Medicare Part B Late Enrollment Penalty
Learn how the Part B late enrollment penalty affects your Part B premium amount.
What Is the Medicare Part B Late Enrollment Penalty?
The late enrollment penalty for Medicare Part B is a 10% increase to the cost of your Part B monthly premium for each 12-month period you were eligible to enroll but did not.
What is particularly important to note about the Part B late enrollment penalty is that it continues to apply for as long as you have your Part B coverage.
Who Is Affected by the Part B Late Enrollment Penalty?
Every individual that enrolls in Medicare Part B is required to pay a monthly premium for his or her coverage.
Your own Part B premium amount is determined by the annual income you report on your taxes. A Part B late enrollment penalty increases the amount of your monthly premium.
If you didn’t sign up for Part B when first eligible (Initial Enrollment Period), then you will likely face a late enrollment penalty that increases the cost of your monthly premium.
Qualifying for a Special Enrollment Period
Note, however, that in certain cases you may qualify for a Special Enrollment Period.
This means that you can enroll in Medicare outside of your Initial Enrollment period without facing penalty.
This may apply if you are still employed and currently covered under an employer group health plan, as well as other potential scenarios.
You can check for qualifying special circumstances here.
How Does a Late Penalty Affect My Part B Premium?
If you have missed enrolling during your Initial Enrollment Period but still wish to purchase Part B coverage, the sooner you enroll the better.
For each full 12-month period that you were eligible to enroll in Part B but did not do so, your Part B premium amount will increase by 10%.
Note, however, that it must be a full 12-month span for an increase to take place.
Part B Late Enrollment Penalty Example 1:
So, for example, let’s say that you enrolled in Part B two and a half years late (i.e. 30 months after your Initial Enrollment Period ended).
In this case your late enrollment penalty would be a 20% increase to your Part B monthly premium.
The penalty is 20% because there were two full 12-month periods during that span.
Even though you waited an additional 6 months beyond the two 12-month periods (30 months in total), you did not reach a third 12-month threshold that would raise your premium amount an additional 10%.
Part B Late Enrollment Penalty Example 2:
Now, let’s say that you enrolled in Part B forty-nine months late (i.e. a little over 4 years).
The late enrollment penalty in this case would be a 40% increase to your Part B monthly premium.
The penalty is 40% because there were four full 12-month periods that occurred during that span.
Even though you just barely crossed the threshold by a month in the fourth 12-month period, it still adds an additional 10% to your penalty.
This Part B late enrollment penalty will apply to your Part B monthly premium for as long as you continue to have Part B coverage.
Up Next: Medicare Part B Premium 2020