retiree health coverage, VA coverage, and individual marketplace plans do not qualify you for a Special Enrollment Period.⁹ Only group health coverage based on current active employment counts. If any of those other plans are your only insurance at 65, you still need to enroll in Medicare on time.

How to Avoid the Penalty

The simplest path is to enroll during your Initial Enrollment Period, the seven-month window that starts three months before the month you turn 65 and ends three months after it.¹⁰

If you’re still working at 65 and covered by a group health plan through an employer with 20 or more employees, you can safely delay. Once that employment or coverage ends, you have eight months to sign up for Part B penalty-free through a Special Enrollment Period.⁹ Don’t wait until the end of that window; coverage gaps inside the SEP can leave you weeks without insurance.

For Part D, keep continuous creditable drug coverage. If your coverage changes or ends, you have 63 days to enroll in a Part D plan before the penalty clock starts.³ Save every notice your employer or plan sends you about whether your drug coverage is creditable. Those letters are your evidence if you ever need to prove you were continuously covered.

Appealing a Penalty You Think Is Wrong

If you believe your penalty was applied incorrectly, you can appeal. The route depends on which part of Medicare assessed it.

Part B

Part B penalty appeals go through the Social Security Administration. Follow the directions on the letter notifying you of the penalty, or use SSA’s standard request for reconsideration form. You have 60 days from the date you received the notice to file. If you miss that deadline, you can submit a letter explaining why, though approval isn’t guaranteed. Common grounds for a successful appeal include proof that you had employer-based coverage during the period in question, or that you were actually enrolled in Part B when Medicare’s records show a gap. Keep paying the penalty while your appeal is reviewed. If you win, you’ll be refunded.

Part D

For Part D, submit the Part D LEP Reconsideration Request Form C2C to the Independent Review Entity. The form must be completed, signed, and mailed or faxed within 60 days of the date on your penalty notification letter.¹¹ Past the 60-day mark, include a separate sheet explaining the delay. Attach supporting documentation such as letters from former employers, evidence of prior creditable drug coverage, or records showing you qualified for Extra Help during the disputed period.¹²

1
Medicare. Avoid Late Enrollment Penalties
2
Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles
3
Medicare.gov. Creditable Prescription Drug Coverage
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Centers for Medicare & Medicaid Services. Creditable Coverage and Late Enrollment Penalty
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Centers for Medicare & Medicaid Services. Information Partners Can Use on the Part D Late Enrollment Penalty
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Centers for Medicare & Medicaid Services. Original Medicare Part A and B Eligibility and Enrollment
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Medicare. COBRA Coverage
8
Centers for Medicare & Medicaid Services. Small Employer Exception
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Social Security Administration. How to Apply for Medicare Part B During Your Special Enrollment Period
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Medicare. When Does Medicare Coverage Start
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Centers for Medicare & Medicaid Services. Part D Late Enrollment Penalty Reconsideration Request Form
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Centers for Medicare & Medicaid Services. Late Enrollment Penalty Appeals