Medicare
What is the Medicare late enrollment penalty?
Part B late enrollment penalty: 10% per year without coverage — permanent. Part D late enrollment penalty: 1% per month without creditable drug coverage — permanent. Both penalties are avoidable by enrolling when first eligible or maintaining creditable coverage. COBRA does NOT count as creditable coverage for avoiding the Part B penalty.
Key Points
- Part B penalty: 10% per year without coverage — permanent
- Part D penalty: 1% per month without creditable drug coverage — permanent
- Penalties are avoidable by enrolling when first eligible
- Employer coverage counts as creditable coverage — no penalty while covered
- Initial Enrollment Period: 7-month window around your 65th birthday
- COBRA does NOT count as creditable coverage for Part B penalty purposes