Key Takeaways

• Delaying enrollment in Medicare Part B without having other credible coverage results in permanent late penalties that increase your monthly premium for life.

• The longer you delay, the more you’ll pay—waiting just two years could raise your premiums by 20% permanently.

Why Some People Consider Skipping Part B

At first glance, delaying Medicare Part B might seem like a smart way to save money. If you’re healthy or still covered by an employer plan, you might question why you need to start paying monthly premiums for services you don’t expect to use immediately.

Medicare Part B covers outpatient care, preventive services, durable medical equipment, and some home health services. It comes with a monthly premium—set at $185 in 2025 for most people. That cost can add up quickly if you’re on a tight budget or trying to time your retirement.

But there’s a catch: Medicare penalizes you for delaying Part B enrollment unless you meet specific criteria. And those penalties are not a one-time charge—they follow you every month for the rest of your life.

Understanding the Initial Enrollment Period

Your Initial Enrollment Period (IEP) is your first opportunity to sign up for Medicare, and it sets the stage for everything that follows. The IEP begins three months before the month you turn 65, includes your birthday month, and continues for three months after. That gives you a total of seven months to enroll in Medicare Part B.

If you miss this window and don’t have other creditable coverage, you may have to wait until the General Enrollment Period to sign up—and that’s when the late penalties begin to stack up.

What Qualifies as Creditable Coverage?

Not all health insurance counts as a valid reason to delay Medicare Part B without penalty. The only way to delay enrollment and avoid the penalty is by having creditable coverage, which typically means:

• You’re still actively working and have group health insurance through your (or your spouse’s) employer.

• The employer has 20 or more employees.

If you’re relying on COBRA, retiree coverage, or Veterans Affairs benefits, Medicare does not consider these to be creditable for Part B. Once your employer coverage ends—or you stop working—you usually have an eight-month Special Enrollment Period to sign up for Part B.

The Late Enrollment Penalty: How It Works

If you don’t sign up for Part B during your IEP and don’t have creditable coverage, Medicare adds a late enrollment penalty to your monthly premium. The penalty is calculated as follows:

• 10% of the standard premium for each 12-month period you delayed enrollment.

In 2025, that means if you delay enrollment by two full years, your monthly Part B premium would be 20% higher than the base rate. And this isn’t a one-year punishment—it’s permanent.

Example (no actual dollar amounts):

• If the standard premium is X, and your penalty is 20%, you’ll pay X + 20% of X every month for life.

The General Enrollment Period Isn’t Ideal

If you miss both your Initial and Special Enrollment Periods, you must wait until the General Enrollment Period (GEP) to sign up, which runs from January 1 to March 31 each year. Your coverage then begins July 1 of that year.

This means if you missed your chance in, say, mid-2024 and didn’t qualify for a Special Enrollment Period, you’d have to wait until the GEP in early 2025, and your coverage wouldn’t start until July. That’s potentially months without coverage—and with penalties.

How Long Must You Pay the Penalty?

This is where it gets even more serious: the penalty never expires. Once it’s added to your premium, it becomes a permanent feature of your Part B cost.

Even if you were only uninsured for 24 months, that penalty follows you for the rest of your life. If you live another 20 or 30 years, those monthly extra costs will far exceed any short-term savings from skipping premiums.

Common Scenarios That Trigger Penalties

Here are a few common situations where people mistakenly delay Part B—and end up paying the price:

• Thinking retiree insurance or COBRA counts: These don’t qualify as creditable coverage for Medicare.

• Relying on a spouse’s insurance after they retire: If your spouse stops working, the group health plan usually stops qualifying.

• Failing to act after employment ends: You only get eight months to enroll once your job-based coverage ends.

• Moving abroad and not enrolling: Time spent outside the U.S. doesn’t pause your penalty clock unless you’re actively covered by a foreign employer with group health insurance.

The Impact of Compound Penalties

Many people don’t realize how quickly penalties compound over time. Unlike other fees that may be one-time or capped, the Medicare Part B penalty grows with every full year you delay enrollment.

Delaying for:

• 1 year = 10% extra

• 2 years = 20% extra

• 3 years = 30% extra

And so on. Even a short delay of 18 months is counted as two full years—meaning a 20% increase.

Planning Ahead Can Save You Thousands

To avoid the penalty trap, you need to be proactive. Ask yourself these questions:

• Am I covered by creditable employer insurance?

• When does that coverage end?

• Do I need to file any forms with Medicare (such as CMS-L564) to verify my coverage?

• When should I use my Special Enrollment Period?

Answering these questions ahead of time prevents costly oversights. If you’re unsure, it’s best to seek help.

Timing Your Enrollment the Right Way

You don’t need to enroll in Part B the moment you turn 65 if you’re still working and insured. But once that changes, act quickly to avoid penalties.

• Use the Initial Enrollment Period if you’re retiring at 65.

• Use the Special Enrollment Period if you’re retiring after 65.

• Don’t wait for the General Enrollment Period unless you have no other choice.

Keep in mind that Medicare doesn’t notify you when it’s time to enroll. The responsibility falls entirely on you.

What to Do If You Already Have a Penalty

If you’ve already incurred a Part B late enrollment penalty, there’s no appeal process unless you believe it was applied in error. In that case, you must submit proof of creditable coverage for the period in question.

Unfortunately, if the penalty is correct, it stays with you permanently. But enrolling as soon as possible minimizes further increases.

Avoiding Penalties Is Simpler Than Paying Them

The irony of the Medicare Part B penalty is that it’s easy to avoid—but nearly impossible to undo. A single missed deadline can turn into a lifelong financial burden.

So while skipping Part B might look like a short-term savings opportunity, it’s usually an expensive mistake. Avoiding penalties simply requires timely enrollment and understanding whether your existing coverage meets Medicare’s standards.

If you’re in doubt, even briefly, it’s worth talking to someone who knows the rules inside and out.

Don’t Let Enrollment Mistakes Cost You for Life

Understanding Medicare timelines and coverage rules isn’t optional—it’s essential. Skipping or delaying Part B may seem harmless at first, but the consequences are lifelong and expensive.

Avoiding penalties isn’t about luck; it’s about preparation. If you’re approaching age 65 or have recently lost employer coverage, now is the time to act.

Speak with a licensed agent listed on this website for personalized help. They can walk you through the timelines, confirm your coverage status, and ensure you don’t end up with a permanent penalty.