Avoid These Costly Medicare Penalties: What You Need to Know at 65

Medicare Part A, Part B and Part D are subject to permanent penalties if you’re not careful about enrolling during the initial 7-month window of time around your 65th birthday. However, if you have a health insurance policy through work or as a self-employed individual, you are exempt from the penalties. Keep in mind that otherwise, if you get a late enrollment penalty, it sticks with you for life, even when you switch to Medicare Advantage (Part C). Below, you’ll find the three parts of Medicare that are often affected by penalties and some information about enrollment dates and about switching to Medicare Advantage.

Key Takeaways Only people who have to pay for Part A are penalized for late enrollment. Most working Americans qualify for free Medicare Part A at age 65. If you miss the seven-month window around your 65th birthday, you’ll have a permanent late enrollment fee tacked on to your monthly premiums. Unless you had a comparable prescription drug plan, you’ll incur a penalty charge for late enrollment in Part D (prescription drug plan).

Medicare Penalties Comparison Chart

Medicare Part	Premium	Penalty	Example 4 Year Delay in Enrollment
Part A	$0, $285, or $518	10% more on monthly premiums for twice the number of years you did not enroll. * Penalties only apply to those who do not qualify for free Part A.	Take a $285 premium delayed 4 years: $285x10%x8=$513
Part B	$185 to $628.90	10% of monthly premium times the number of years you did not enroll in Part B. Penalties apply to all Medicare recipients.	Take a $185 premium delayed 4 years: $185x10%x4=$259
Part D	$36.78 or more	1% monthly or 12% a year. Penalties apply to all Medicare recipients.	$36.78x1%x(12x4=36) = $50.02

Medicare Part A Penalties

Medicare Part A is hospital coverage. People who have to pay for Part A and don't enroll during the initial enrollment period will face a 10% penalty on monthly premiums for twice the number of years they delay enrollment.

Most working Americans age 65 or older paid Medicare taxes for many years and are eligible for Medicare Part A at no additional cost but some Americans have to pay their premium. ^[1]

People with disabilities and End-stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS) are entitled to benefits but have varying wait periods.

Most people with disabilities have a 24-month period after becoming eligible for Social Security or RRB benefits. However, individuals with ALS are entitled to Part A the first month they start receiving Social Security or RPB benefits. ^[1]

For people with ESRD Part A coverage begins ^[1]:

• The third month after the regular course of dialysis begins; or

• The first month a regular course of dialysis begins, if the individual undergoes self-dialysis training; or

• The month of the kidney transplant; or

• Two months prior to the transplant if the individual was hospitalized for preparation.

Unless you have to buy it, Part A coverage begins the month you turn 65, if you applied for Part A (or for Social Security or RRB benefits) within six months of the month in which you turned 65.

If an application for Part A is filed more than six months after you turn 65, coverage will only retroactively include hospital bills dating six months prior to enrollment.;

There is no fine or penalty, however, for enrolling late for Medicare Part A.

Who Has To Pay for Medicare Part A?

People who are not entitled to Medicare Part A usually did not pay taxes for Medicare for the required amount of time and neither did a spouse, parent or child. ^[1]

They will not receive Medicare benefits until they apply for Social Security or Railroad Retirement Board (RRB) benefits. Eligibility of one of these two benefits and Medicare will be considered when you apply through the Social Security Administration.

When you apply for Medicare Part A, you must also apply for Medicare Part B or you risk a lifetime penalty (more on this in the section below). To keep part A, you must be continuously enrolled in Part B.

If you receive social security or RRB benefits before age 65, you do not need to reapply.

If you miss the Initial Enrollment Period (IEP)around your 65th birthday, you can only enroll during certain enrollment periods.

Medicare Part B Penalties

Medicare Part B is medical insurance. It covers visits to the doctor, tests and treatments. Part B is free only to those individuals receiving Social Security or RRB benefits for at least four months before Medicare eligibility begins. ^[1]

Only people on social security or RRB benefits are enrolled automatically. They will be asked if they want Part B. If they decide not to enroll, they will face a permanent penalty when enrolling later.

