Medicare 2026

Missed Your Medicare Sign-Up? What the Penalty Really Adds

MILPITAS, Calif. — If you're turning 65 soon, or helping a parent who is, one of the easiest mistakes to make with Medicare is also one of the most expensive: signing up late for Part B or Part D. Unlike a one-time fee, these penalties can follow you for the rest of your life, added right onto your monthly premium.

The good news is that these penalties are almost entirely avoidable once you understand the timing. Here's how they work and what Milpitas residents can do to stay ahead of them.

How the Part B late penalty works

Part B covers doctor visits, outpatient care, and preventive services. If you don't sign up when you're first eligible — and you don't have other qualifying coverage — Medicare adds 10% to your Part B premium for each full 12-month period you delayed.

So if you waited three years to enroll, you'd pay an extra 30% on top of the standard Part B premium every month. And in most cases, that surcharge sticks with you for as long as you have Part B.

Your Initial Enrollment Period is a seven-month window: the three months before the month you turn 65, your birthday month, and the three months after. Missing that window is the most common reason people end up with a Part B penalty.

How the Part D late penalty works

Part D covers prescription drugs, and it has its own separate penalty. If you go 63 days or more without "creditable" drug coverage after your Initial Enrollment Period, Medicare tacks on a lifetime penalty when you finally enroll.

The math: 1% of the "national base beneficiary premium" times the number of full months you went uncovered. That amount is rounded and added to your monthly Part D premium. Because the base premium can change each year, your penalty amount can shift slightly over time — but the number of penalty months does not go away.

"Creditable" is the key word here. It means your drug coverage is expected to pay, on average, at least as much as standard Medicare drug coverage. Employer plans, union plans, and VA benefits often qualify. Your plan administrator is required to send you a notice each year telling you whether your coverage is creditable — keep those letters.

Who's exempt — and how to use a Special Enrollment Period

You don't have to rush into Part B or Part D at 65 if you have other qualifying coverage. If you or your spouse are still working and covered by a group health plan through that job, you generally can delay Part B without penalty. When the job or the coverage ends, you get an eight-month Special Enrollment Period to sign up for Part B.

For Part D, if you had creditable drug coverage, you typically get a two-month Special Enrollment Period after that coverage ends to join a Medicare drug plan.

A few situations that don't count as creditable coverage: COBRA, retiree coverage that isn't creditable, and most Affordable Care Act marketplace plans. This trips up a lot of people, so if you're unsure, call the plan and ask directly.

Key dates to remember

• Initial Enrollment Period: The seven months around your 65th birthday.
• General Enrollment Period: January 1 – March 31, for people who missed their initial window (coverage begins the month after you enroll).
• Annual Enrollment Period: October 15 – December 7, for changing Part D or Medicare Advantage coverage.
• Medicare Advantage Open Enrollment: January 1 – March 31, for switching or dropping an Advantage plan.For 2027, it's worth knowing that Part D has an out-of-pocket cap of $2,400 and a maximum deductible of $700. The old "donut hole" coverage gap has been eliminated, and Medicare offers an optional Prescription Payment Plan that lets you spread drug costs across the year in monthly installments.

Where Milpitas residents can get help

Milpitas is in Santa Clara County, and residents here have access to free one-on-one Medicare counseling through California's SHIP program, known locally as HICAP (Health Insurance Counseling and Advocacy Program). Counselors don't sell plans — they help you understand your options, verify whether your current coverage is creditable, and time your enrollment to avoid penalties.

You can also call 1-800-MEDICARE (1-800-633-4227) or visit medicare.gov to check enrollment periods and see what applies to your situation.