Medicare has three separate late enrollment penalties, and they work nothing alike. One is a percentage of a premium you may not even pay. One is a percentage of a number almost nobody has heard of. One expires and the other two do not.
The confusion costs real money, because the fix is almost always documentation you already have. Every figure below was verified on September 6, 2026 against CMS and Medicare.gov.
The Three Penalties Side by Side
| Part A | Part B | Part D | |
|---|---|---|---|
| Who it hits | Only people who must buy Part A | Anyone who delays Part B without a valid reason | Anyone who goes 63+ days without creditable drug coverage |
| How it is calculated | 10% of the Part A premium | 10% of the standard premium for each full 12-month period of delay | 1% of the national base beneficiary premium ($38.99 in 2026) per full uncovered month |
| How long it lasts | Twice the number of years you delayed | For as long as you have Part B | For as long as you have Medicare drug coverage |
| Typical 2026 amount | $31.10/mo (on the $311 premium) or $56.50/mo (on the $565 premium) | $20.29/mo per full year of delay; $40.58/mo after 2 years | About $0.40/mo per uncovered month; $11.30/mo after 29 months |
| Recalculated each year | Yes, tracks the Part A premium | Yes, tracks the standard Part B premium | Yes, tracks the base beneficiary premium |
The Part B Late Enrollment Penalty
If you do not sign up for Part B when you are first eligible, your monthly premium may go up 10% for each full 12-month period you could have had Part B and did not. Medicare.gov is explicit that you pay it for as long as you have Part B.
The 2026 standard Part B premium is $202.90, up $17.90 from $185.00 in 2025, per the CMS fact sheet released November 14, 2025. So each full year of delay adds $20.29 a month.
Medicare’s own 2026 example: wait two full years (24 months) without qualifying for a special enrollment period and you owe a 20% penalty. That is $202.90 plus $40.58, which comes to $243.48, rounded to $243.50.
The word full matters more than people expect. The Medicare & You 2026 handbook uses a case where someone’s initial enrollment period ended in December 2021 and he did not sign up until March 2024. He went 27 months without Part B, but that contained only two complete 12-month periods, so his penalty is 20%, not 25% or 27%.
Because the penalty is a percentage of the standard premium, it grows every year the premium grows. A 20% penalty was $37.00 a month in 2025 and is $40.58 in 2026.
The Part D Late Enrollment Penalty
This one is calculated off a figure that never appears on a plan brochure: the national base beneficiary premium. CMS sets it each summer. For 2026 it is $38.99, announced in the July 28, 2025 Parts C and D release along with the national average monthly bid amount of $239.27.
The math, per Medicare.gov:
1% of $38.99, times the number of full uncovered months, rounded to the nearest $0.10.
An uncovered month is a month you were eligible for Medicare drug coverage, did not have it, and did not have other creditable prescription drug coverage. The penalty attaches once you have gone 63 or more days in a row without either.
One uncovered month costs about $0.39, which rounds to $0.40 a month. Twelve months costs 12% of $38.99, or $4.68, rounding to $4.70 a month. The handbook works a longer example: a beneficiary with 29 uncovered months owes 29% of $38.99, which is $11.31, rounded to $11.30 a month in 2026 on top of her plan premium.
Note what that same person paid in 2025. The 2025 base beneficiary premium was $36.78, so her penalty was 29% of $36.78, or $10.66, rounded to $10.70. The percentage is frozen at 29% forever. The dollar amount moves every January with the base premium.
That annual recalculation is the part people miss. Your Part D penalty is not a fixed dollar figure you can budget once.
The Part A Penalty, and Why Most People Ignore It
Most people get Part A premium-free because they or a spouse paid Medicare taxes for at least 40 quarters. Those people cannot incur a Part A penalty at all.
For 2026, people who do have to buy Part A pay $311 a month with 30 to 39 quarters of coverage, or $565 a month with fewer than 30 quarters. If you do not buy it when first eligible, the premium may go up 10%, which is $31.10 or $56.50 a month at 2026 rates.
The Part A penalty is the only one with an end date. You pay the higher premium for twice the number of years you could have had Part A and did not. Delay two years, pay the surcharge for four, then it stops.
Creditable Coverage and Who Is Legitimately Exempt
CMS defines creditable prescription drug coverage as coverage expected to pay, on average, at least as much as standard Medicare drug coverage. If you had it, the months do not count against you.
The Medicare & You 2026 handbook names the common sources: drug coverage from a current or former employer or union, TRICARE, the Indian Health Service, and the Department of Veterans Affairs. Entities that sponsor drug coverage must send Medicare-eligible members a written creditable coverage disclosure notice each year before October 15, and must also file an online disclosure with CMS.
On the Part B side, the exemption is narrower and turns on current employment. Group health coverage from your own or a spouse’s active job lets you delay Part B without penalty. The handbook is blunt that coverage based on current employment does not include COBRA, retiree coverage, VA coverage, individual marketplace coverage, or coverage continued through severance or layoff. People who assume COBRA protects them are the classic penalty case.