If you are not on Social Security or RRB benefits and do not apply for Medicare Part B when you first become eligible during the Initial Enrollment Period (IEP is a seven-month window around your 65th birthday), you can only enroll during certain enrollment periods (more on this in the next section)

You will face a lifelong 10% annual penalty on Part B if you do not enroll during the IEP. ^[3]

If you have Medicare Part B due to a disability but you have a premium penalty because you enrolled later than the IEP, your penalty may be dropped after you turn 65. ^[2]

What Happens if I Miss the Initial Enrollment Period Around My 65th Birthday?

January 1 through March 31 of each year, there is a General Enrollment Period (GEP), and you can enroll in Parts A and B. In some cases, there is no late penalty charge but in most cases there is a permanent one if you miss the IEP, three months before your 65th birthday and three months after your birthday.

Your next option is to see if you qualify for an Special Enrollment Period (SEP), and you may be able to avoid the late enrollment penalty. More on this below.

When’s the Special Enrollment Period (SEP) for Medicare?

Some people defer Medicare enrollment because they have health insurance at work. If that changes and they lose coverage, they have an SEP. Coverage starts a month after an SEP, an 8-month period that begins the month the employment ends or the group health plan coverage ends, whichever comes first. ^[1]

People with ESRD cannot use the SEP to enroll in Medicare Part A or B, unless they were eligible for Tricare standard or prime (military healthcare) and fit other requirements. ^[1]

There are other instances where the lifelong Part B penalty is waived, like if an individual did not enroll in Medicare due to an unforeseen disaster or emergency or reasons outside their control. Or, if they were faced with misrepresentation of information through an employer or insurance agent. ^[1]

Incarcerated people who do not enroll in Part B or premium Part A may enroll using the SEP. The SEP starts the day they are released through the 12th month after being released from prison. They are also eligible for retroactive coverage based on specific guidelines. ^[1]

People who lost Medicaid coverage and missed a Medicare enrollment period have an SEP that starts the day they are notified of termination of Medicaid coverage and lasts six months after the termination of that coverage. Benefits start a month after Medicare enrollment. ^[1]

Medicare Part D Penalties

You have only 63 days from the initial enrollment period around your 65th birthday to enroll in Medicare Part D or an equivalent prescription drug plan or you’ll carry a 1% (12% annually) penalty for the life of the coverage you buy. ^[3]

You’re exempt from the penalty if you are eligible for ExtraHelp, also called the Low-Income Subsidy (LIS).

The national base beneficiary premium is $36.78 in 2025. Some people pay more, even without a penalty. ^[2] An example of the penalty applied: If there were 10 months after your IEP ended that you did not have a drug plan, you would pay 10% of $36.78, which comes out to $3.68 on top of the $36.78, bringing you to a total premium of $40.48 a month in premiums.

If you switched to a Medicare Advantage {MA) plan soon after qualifying for Medicare and it had prescription drug coverage, you will not be charged a penalty by going back to original Medicare and adding Part D, unless there was a lapse between the end of your IEP and the start of the MA plan.

Are There Any Medicare Part C or Medigap Penalties?

While there are no penalties for late enrollment for Medicare Supplements (Medigap) or Part C, which includes both Part A and Part B, premiums may increase the longer you wait to buy coverage. A Part B late enrollment penalty may affect the pricing of a Part C plan, which includes both A and B.

What To Do Next

• Stay enrolled in a health insurance plan if you’re delaying retirement, to avoid penalties when you apply for Medicare.

• If you are retiring and don’t have health insurance, apply during the IEP: three months before your 65th birthday through the end of the three months after your birthday.

• If you have a compelling reason for missing your IEP, write a letter to the Social Security Administration explaining why you delayed enrollment, to see if you can get the penalty waived.

• Consider switching to a Part C plan that includes Parts A & B, vision, hearing and prescription drug coverage.