If you do not sign up for Medicare Part B when you become eligible, you may have to pay a late enrollment penalty.

You will typically become eligible for Medicare when you turn 65 years old.

If you do not sign up during your initial enrollment period, you may be charged a late enrollment penalty. But certain exceptions can keep you from having to pay the fee.

Glossary of common Medicare terms

  • Premium: The monthly amount you pay to use Medicare coverage plans.
  • Deductible: The annual amount you must spend out of pocket before the insurer will begin to cover services and treatments.
  • Coinsurance: The percentage of treatment costs you’re responsible for paying out of pocket. With Medicare Part B, this is typically 20%.
  • Copayment: The fixed dollar amount you must pay when receiving certain treatments or services. With Medicare, this often applies to prescription medications.

Everyone who is eligible for Medicare has an initial enrollment period (IEP). This period begins 3 months before your 65th birthday and ends 3 months after your birthday, for a total of 7 months.

If you do not sign up during your IEP, Medicare will generally charge you a late enrollment penalty. This is an extra amount you have to pay on top of the usual monthly Part B premium.

For anyone who has to pay a late enrollment penalty, these penalties:

  • are not a one-time late fee
  • typically last for as long as you have the coverage, which may be for your lifetime
  • get added to your monthly premiums
  • are based on how long you go without coverage and go up the longer you wait to sign up

For each 12-month period you delay enrolling in Medicare Part B, you have to pay a 10% late enrollment fee.

Calculation example

If you wait 2 full years to enroll in Medicare Part B, you will have to pay a 20% penalty fee (2 years x 10% = 20%).

This is in addition to the standard Part B premium of $185.

To calculate the exact penalty, you can use the following formula: $185 (standard Part B premium) x 10% for each year not enrolled + monthly premium

In the case of the example, this would be: $185 x 0.2 + $185 = $222.

To get this number, you would multiply $185 (the standard premium) by 20% (for 2 full years not enrolled), which results in $37. This is the extra amount that you’ll pay on top of your monthly premium. So if your monthly premium is the standard $185, you’ll add the extra $37 fee to equal $222 per month.

A note about Part B premiums

Your Part B premium is calculated based on your income. However, the late enrollment penalty is calculated based on the standard fee.

The penalty fee will be paid in addition to your monthly premium amount.

There are a few exceptions to having to pay the late enrollment penalty.

One exception is if you have other health coverage of similar value to Medicare, such as from an employer or your spouse’s employer.

Other exceptions have to do with whether you qualify for a special enrollment period (SEP). Examples of SEPs include:

  • missing the chance to sign up due to natural disaster
  • missing the chance to sign up due to misleading or false information from a health plan or employer
  • missing the chance to sign up due to incarceration
  • volunteering and serving in a foreign country

You can contact Medicare 24/7 by calling 800-633-4227 or using its online chat to find out more about SEPs.

If you do not sign up for Medicare Part B during your IEP and do not qualify for an exception, you will have to pay a late enrollment penalty.

This penalty is paid in addition to your monthly premium and is for the duration of the time you have the coverage.