Part B and Part D Late Enrollment Penalties, With Worked Examples

Medicare charges a penalty when you sign up late without a good reason, and in most cases you pay it every month for as long as you have that coverage. The Part B penalty adds 10% for each full year you went without it. The Part D penalty adds 1% of a national base amount for each month. Here is exactly how each one is calculated, with real 2026 and 2027 numbers.

Which Medicare late enrollment penalties exist?

There are three, one each for Parts A, B and D. They work differently.

How is the Part B penalty calculated?

Count the months between the end of your Initial Enrollment Period and the month you sign up, while you had no qualifying coverage. Divide by 12 and drop any fraction. Each full 12-month period adds 10% of the standard premium.

Example 1 (a 2-year delay). You waited 2 full years.

1. 2 periods x 10% = 20% penalty
2. 20% x $202.90 = $40.58
3. $202.90 + $40.58 = $243.48, rounded to the nearest $0.10: $243.50 a month

Example 2 (a near miss). Your Initial Enrollment Period ended June 30, 2023. You had no employer coverage and signed up during the General Enrollment Period in February 2026, so Part B started March 1, 2026.

1. Months without Part B: July 2023 through February 2026 = 32 months
2. 32 months contains 2 full 12-month periods = 20% penalty
3. Your 2026 premium: $243.50 a month, about $487 more a year than the standard premium

Had you waited for the next General Enrollment Period in early 2027, you would pass 36 months and owe 30% instead.

Example 3 (almost 4 years). 47 months without Part B is still only 3 full periods: 30%. In 2026 that is $202.90 x 1.30 = $263.77, or $263.80 a month after rounding.

The penalty is a percentage, so it grows when the standard premium grows. The 2027 Part B premium is not announced yet; CMS usually releases it in November. Try your own dates in the Part B penalty calculator.

How do you avoid the Part B penalty?

You will not owe the Part B penalty if:

• You had group health coverage from current employment (yours or your spouse's) and you sign up while still covered or within 8 months after the job or coverage ends. COBRA and retiree coverage do not count. See working past 65.
• You qualify for another Special Enrollment Period, including exceptional conditions such as losing Medicaid, a disaster, or wrong information from an employer or plan. See Special Enrollment Periods.
• You enroll in a Medicare Savings Program. Medicare.gov says enrolling removes the Part B penalty. Nebraska's programs are explained in Medicare Savings Programs in Nebraska.

How is the Part D penalty calculated?

The Part D penalty applies if, after your Initial Enrollment Period, you go 63 days or more in a row without Part D or other creditable drug coverage. Creditable means the coverage is expected to pay, on average, at least as much as standard Part D. Medicare calculates:

1% x national base beneficiary premium x number of full uncovered months, rounded to the nearest $0.10.

The national base beneficiary premium is $38.99 in 2026 and $41.33 in 2027 (CMS announced the 2027 figure July 28, 2026). The penalty is recalculated every January using the new base, so nearly everyone who owes a Part D penalty will see it rise in 2027.

Example 4 (14 months). You went 14 months without coverage.

Example 5 (Mrs. Martinez, from Medicare & You 2027). Her Initial Enrollment Period ended July 31, 2022. She went without drug coverage from August 2022 through December 2024, which is 29 months, and her Part D plan started January 1, 2025.

Example 6 (three years with no drug plan). 36 months uncovered is a 36% penalty: $14.00 a month in 2026 (0.36 x $38.99 = $14.04) and $14.90 a month in 2027 (0.36 x $41.33 = $14.88). That is $178.80 in penalties for 2027 alone, on top of your plan premium, and it keeps going every year you have Part D.

The penalty is added even if your plan charges no monthly premium of its own.

How do you avoid the Part D penalty?

• Join a Part D plan or a Medicare Advantage plan with drug coverage when you are first eligible, even if you take few or no medications. For 2027, CMS says the lowest standalone Part D premium in Nebraska is $5.30 a month. Compare plans on our Part D page.
• Keep creditable coverage from an employer, union, TRICARE or the VA, and save the yearly notice that says it is creditable. Tell your Part D plan about it when asked.
• Get Extra Help. People who qualify do not pay a Part D late enrollment penalty. See Extra Help.
• Do not let a gap reach 63 days. If you lose employer drug coverage, you have 2 full months after the month it ends to join a plan.

If you think the penalty is wrong, you can ask for a reconsideration within 60 days of the date on your plan's penalty letter, with proof of creditable coverage.

What about the Part A penalty?

Most people never face it, because about 99% of people with Medicare pay no Part A premium. If you must buy Part A and do not sign up when first eligible, your premium can rise 10%, and you pay that higher amount for twice the number of years you waited.

Example 7. You have fewer than 30 quarters of work and wait 2 years to buy Part A. Your 2026 premium would be $565 x 1.10 = $621.50 a month for 4 years. With 30 to 39 quarters, it would be $311 x 1.10 = $342.10.

Where can you check your situation?

Penalties depend on your exact dates and coverage history, so check before you skip anything. Use the enrollment calculator to see your windows, and read the Initial Enrollment Period guide if you are turning 65 soon. For official answers, call 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, 7 days a week (TTY 1-877-486-2048), or Nebraska SHIP at 1-800-234-7119. Or talk to Bill and bring your coverage letters.