How much is the late enrollment penalty for Medicare Part B?

Medicare Part B covers doctor’s visits and tests, diagnostic screenings, durable medical equipment and other outpatient services. This coverage costs $164.90 a month in 2023 and $174.70 in 2024 for most people. High earners pay more.

Some people delay signing up for Part B if they have other coverage, so they can avoid paying the monthly premiums. But if you don’t sign up for Medicare Part B when you’re first eligible and don’t qualify for a special enrollment period, you may have to pay a late enrollment penalty.

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The late enrollment penalty adds an extra 10 percent of the standard Part B premium for each 12-month period when you could have had Part B but didn’t, and it lasts for as long as you have Part B.

How is the Part B late enrollment penalty calculated?

You typically need to sign up for Medicare parts A and B during your initial enrollment period, which begins three months before the month you turn age 65 and ends three months after your birthday month.

You may be able to delay enrolling in Medicare if you or your spouse is still working and you have health insurance through either of your employers. But after losing your job-based coverage, you have to sign up during a special enrollment period while you’re working or within eight months of losing your health insurance.

If you don’t sign up during your initial or special enrollment periods, you will face two consequences.

• A short enrollment window. You’ll be restricted to signing up during a general enrollment period, which runs Jan. 1 to March 31 each year. In the past, coverage would not begin until July 1; however, starting in 2023, coverage begins the first of the month after the month you enroll.

• A potential late penalty. Most people don’t pay a penalty for late enrollment in Medicare Part A, which covers hospitalization, because they or their spouse has paid Medicare taxes for at least 10 years and they qualify for premium-free Part A. But that won’t shield them from a Part B penalty if they could have signed up but didn’t.

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For example, if you enroll in Part B 26 months late, you’ll have to pay a $32.98 late enrollment penalty every month in 2023, in addition to your $164.90 Part B premium. That’s 20 percent of $164.90 because the penalty is based on 12-month periods. Your monthly premium will be $197.90 in 2023 because the amount is rounded to the nearest 10 cents.

Since Part B premiums usually rise each year, your late enrollment penalty usually rises as well. In 2024, it’s based on the $174.70 monthly premium. The penalty lasts for as long as you have Medicare Part B, whether you have coverage through original Medicare or a Medicare Advantage plan. This is different from the Part A penalty, which lasts for a finite time.

If you should have signed up for Medicare at age 65, the penalty calculation is based on the time that elapsed between the end of your initial enrollment period and the end of the general enrollment period in which you finally sign up. If you delayed enrollment after age 65 because you were receiving health insurance through your or your spouse’s active employment, the penalty calculation is based on the time between the end of the employment — not the end of your special enrollment period eight months later — and the end of the general enrollment period when you finally sign up.

What are exceptions to the Part B late enrollment penalty?

• Less than a year without Part B. If you miss your enrollment deadline but sign up during the next general enrollment and fewer than 12 full months have lapsed, you will not pay a penalty. So if your initial enrollment period ends May 31, 10 months will have passed before the March 31 end of the general enrollment period.

• A reset of the penalty clock. If you’re younger than 65, have Medicare because of a disability and are paying Part B late penalties, you will no longer pay them after you turn 65. At that point, you become eligible for Medicare based on age instead of disability.

• Medicaid. If you’re enrolled in this federally financed but state-run health program for people with incomes below a certain amount, in addition to Medicare, your state pays your Part B premiums. Any late penalties are waived.

• Medicare Savings Programs. If you qualify for state assistance in paying Medicare costs under one of the MSPs, the state pays your Part B premiums and you’re not liable for late penalties.

• Living abroad. If you live outside the United States and its territories and are not entitled to premium-free Part A benefits, you cannot enroll in Part A or Part B abroad. Instead, you get a special enrollment period to sign up that begins during the month you return as a U.S. resident and lasts for up to two months afterward. If you enroll at that time, you’re not liable for Part A or Part B late penalties.