Medicare 2026

Medicare Late Penalties: How to Avoid Part B and D Fees

Medicare late-enrollment penalties: how they work and how to avoid them in 2027.

WARWICK, R.I. — Missing a Medicare deadline can cost you every month for as long as you have coverage. That is the part many people do not realize: late-enrollment penalties for Part B and Part D are not one-time fines. They are added to your monthly premium, often for life. The good news is that they are almost always avoidable if you know the rules.

How the Part B penalty works

Part B covers doctor visits, outpatient care and many preventive services. If you do not sign up when you are first eligible — and you do not have other coverage that counts — Medicare adds 10% to your Part B premium for each full 12-month period you delayed.

That surcharge sticks. In most cases, you pay it for as long as you have Part B. So a two-year delay means a 20% higher premium, month after month, for the rest of your life on Medicare.

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. If you miss it and do not qualify for a Special Enrollment Period, you may have to wait for the General Enrollment Period (Jan. 1 – March 31), with coverage starting the month after you enroll.

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 creditable drug coverage after your Initial Enrollment Period ended. That amount is rounded and added to your Part D premium each month.

Like the Part B penalty, this one generally lasts as long as you have Part D coverage. Even a gap of a year or more can add up over time.

What "creditable coverage" means

You do not get penalized simply for delaying Medicare if you had other qualifying coverage. For Part B, that usually means active employer coverage through your job or your spouse's job. For Part D, "creditable" drug coverage means the plan is expected to pay, on average, at least as much as standard Medicare drug coverage.

Your employer, union or retiree plan is required to tell you each year whether your drug coverage is creditable. Keep those notices. If you eventually move to Medicare, they are your proof that you should not be charged a Part D penalty.

How to avoid the penalties

A few simple habits keep most people out of trouble:

• Mark your Initial Enrollment Period on the calendar as you approach 65.
• If you plan to keep working past 65, confirm in writing that your employer coverage is creditable for both medical and drug benefits.
• When you retire or lose that coverage, use your Special Enrollment Period promptly — generally eight months for Part B and 63 days for Part D.
• Even if you take no prescriptions today, consider joining a Part D plan when first eligible. A low-cost plan now is often cheaper than a lifetime penalty later.

What Warwick residents should know locally

Warwick is in Kent County, where Rhode Islanders choose from a range of stand-alone Part D plans and Medicare Advantage plans that include drug coverage. Plan availability is set at the county level, so two neighbors on the same street see the same menu of choices. What matters for penalties, though, is not which plan you pick — it is that you enroll in something creditable on time.

For free, unbiased help, Rhode Islanders can contact THE POINT, the state's SHIP (State Health Insurance Assistance Program), which offers one-on-one Medicare counseling at no cost.

Key 2027 figures to keep in mind

A few program-level numbers are worth knowing as you plan:

• The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027.
• The maximum Part D deductible is $615 in 2026 and $700 in 2027.
• The coverage gap (the old "donut hole") has been eliminated since 2025; there are now three payment phases.
• The optional Medicare Prescription Payment Plan lets you spread your drug costs across the year in monthly installments.
• Income-related Part B and Part D surcharges (IRMAA) begin above $109,000 for a single filer in 2026.