Medicare Late Enrollment Penalties: A, B and D

Why Medicare has penalties at all

Medicare is built on the idea that people join when they first become eligible and stay. If people waited until they were sick to sign up, premiums would rise for everyone else. The late enrollment penalty (often shortened to LEP) is the lever Congress built in to discourage that. It is not a fine you pay once. It is a percentage added to your monthly premium, and for Part B and Part D it usually stays for as long as you have that coverage.

Each part has its own rule. That matters, because people often handle Part A correctly and still end up with a Part B or Part D penalty years later. Your first window is the Initial Enrollment Period (IEP), a seven-month stretch that starts three months before the month you turn 65, includes that month, and ends three months after, as Medicare.gov describes it. For the full set of windows, see our existing guide to Medicare enrollment periods.

The Part B penalty

According to Medicare.gov, if you do not sign up for Part B when first eligible, and you do not qualify for a Special Enrollment Period, your monthly premium may go up 10% for each full 12-month period you could have had Part B but did not. In most cases you pay it for as long as you have Part B.

The percentage is applied to the standard premium for whatever year you are in. The 2026 standard premium is $202.90. So the penalty grows each time the standard premium rises, even though the percentage stays the same.

Source: Big Sioux Benefits calculation from the CMS 2026 standard Part B premium of $202.90, rounded to the nearest $0.10 as in the Medicare.gov example. 2026 plan year; IRMAA not included.

Only full 12-month periods count. The CMS Medicare & You 2027 handbook gives the example of someone who waited 27 months: that is two full periods, so the penalty is 20%, not 27%.

Signing up late: the General Enrollment Period

If you missed your IEP and have no Special Enrollment Period, you can sign up during the General Enrollment Period, January 1 through March 31 each year. Coverage starts the month after you sign up, according to Medicare.gov. The penalty clock stops when you enroll, but any full years already missed stay on your premium.

The Part D penalty

Part D is drug coverage, and its penalty is counted in months, not years. Medicare's Part D penalty fact sheet says you may owe it if, at any time after your IEP ends, you go 63 days or more in a row without Part D or other creditable drug coverage. Creditable means coverage expected to pay, on average, at least as much as Medicare's standard drug coverage. Employers and unions tell you each year, in writing, whether their drug coverage is creditable. Keep those notices.

The math: 1% of the national base beneficiary premium multiplied by the number of full months without coverage, rounded to the nearest $0.10. CMS sets the base each year. It is $38.99 for 2026 and $41.33 for 2027. Because the base changes, your penalty in dollars can change every January, even though the number of months stays fixed.

Source: Big Sioux Benefits calculation: 1% x $41.33 (CMS 2027 national base beneficiary premium) x months, rounded to the nearest $0.10 per Medicare.gov. Illustrative.

The penalty is added to your plan premium whether you choose a stand-alone drug plan or a Medicare Advantage plan with drug coverage. People who qualify for Extra Help do not pay the Part D penalty, according to the Medicare.gov fact sheet. See our guide to Medicaid, Medicare Savings Programs and Extra Help.

The Part A penalty

Most people never face this one, because most people get Part A without a premium after 40 quarters of Medicare-taxed work by themselves or a spouse. If you have to buy Part A, the 2026 premium is $311 a month with 30 to 39 quarters or $565 with fewer than 30, according to the CMS 2026 fact sheet.

If you must buy Part A and sign up late, Medicare.gov says your premium may go up 10%, and you pay the higher amount for twice the number of years you could have had Part A but did not. Two years late means four years of the surcharge. At the full 2026 premium, 10% is $56.50 a month. Unlike Parts B and D, this penalty ends.

Coverage that protects you, and coverage that does not

The most common reason people delay Part B without a penalty is that they, or their spouse, are still working and covered by that employer's group health plan. While that coverage lasts, and for 8 months after the job or the coverage ends, whichever comes first, you have a Part B Special Enrollment Period, as described in the Medicare & You 2027 handbook. Our guide on working past 65 covers the employer-size rules that decide whether delaying is wise.

• Protects Part B: group health coverage based on current employment, yours or your spouse's.
• Does not protect Part B: COBRA or retiree coverage. Medicare.gov says the 8-month window starts when you stop working, even if you choose COBRA.
• Also avoids the Part B penalty: enrolling in a Medicare Savings Program, according to Medicare.gov.
• Protects Part D: creditable drug coverage, such as an employer, union or retiree plan that tells you in writing its drug coverage is creditable, or qualifying for Extra Help.
• Does not protect Part D: discount cards, manufacturer coupons, or drug coverage your plan has told you is not creditable.

COBRA catches many people in Sioux Falls and across South Dakota. It feels like employer coverage because it is the same insurance card, but Medicare treats it differently. The 8-month Part B window starts when your job ends, not when COBRA ends. American Indian and Alaska Native readers with IHS or tribal coverage should read our page on Medicare for American Indians in South Dakota and the answer on whether IHS counts as creditable drug coverage.

When you sign up for Part B after leaving a job, Social Security will usually want proof of the group coverage. Medicare lists the two forms, CMS-40B (application for Part B) and CMS-L564 (request for employment information), on its enrollment forms page.

If you think a penalty is wrong

For Part D, you can ask for reconsideration. The Medicare.gov fact sheet says to return the form included with your penalty notice within 60 days of the date on the letter. A Medicare contractor not connected with your plan decides, generally within 90 days, and you keep paying the penalty while you wait. CMS's appeals page describes the process. Send proof of creditable coverage, such as the annual notices from an employer or union plan.

For Part B, contact Social Security if you believe you had qualifying employer coverage, were given wrong information by a federal employee, or if a penalty was calculated on the wrong number of months. Keep copies of everything.

Figures and sources

Every figure on this page, where it comes from, and the period it covers. Checked October 19, 2026.

Official sources

• Medicare.gov: Avoid late enrollment penalties
• Medicare.gov: The Part D Late Enrollment Penalty (fact sheet)
• CMS: Medicare & You 2027 handbook
• CMS: 2026 Medicare Parts A & B Premiums and Deductibles
• CMS: 2026 Part D bid information (base beneficiary premium)
• CMS: CY2027 Part D announcement, July 28, 2026
• CMS: Late enrollment penalty appeals
• Medicare.gov: Enrollment forms (CMS-40B, CMS-L564)
• Medicare.gov: When does Medicare coverage start?

How this guide is made: the Big Sioux Benefits Data Desk writes from official sources and checks each figure against the page it cites. This is general education, not advice about your situation. Plan details vary; confirm costs and coverage with Medicare.gov, the agency named above, or a licensed agent.