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How much is the late enrollment penalty for Medicare Part A?

Most people don’t have to pay premiums for Medicare Part A, which covers inpatient stays in hospitals and skilled nursing facilities, some home health services and end-of-life hospice care.

If you or your spouse has earned at least 40 credits through paying Medicare payroll taxes at work, essentially 10 years of work, you are entitled to Part A benefits without having to pay premiums for them. So you won’t have to pay Part A late penalties even if you sign up later than you should.

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If you aren’t eligible for premium-free Part A, you may have to pay a late enrollment penalty, except in certain circumstances. That’s why it’s important to sign up for Medicare when you are first eligible.

If you have paid Medicare taxes for fewer than 40 quarters and your spouse doesn’t have 40 quarters either, you will have to pay premiums to receive Medicare Part A coverage. In 2023, if you or your spouse paid Medicare taxes for 30 to 39 quarters, you’ll pay $278 a month for Part A. If you or your spouse paid Medicare taxes for fewer than 30 quarters, you’ll pay $506 a month for Part A.

How is the Part A late enrollment penalty calculated?

If you do have to pay premiums for Part A, the late enrollment penalty is 10 percent of either $278 or $506, added to that monthly premium. Unlike Part B penalties, it doesn’t last forever.

Instead, you will pay Part A penalties for twice the number of years that you could have paid premiums for Part A but didn’t. For example, if you delayed enrollment for three years, you would pay penalties for six years.

So if you worked for fewer than 7½ years total, or 30 quarters, you would have to pay more than $50 more a month, 10 percent of $506, as your premium penalty in 2023. If you delayed your enrollment for three years and weren’t eligible for a special enrollment period, then you would have to pay the penalty for six years. Because Part A premiums usually rise each year, your penalty will generally rise each year, too.

What are exceptions to the Part A late enrollment penalty?

If you don’t qualify for premium-free Part A, you may have to pay a late enrollment penalty if you don’t enroll in Part A during your seven-month initial enrollment period, which starts three months before the month you turn 65 and ends three months after your birthday month. Here are the exceptions:

  • Employer coverage. If you or your spouse actively works and you have health insurance from that employer, you have the right to delay Part A as well as Part B enrollment until the employment ends. If you or your spouse has earned 40 work credits by that time, you can sign up for Part A without paying premiums or incurring late penalties.

If neither of you has earned 40 credits by then, you will not pay late penalties retroactively. But you must enroll in Part A during your eight-month special enrollment period to avoid penalties going forward.

  • Medicaid. If you are covered by the federally financed but state-run health program for people with incomes under a certain amount, you do not pay Part A premiums and cannot pay late penalties
  • Medicare Savings Programs. If your state pays your Part A premiums under one of the Medicare Savings Programs, you are not liable for late penalties.
  • Living abroad. If you live outside the United States and are not entitled to premium-free Part A, you cannot enroll in Part A or Part B as long as you live abroad. Instead, you get a special enrollment period to sign up that begins during the month you return as a U.S. resident and lasts for up to two months afterward. If you enroll in Part A at that time, you are not liable for late penalties.
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Keep in mind

If you don’t yet qualify for premium-free Part A benefits and you don’t have health insurance from your or your spouse’s current employer, don’t be tempted to delay enrollment in Medicare Part B, which covers doctors’ services, outpatient care and medical equipment, until you become entitled for premium-free Part A.

If you delay, you will likely receive Part B late penalties, which you’ll have to pay for as long as you have Medicare Part B. This rule applies to anyone who is a U.S. citizen or a permanent legal resident, also known as a green card holder.

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