What Is the Part B Penalty and How Do You Avoid It?
Avoid the Medicare Part B penalty. Learn how this permanent premium increase works, how to prevent it, and steps to take if you're assessed.
Medicare Part B provides medical insurance coverage for doctor visits, outpatient care, and preventive services. A late enrollment penalty can apply if enrollment is delayed without qualifying circumstances. This penalty adds an extra amount to the regular monthly Part B premium. This additional charge encourages individuals to enroll in Medicare Part B during their initial eligibility period.
What the Part B Penalty Is
The Medicare Part B late enrollment penalty promotes timely enrollment. This penalty results in a permanent increase to the monthly Part B premium. For each full 12-month period an individual could have had Medicare Part B but did not enroll, a 10% increase is added to their monthly premium. The penalty continues for as long as the individual remains enrolled in Part B.
Circumstances Leading to the Part B Penalty
A Part B penalty typically arises when an individual misses their Initial Enrollment Period (IEP) without other qualifying health coverage. The IEP is a specific timeframe around one’s 65th birthday when enrollment is expected. Failing to sign up during this period leads to a penalty.
Enrolling during the General Enrollment Period (GEP), which runs from January 1 to March 31 each year, generally results in a penalty if the IEP was missed and no Special Enrollment Period (SEP) applied. The penalty also applies if there is a gap in “creditable coverage” for Part B. Creditable coverage refers to health insurance comparable in value to Medicare Part B, such as an employer group health plan based on current employment. For example, a penalty might apply if someone turns 65 and does not enroll, or if they lose employer coverage and fail to enroll during the subsequent Special Enrollment Period.
Calculating Your Part B Penalty
The Medicare Part B penalty is calculated as a 10% increase for each full 12-month period an individual delayed enrollment. This percentage is applied to the standard Part B premium. For instance, if someone delays enrollment for 24 months, their monthly premium would increase by 20%.
The penalty is based on the standard Part B premium for the year the individual enrolls. The standard monthly premium for Medicare Part B is $185.00 in 2025. Using the previous example, a 20% penalty on a $185.00 standard premium would add $37.00 to the monthly cost, resulting in a total premium of $222.00. This additional amount is permanent and will adjust annually as the standard Part B premium changes.
Enrolling to Prevent the Part B Penalty
Avoiding the Part B penalty involves understanding and adhering to specific enrollment periods. The Initial Enrollment Period (IEP) is the primary window for most individuals, beginning three months before the 65th birthday month, including the birth month, and extending three months after, totaling seven months. Enrolling during this timeframe ensures coverage without penalty.
Many individuals may qualify for a Special Enrollment Period (SEP), which allows delayed enrollment without penalty under certain conditions. A common SEP applies to those covered by a group health plan through current employment, either their own or a spouse’s. This SEP provides an eight-month window to enroll in Part B after the employment or the employer group health plan coverage ends, whichever occurs first. To utilize an SEP, documentation proving prior creditable coverage, such as forms from the employer, is required. While the General Enrollment Period (GEP) from January 1 to March 31 allows enrollment if the IEP was missed, it generally leads to a penalty if there was no qualifying SEP.
Challenging a Part B Penalty
Individuals who believe they have been wrongly assessed a Medicare Part B penalty can request a reconsideration. This process allows for a review of the penalty decision. The Social Security Administration (SSA) handles these requests.
To initiate a reconsideration, individuals need to contact the SSA and submit documentation. This documentation might include proof of prior creditable health coverage, such as letters or forms from a former employer, or evidence of qualifying for a Special Enrollment Period. After submitting the request, the SSA will review the information and notify the individual of their decision.