TRICARE cuts differently for Part B. Active-duty service members and active-duty family members do not have to take Part B to keep TRICARE. Everyone else with TRICARE generally must sign up for Parts A and B when first eligible, and CHAMPVA requires both.
Enrollment Periods That Prevent the Penalty
- Initial enrollment period. Seven months: the three months before the month you turn 65, that month, and the three months after.
- Special enrollment period for employer coverage. Eight months beginning after your initial enrollment period ends, and ending eight months after the group coverage or the employment ends, whichever comes first. Sign up during this window and you generally owe no Part B penalty.
- General enrollment period. January 1 through March 31 each year, with coverage starting the month after you sign up. This is the catch-up window, and it is the one that usually comes with a penalty attached.
- Medicare Savings Program enrollment. Medicare.gov states you may not have to pay a Part B late enrollment penalty if you enroll in one. See our guide to Medicare Savings Programs for the income and asset tests.
- Recent loss of Medicaid. The handbook notes a path to sign up for Parts A and B without a late enrollment penalty for people who lost Medicaid and had not previously enrolled.
How to Challenge a Part D Penalty
Your drug plan, not Social Security, notifies you of a Part D penalty. The letter arrives with a Part D Late Enrollment Penalty (LEP) Reconsideration Request Form.
Fill it out and send it to the independent review entity, currently C2C Innovative Solutions, generally within 60 days of the date on the letter. If you are past 60 days, attach a separate sheet explaining why. CMS says the IRE will usually notify you of its decision within 90 calendar days of receiving the request.
The argument that wins is documentary. Evidence of creditable coverage during the months the plan counted as uncovered is the strongest submission, which is why Medicare tells you to keep those annual notices. The form also allows a claim that the notice you received about creditable coverage was inadequate or that you never got one.
A Part B or Part A penalty is a different process entirely, handled through Social Security rather than through a drug plan.
Extra Help Wipes Out the Part D Penalty
If you qualify for Extra Help, the Part D low-income subsidy, you do not pay a Part D late enrollment penalty. Medicare.gov states this flatly on its Part D costs page and the handbook repeats it.
You are automatically enrolled in Extra Help if you have Medicaid, a Medicare Savings Program, or Supplemental Security Income. Otherwise you apply through Social Security. Our guide to Medicare Extra Help walks the current income and resource limits and the application.
This is the single largest reason to check Extra Help eligibility even if you think your income is too high. A penalty you have been paying for years stops going forward.
The Part B Give-Back Benefit, Briefly
“Give back” is marketing language, not a Medicare program. What it describes is a Part B premium reduction, which the Medicare & You handbook lists as one of the ways Medicare Advantage plan costs differ: some plans will help pay all or part of your Part B premium.
Three things to keep straight. It varies by plan and by county, so it is not available everywhere. It does not remove a late enrollment penalty or an income surcharge. And you must still be enrolled in Part B to receive it, since the plan is crediting back a premium you are otherwise paying.
Where the Penalty Sits Relative to Other Charges
A late enrollment penalty and an income surcharge are separate, and both can apply at once. If your income two years ago exceeded $109,000 filing individually or $218,000 filing jointly, you also owe the surcharge described in our guide to Medicare IRMAA and how to appeal it. One is about when you enrolled, the other about what you earned.
Once a penalty is locked in, the savings have to come from the drug spending itself. The Medicare Prescription Payment Plan spreads out-of-pocket costs across the year at no interest, Medicare Easy Pay keeps the premium from lapsing, and manufacturer programs in our roundup of prescription assistance programs can cover specific drugs outright. For drugs you pay cash for outside the plan, compare GoodRx versus SingleCare and check Cost Plus Drugs pricing, since a cash price below your copay is common on older generics.
Bottom Line
The Part D penalty is small per month and large over a lifetime, roughly 40 cents a month for every month you were uncovered, reset each January against a base premium that keeps rising. The Part B penalty is the expensive one at $20.29 a month for every year of delay, permanently. The Part A penalty is real but rare and it expires.
If a penalty letter arrives, the first move is the same in every case: find the paperwork proving you had creditable coverage or qualified for a special enrollment period, and file the reconsideration inside the 60-day window.
One note on next year’s figures, because the two halves of this are at different stages. CMS published the 2027 Part D national base beneficiary premium on July 28, 2026, and it is $41.33, up 6% from $38.99. That means your 2027 Part D penalty is already calculable today: multiply $41.33 by 1% for each full uncovered month, then round to the nearest 10 cents. The 29-month example above goes from $11.30 a month in 2026 to $12.00 in 2027, since 29% of $41.33 is $11.99. The 2027 Part B premium is a different story. CMS publishes it in a fact sheet each November, so as of September 6, 2026 there is no 2027 Part B figure and any Part B penalty amount quoted for 2027 is a projection.