The Medicare Part B penalty only applies to those who do not enroll in Medicare Part B when they first become eligible and have no creditable coverage in place. This penalty requires beneficiaries to pay a higher Medicare Part B monthly premium and never goes away. As long as you are enrolled in Part B, you will be required to pay the penalty.

To be eligible for Medicare Part B you must be at least 65 years old, receiving Social Security Disability Income for 24 months or diagnosed with Amyotrophic Lateral Sclerosis or End Stage Renal Disease.

Below we review what the penalty is, when it applies, and how to avoid it. You should not have to pay more than necessary for Original Medicare. That is why we are here to help.

What is the Medicare Part B Late Enrollment Penalty?

If you delay Medicare Part B enrollment without creditable coverage, you are required to pay a penalty when you decide to enroll. For each 12-month period you are eligible for Medicare Part B but do not enroll, you receive a 10% premium penalty.

In most cases, you are required to pay the penalty as long as you remain enrolled in Medicare Part B. However, if you are eligible for Medicare before age 65, your penalty will be reset at 65.

How to Calculate the Medicare Part B Penalty?

The Medicare Part B penalty is calculated on a 12-month basis. This means to receive the penalty; you must have gone without creditable coverage for more than 12 months.

For example, if you delay Medicare Part B coverage for exactly 5 years without creditable coverage, you will receive a 50% premium increase. Likewise, if you go 29 months without creditable coverage, you will receive a 20% premium increase. In the second example, since you exceed two 12-month periods without coverage but did not hit the third 12-month period, your penalty is still 20% rather than 30%.

Those who have a higher monthly income could receive a higher Part B penalty due to IRMAA. If this is the case, your penalty will be based on the standard Part B premium, not your adjusted Part B premium.

Keep in mind, there is no cap to the Medicare Part B late enrollment penalty. If you are eligible for Medicare at age 65 but do not enroll until age 75 you could be responsible for paying double the standard Medicare Part B premium. Even if you are not utilizing health coverage, it could save you money in the long run to enroll in Medicare Part B as soon as you are eligible.

When the Medicare Part B Penalty Does Not Apply

Not everyone who delays Medicare Part B will receive the Medicare Part B penalty. If you delay Medicare and have creditable coverage in place, you will not incur the penalty if you enroll in Medicare within eight months of losing your creditable coverage. 

If you have coverage from your employer or your spouse’s employer, you do not have to leave that coverage to enroll in Medicare Part B. However, once you lose this coverage you will be given a Special Enrollment Period to enroll in Medicare Part B without having to pay the penalty.

So, if you are working past age 65 you can keep your group benefits and enroll in Medicare Part A, and delay Medicare Part B. When you retire at age 70, you must enroll in Medicare Part B within eight months because your group coverage is no longer creditable.

How to Avoid the Medicare Part B Penalty?

Avoiding the Medicare Part B penalty is simple if you plan ahead. If you enroll in Medicare Part B as soon as you are eligible you will not be required to pay the penalty. However, if you do wish to delay Medicare Part B benefits, you must be sure to have creditable coverage.

Jagger Esch

Medicare Expert

Jagger Esch is the Medicare expert for MedicareFAQ and the founder, president, and CEO of Elite Insurance Partners and MedicareFAQ.com. Since the inception of his first company in 2012, he has been dedicated to helping those eligible for Medicare by providing them with resources to educate themselves on all their Medicare options. He is featured in many publications as well as writes regularly for other expert columns regarding Medicare.

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