Medicare 2026

How Fort Collins beneficiaries can sidestep Medicare late fees

FORT COLLINS, Colo. — Missing your Medicare sign-up window can cost you every month for the rest of your life. That is the sting behind Medicare's late-enrollment penalties, and it is one of the most common — and most preventable — mistakes new beneficiaries make in Fort Collins and across Larimer County.

The rules are set by the federal Centers for Medicare & Medicaid Services (CMS), and they apply the same way whether you live downtown, out near Horsetooth, or up in the foothills. Here is how the Part B and Part D penalties work, when they kick in, and the simple steps that keep them from ever hitting your budget.

How the Part B penalty works

Part B covers doctor visits, outpatient care, and many preventive services. If you don't sign up when you're first eligible and you don't have other qualifying coverage (like a current employer's group plan), Medicare can charge a late-enrollment penalty.

The math is straightforward: your monthly Part B premium goes up 10% for each full 12-month period you were eligible for Part B but didn't enroll. That higher premium generally stays with you the entire time you have Part B — not just a year or two.

Most people sign up during their Initial Enrollment Period, the seven-month window that starts three months before the month you turn 65 and ends three months after. Miss that, and you may have to wait for the General Enrollment Period (January 1 – March 31) to enroll, with coverage starting the month after you sign up.

How the Part D penalty works

Part D covers prescription drugs. The penalty here is calculated differently. Medicare takes 1% of the "national base beneficiary premium" and multiplies it by the number of full months you went without Part D or other creditable drug coverage after your Initial Enrollment Period ended.

That amount is rounded to the nearest 10 cents and added to your Part D premium every month, for as long as you're enrolled in Part D. Because the national base premium can change each year, your penalty amount can shift slightly year to year.

"Creditable" is the key word. If you had drug coverage through an employer, union, or the VA that Medicare considers at least as good as standard Part D, those months don't count against you. Hang on to the creditable-coverage notices your plan sends each year — you may need them later.

The easiest ways to avoid a penalty

The good news: these penalties are almost entirely avoidable if you plan ahead.

• Know your Initial Enrollment Period. Mark the seven-month window around your 65th birthday on the calendar.
• Don't drop creditable coverage without a plan. If you're leaving an employer plan, sign up for Medicare during your Special Enrollment Period, typically the eight months after that coverage ends for Part B.
• Enroll in a Part D plan even if you take few or no drugs. A modest premium today is usually cheaper than a lifetime penalty later, and prescriptions have a way of showing up unexpectedly.
• Save your creditable-coverage letters. They are your proof if Medicare ever questions a gap.

What is new for 2027

Even if you enroll on time, it helps to know what the Part D landscape looks like heading into 2027. The out-of-pocket cap for covered drugs is $2,400 in 2027 (up from $2,100 in 2026), and the maximum Part D deductible is $700 in 2027. The old "donut hole" coverage gap is gone as of 2025, replaced by a simpler three-phase design.

Anyone who wants to spread drug costs across the year can also opt into the Medicare Prescription Payment Plan, which smooths out big pharmacy bills into monthly payments. And higher-income beneficiaries — generally single filers with income above $109,000 — may pay an IRMAA surcharge on top of their Part B and Part D premiums.

The Annual Enrollment Period runs October 15 through December 7, and the Medicare Advantage Open Enrollment Period runs January 1 through March 31. These are the main times to change plans without needing a special qualifying event.

Local help in Fort Collins

Fort Collins is in Larimer County, where residents can compare available Medicare Advantage and Part D plans through medicare.gov's Plan Finder. Availability is set at the county level, so the same options generally apply whether you live in Fort Collins, Loveland, or Wellington.

For one-on-one, unbiased help, Colorado's State Health Insurance Assistance Program (SHIP) offers free counseling to Medicare beneficiaries. SHIP counselors can review your enrollment history, check for creditable coverage, and help you understand whether a penalty applies.