If you don’t enroll in Medicare Part A when you first become eligible, you may face a late enrollment penalty when you do ultimately enroll.

There are set times during the year — and during a person’s lifetime — when they can enroll in different Medicare plans, including Part A. The Centers for Medicare & Medicaid Services (CMS) recommends that you enroll in Medicare when you first become eligible.

If you miss your initial enrollment period or opt not to join a Medicare plan while having eligibility, you may incur future penalties in the form of higher monthly premium payments.

There are possible late enrollment penalties for:

  • Part A
  • Part B
  • Part D

In this article, we discuss what the Part A penalty is, how it’s calculated, possible exceptions, and more.

Medicare Part A is also called hospital insurance. It helps cover the costs of inpatient medical care and skilled nursing facility care.

Most people qualify for premium-free Part A. You qualify for premium-free Part A if you or your spouse paid Medicare taxes while working for 10 years (if you’re over 65 years old).

If you don’t qualify for premium-free Part A, you’ll have a monthly payment of $285 or $518, depending on how much you have paid in Medicare taxes. Further, if you do not enroll when you first become eligible — during your initial enrollment period — you’ll have to pay a penalty for late enrollment down the road.

If you incur a late enrollment penalty for Part A, your monthly premium payment will increase by 10%. The penalty will last for twice the length that you went without Part A in years.

Here is an example scenario: You became eligible for Medicare when you turned 65 years old, but you did not qualify for premium-free Part A, so you did not enroll. After 3 years, you decide to sign up. Because you didn’t sign up when you first became eligible, you must now pay a late enrollment penalty.

If your monthly premium for Part A is $518, you will have to pay an extra $51.80 each month. And the penalty will last for a total of 6 years — two times the length of time that you were without Part A.

There are some exceptions to the Part A late enrollment penalty. If you did not sign up for Part A during your initial enrollment period, but you qualify for a special enrollment period, you will not have to pay the penalty.

Special enrollment periods allow people who have experienced life events that affect their insurance coverage to enroll in Medicare shortly after those events occur. Examples of qualifying events include:

  • losing health insurance coverage through an employer
  • moving to an area that no longer accepts your Medicare plan
  • experiencing a change to your marital status

As an example, if you did not enroll in Part A during your initial enrollment period because you had employer-sponsored health insurance, but you lost that coverage after 3 years, you would not have to pay a late enrollment penalty.

Rather, you would qualify for a special enrollment period. This would be an 8-month window after the loss of your coverage during which you could sign up for Medicare Part A.

In addition to the Part A penalty, there are also late enrollment penalties for Part B (medical insurance) and Part D (prescription drug coverage). But these penalties are assessed differently from the Part A penalty.

With the Part B penalty, if you do not sign up for coverage when you are eligible, your monthly premium increases by 10% for each year that you go without Part B coverage.

Unlike the Part A penalty, which has a finite duration, the Part B late enrollment penalty lasts for as long as you have coverage.

As with the other late enrollment penalties, if you are eligible for Part D but do not enroll, you may face higher costs later.

The Part D penalty is an extra 1% on your premium payment for each month that you did not have Part D coverage. Medicare uses the national base premium of $36.78 when calculating the size of the penalty. Like the Part B late enrollment penalty, the Part D penalty lasts for as long as you have coverage.

If you miss your initial enrollment period, you can still sign up for Medicare Part A.

If you qualify for an SEP, the timeframe to enroll in Part A will depend on the circumstances of your qualifying event. Generally, you’ll have 6 months to 1 year after the event to enroll in Medicare.

If you do not qualify for an SEP, you will have to wait until the general enrollment period to sign up for Part A. This runs from January 1 through March 31.

If you do not sign up for Medicare when you first become eligible, you may incur a late enrollment penalty. There are late enrollment penalties for Part A, Part B, and Part D.

The Part A late enrollment penalty only applies to people who do not qualify for premium-free Part A. It involves paying an extra 10% on your monthly premium for twice the number of years that you went without Part A.