The penalty for not signing up for Medicare when you’re first eligible is a permanent surcharge on your monthly premiums, and it applies separately to Part A, Part B, and Part D. Part B adds 10% to your premium for every full 12 months you delayed, and you pay it for as long as you have Part B. Part D adds 1% of the national base premium for each month you went without creditable drug coverage, also for life. Part A carries a 10% penalty too, but only if you have to buy Part A, and only for twice the number of years you delayed. The dollar amounts compound, so even a modest delay can cost thousands across a retirement.
The Part B Penalty Is the One That Hurts Most
For every full 12-month period you could have had Part B but didn’t enroll, your monthly premium goes up by 10%. That increase is permanent. You pay it every month for the rest of the time you carry Part B coverage.1Medicare. Avoid Late Enrollment Penalties
The penalty is calculated against the standard Part B premium, which is $202.90 per month in 2026.2Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles Delay three full years and your penalty is 30% of $202.90, or about $60.87 tacked onto every monthly bill. Delay five years and you’re looking at roughly $101.45 extra each month on top of the standard premium. There is no cap on how high the penalty percentage can climb.
If your income is high enough to trigger the Income-Related Monthly Adjustment Amount, the penalty and IRMAA are calculated separately. The penalty percentage applies to the $202.90 standard premium, not to the higher amount you pay after the income surcharge.3Medicare.gov. 2026 Medicare Costs
The Part D Penalty Accrues by the Month
The Part D penalty kicks in if you go 63 or more consecutive days without creditable prescription drug coverage after your initial enrollment window closes.4Centers for Medicare & Medicaid Services (CMS). The Part D Late Enrollment Penalty Creditable means the drug coverage was expected to pay at least as much as Medicare’s standard Part D plan. Your insurer must send a written notice each year telling you whether your coverage qualifies.
The penalty is 1% of the national base beneficiary premium multiplied by the number of full months you went uncovered. In 2026 that base premium is $38.99.5Centers for Medicare & Medicaid Services. 2026 Medicare Part D Bid Information and Part D Premium Stabilization Demonstration Parameters Twenty-four months without creditable coverage means a 24% penalty, or about $9.36 added to your monthly Part D premium. The surcharge lasts as long as you carry Part D. Because the base premium changes annually, the dollar amount recalculates each year even though the percentage stays fixed.
One exception matters: if you qualify for Medicare Extra Help (the Low-Income Subsidy), you won’t be charged a Part D late enrollment penalty. If you later lose Extra Help eligibility, Medicare won’t count any uncovered months from before you qualified.4Centers for Medicare & Medicaid Services (CMS). The Part D Late Enrollment Penalty
The Part A Penalty Only Matters If You Buy Part A
Most people get Part A at no cost because they or a spouse paid Medicare taxes for at least 10 years (40 quarters). The Part A penalty only applies if you have to buy Part A because you don’t meet that work-history threshold.6Medicare. Costs – Section: Part A (Hospital Insurance) Costs
If you owe a Part A premium and don’t sign up when first eligible, your monthly premium goes up by 10%. Unlike Part B, this penalty isn’t permanent. You pay the higher amount for twice the number of years you went without enrolling.1Medicare. Avoid Late Enrollment Penalties Delayed two years, you pay the surcharge for four.
In 2026, the Part A monthly premium is $311 for people with 30 to 39 quarters of work history and $565 for those with fewer than 30.2Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles A 10% penalty on $565 adds $56.50 a month during the penalty period.
Coverage That Won’t Protect You From a Penalty
Several types of health coverage feel like they should let you delay Medicare safely. They don’t. Assuming otherwise is how most people end up with a lifetime surcharge they didn’t see coming.
COBRA and Retiree Health Plans
COBRA and retiree plans do not count as coverage based on current employment. They don’t qualify you for a Special Enrollment Period when they end.7Social Security Administration. Special Enrollment Period (SEP) If you rely on COBRA or a retiree plan at 65 instead of enrolling in Part B, your penalty clock starts running immediately. When that coverage ends, you’ll have to wait for the General Enrollment Period to sign up, and the penalty follows you for life.
