Understanding the Medicare Part A late enrollment penalty

Medical News Today

12-05-2025

If a person declines Medicare Part A or misses enrollment when they first become eligible, they could face penalties for late enrollment.
There are set periods each year when people can enroll in the different parts of Medicare. Most people first become eligible for Medicare when they turn 65 years old. This triggers an initial enrollment period.
Missing initial enrollment or declining Medicare coverage may lead to penalties when a person goes to enroll at a later date. Penalties take the form of higher monthly premium payments.
Parts A, B, and D all have potential late enrollment penalties.
Learn what the Part A late enrollment penalty is, how it is calculated, and how to avoid it. Part A late enrollment penalty overview
Medicare Part A and Part B make up Original Medicare. Part B covers outpatient medical insurance, and Part A is inpatient hospital insurance.
If a person pays Medicare taxes while working for at least 10 years, they qualify for premium-free Part A. Most Medicare enrollees have no Part A premium.
People who have not paid enough Medicare taxes have to pay a monthly premium of $285 or $518 per month, depending on their tax history. If these individuals do not sign up for Medicare during their initial enrollment period, they may have to pay a late enrollment penalty.
The penalty does not apply to people who qualify for premium-free Part A. Part A penalty calculation
The Part A penalty is a 10% increase in a person's monthly premium payment. They will have to pay this penalty for twice the number of years that they went without Part A.
Here is an example of what this might look like in practice:
A person became eligible for Medicare at 65 years old but did not qualify for premium-free Part A and did not enroll. They went without Medicare Part A for 4 years before deciding to enroll.
Based on their tax history, they have a Part A premium payment of $285. Since they did not enroll in Part A when they first became eligible, they must pay a late enrollment penalty of $28.50 each month (10% of $285). They will pay this penalty for 8 years — twice the length of time that they were without Part A. Part A penalty exceptions
Not everyone who forgoes enrolling in Part A during initial enrollment must pay a late enrollment penalty. If a person qualifies for a special enrollment period (SEP), they typically do not need to pay a late enrollment penalty.
When a person has a life event that affects their health insurance or Medicare coverage, they may qualify for an SEP. SEPs allow people to enroll in Medicare during windows of time that occur directly after these life events. Possible qualifying events include:
losing employer-sponsored health insurance
moving out of your health insurance's coverage area
having a change in marital status
Here is an example: If a person did not qualify for premium-free Part A and chose not to enroll in Part A during initial enrollment because they had health insurance through an employer, they would qualify for an SEP when they lose that job or lose their coverage.
This would trigger an 8-month SEP during which they could enroll in Part A without paying the late enrollment penalty. » Learn more:What to know about the special enrollment periods for Medicare Other late enrollment penalties
The Part A late enrollment penalty is one of a few possible Medicare penalties. There are also late enrollment penalties for Part B and Part D. However, Medicare calculates these penalties differently.
Medicare Part B has a monthly premium for all enrollees. In 2025, this premium is at least $185, though it depends on a person's income. If a person goes without Part B while eligible, they may incur a penalty when they eventually sign up.
The Part B late enrollment penalty increases by 10% for every year that a person goes without Part B. It lasts as long as a person has coverage. In essence, it is a lifelong penalty.
As with Part A, a person can avoid the Part B penalty if they qualify for an SEP.
Medicare Part D is prescription drug coverage. The Part D late enrollment penalty is a 1% increase in the monthly premium payment for each month that a person goes without Part D or comparable drug coverage.
Since Part D plans are offered by private insurance companies and costs vary, the penalty is calculated based on the national base beneficiary premium of $36.78.
As with the Part B penalty, it lasts for as long as a person has coverage.
If a person is not enrolled in Medicare Part A when they are eligible, they may incur a late enrollment penalty when they do go to sign up.
The Part A late enrollment penalty is a 10% increase in the monthly premium. A person pays the penalty for twice as long as they were without Part A (in years).
There are other late enrollment penalties for Part B and Part D, but these are calculated differently.
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