Medicare Part B covers doctor’s visits and tests, diagnostic screenings, durable medical equipment and other outpatient services. This coverage costs $164.90 a month in 2023 and $174.70 in 2024 for most people. High earners pay more.
Some people delay signing up for Part B if they have other coverage, so they can avoid paying the monthly premiums. But if you don’t sign up for Medicare Part B when you’re first eligible and don’t qualify for a special enrollment period, you may have to pay a late enrollment penalty.
The late enrollment penalty adds an extra 10 percent of the standard Part B premium for each 12-month period when you could have had Part B but didn’t, and it lasts for as long as you have Part B.
How is the Part B late enrollment penalty calculated?
You typically need to sign up for Medicare parts A and B during your initial enrollment period, which begins three months before the month you turn age 65 and ends three months after your birthday month.
You may be able to delay enrolling in Medicare if you or your spouse is still working and you have health insurance through either of your employers. But after losing your job-based coverage, you have to sign up during a special enrollment period while you’re working or within eight months of losing your health insurance.
If you don’t sign up during your initial or special enrollment periods, you will face two consequences.
- A short enrollment window. You’ll be restricted to signing up during a general enrollment period, which runs Jan. 1 to March 31 each year. In the past, coverage would not begin until July 1; however, starting in 2023, coverage begins the first of the month after the month you enroll.
- A potential late penalty. Most people don’t pay a penalty for late enrollment in Medicare Part A, which covers hospitalization, because they or their spouse has paid Medicare taxes for at least 10 years and they qualify for premium-free Part A. But that won’t shield them from a Part B penalty if they could have signed up but didn’t.