Retiree coverage creates a second problem too. Many retiree plans reduce or eliminate benefits once you become Medicare-eligible. Without both Part A and Part B in place, your retiree plan may refuse to pay claims.8Medicare.gov. Working Past 65 Check with your benefits administrator before assuming the plan will carry you.
Small-Employer Coverage
The Special Enrollment Period that protects working people past 65 generally requires the employer to have 20 or more employees. When a company has fewer than 20 workers, Medicare becomes the primary payer and the group plan becomes secondary.9Centers for Medicare & Medicaid Services. Small Employer Exception Not enrolling in Medicare at 65 in that situation exposes you to both the Part B penalty and claim denials, since Medicare was supposed to be paying first.
TRICARE for Life
Military retirees who want TRICARE for Life benefits must enroll in both Medicare Part A and Part B. TRICARE for Life won’t cover your health services without both parts in place.10TRICARE. Medicare Part B Premiums for TRICARE For Life Skipping Part B on the assumption that TRICARE has you covered triggers the permanent penalty and can leave you without functioning coverage.
Marketplace (ACA) Plans
Marketplace plans cover prescription drugs, but that coverage isn’t automatically creditable for Part D purposes. Whether a specific plan qualifies depends on the plan, and your insurer must tell you in writing each year.11Medicare.gov. Medicare and the Health Insurance Marketplace If it isn’t creditable, every month you keep the plan after becoming Medicare-eligible adds to your Part D penalty.
When You Can Delay Without Penalty
The main protection is the Special Enrollment Period tied to employer group health plan coverage. If you’re 65 or older and still actively working with health insurance through your job or your spouse’s job, you can delay Part B without penalty, provided the employer has 20 or more employees.7Social Security Administration. Special Enrollment Period (SEP)
Once you stop working or lose the group coverage, you have eight months to sign up for Part A and Part B without penalty.12Medicare. When Does Medicare Coverage Start The eight-month window starts when the employment or the group coverage ends, whichever comes first. COBRA months don’t extend it.
To claim this Special Enrollment Period, your employer completes Form CMS-L564, which documents your dates of employment and health coverage. You submit it with your Medicare enrollment application to Social Security.13Centers for Medicare & Medicaid Services (CMS). CMS-L564 Request for Employment Information Get the form signed before you leave the job. Tracking down a former HR department later is a headache that has cost people their enrollment window.
Other Special Enrollment Periods exist for specific situations, such as losing Medicaid or returning from living abroad, each with its own deadlines and documentation.12Medicare. When Does Medicare Coverage Start
If You Missed Your Window
If you miss the Initial Enrollment Period around your 65th birthday and don’t qualify for a Special Enrollment Period, you’ll have to wait for the General Enrollment Period, January 1 through March 31 each year. Coverage then starts the month after you sign up.12Medicare. When Does Medicare Coverage Start Depending on when you turned 65, you could go several months to nearly a year without Medicare, and the penalty clock keeps ticking through that gap.
Appealing a Penalty You Think Is Wrong
If you believe a penalty was calculated incorrectly, you can challenge it. The process differs by Medicare part.
For a Part D penalty, file a reconsideration request within 60 days of the notice. The form goes to the independent review entity under contract with Medicare. Include evidence supporting your case: proof of prior creditable drug coverage, records showing you were living overseas, or documentation of a medical emergency that prevented timely enrollment.14Centers for Medicare & Medicaid Services (CMS). Part D Late Enrollment Penalty (LEP) Reconsideration Request Form If you miss the 60-day deadline, you can still submit the form with a written explanation of why you were late.
For Part B, the process runs through Social Security. Request reconsideration by contacting SSA directly, and keep records of all employer coverage, including any correspondence showing prior health plan dates. Documentation is what wins these appeals; assertions alone rarely change the outcome.