Key Takeaways
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Delaying Medicare Part B without proper coverage can result in a lifetime late enrollment penalty that adds permanent monthly costs to your premium.
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Understanding the enrollment periods and how employer coverage affects your decision can help you avoid costly and irreversible mistakes.
What Medicare Part B Actually Covers
Medicare Part B is the portion of Original Medicare that covers outpatient medical care. This includes services like:
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Doctor visits
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Preventive services (like screenings and vaccines)
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Mental health services
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Outpatient procedures
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Durable medical equipment
While Medicare Part A is typically premium-free for most people, Medicare Part B comes with a standard monthly premium—in 2025, this amount is $185. But what many don’t realize is that delaying enrollment in Part B can lead to more than just a gap in coverage—it can bring permanent penalties.
Why You Might Consider Delaying Part B
Some people choose to delay enrolling in Medicare Part B because they have other coverage. This is typically through:
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A current employer (if you or your spouse is still working and the employer has 20 or more employees)
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Certain union or retiree health plans
In these cases, you can delay without penalty—as long as you enroll in Part B during your Special Enrollment Period (SEP). But if you don’t meet the conditions or you miss the SEP, penalties will apply.
How the Part B Late Enrollment Penalty Works
If you don’t enroll in Part B when you’re first eligible and you don’t have creditable coverage, you’ll pay a late enrollment penalty for as long as you have Part B. Here’s how the penalty is calculated:
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The penalty is 10% of the standard Part B premium for every 12-month period you were eligible but didn’t sign up.
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It’s added to your premium every single month—for life.
Example Calculation
If you delayed Part B for 3 full years without creditable coverage, your monthly penalty would be 30% of the standard premium. In 2025, that would add $55.50 to your monthly premium—permanently.
The Timeline You Need to Know
There are specific enrollment windows you must follow to avoid the Part B penalty. Let’s walk through each of them.
1. Initial Enrollment Period (IEP)
This 7-month window starts:
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3 months before the month you turn 65
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Includes the month you turn 65
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Ends 3 months after that month
You should enroll in Part B during this time unless you have creditable employer coverage.
2. Special Enrollment Period (SEP)
If you’re still working (or covered under your spouse’s active employment plan), you qualify for a SEP when that coverage ends. This lasts 8 months from:
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The date your employment ends
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Or the date your group health plan coverage ends (whichever comes first)
There’s no penalty if you enroll during this window—but it doesn’t apply if you had COBRA or retiree coverage. Those are not considered creditable for delaying Part B.
3. General Enrollment Period (GEP)
If you miss both your IEP and SEP, you can only enroll during the GEP, which runs every year from January 1 to March 31.
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Your coverage starts the month after you enroll.
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But here’s the catch: you’ll pay the late penalty, and you may go uninsured for a period before coverage begins.
The Mistake Many Make: Misjudging Their Employer Coverage
Not all health insurance counts as creditable coverage when it comes to Medicare. You might think you’re covered, but if your employer has fewer than 20 employees, Medicare becomes your primary payer—even if you stay on the company plan.
In that case, delaying Medicare Part B means:
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Your employer plan won’t pay what Medicare would have paid
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You may end up paying large out-of-pocket costs
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You’ll likely owe a late enrollment penalty when you finally do enroll
Before delaying Part B, confirm with your HR department whether your employer coverage is creditable. Don’t assume—it’s too costly to guess.
The Long-Term Cost of a Short Delay
Some people try to avoid the Part B premium by postponing enrollment for just a year or two. But this short-term savings leads to long-term costs.
For example:
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A 10% penalty in 2025 adds $18.50 per month.
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Over 10 years, that’s $2,220 in additional costs.
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Over 20 years, it becomes $4,440—and the penalty never disappears.
Since the Part B premium typically increases each year, your penalty increases too because it’s always a percentage of the standard premium.
What If You Retire at 65 or Later?
If you delay retirement until age 66, 67, or even beyond, you must coordinate your health benefits properly. Here’s what you should do:
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Check whether your employer coverage remains primary after age 65.
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If not, enroll in Medicare Part B during your IEP to avoid a gap and penalty.
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If your coverage is creditable, mark your calendar for your Special Enrollment Period once you stop working.
Timing is crucial. If you wait too long, your application could be delayed, and you might have to wait until the next General Enrollment Period—exposing you to months without coverage and the start of a lifetime penalty.
What About COBRA and Retiree Coverage?
Many people assume COBRA coverage or a retiree plan protects them from the penalty, but this is a common misconception. Here’s why:
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COBRA is not considered creditable coverage for Medicare Part B.
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Neither are most retiree health plans.
If you delay Part B thinking these plans are enough, you’ll likely be penalized once you do enroll. Always check with Medicare or a licensed agent listed on this website to verify whether your current coverage qualifies.
Can You Appeal a Late Enrollment Penalty?
Yes—but only in very limited circumstances. Medicare allows appeals if:
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You received incorrect information from a federal employee
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You were unable to enroll due to a documented administrative error
Otherwise, the penalty is permanent. You cannot appeal just because you misunderstood the rules or forgot the timeline.
Steps to Protect Yourself Now
To avoid the penalty altogether, follow these practical steps:
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Enroll in Medicare Part B during your IEP unless you have verified creditable coverage
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Request written confirmation from your employer if you’re relying on their plan to delay enrollment
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Mark your SEP window carefully if you’re working beyond 65
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Avoid relying on COBRA or retiree plans as a reason to delay Part B
It’s far easier to enroll on time than to fix a mistake later.
Lifetime Penalties Don’t Just Add Cost—They Add Risk
Even if the penalty seems small, it’s the combination of risk and permanence that makes delaying Part B so financially dangerous.
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A health emergency while uninsured can lead to enormous out-of-pocket costs
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The penalty increases as premiums rise over time
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You can’t undo the penalty once it applies
Getting the timing right isn’t just about saving money. It’s about protecting your access to care and financial security for the long haul.
Don’t Let One Mistake Follow You for Life
Part B late enrollment penalties are one of the most permanent—and avoidable—costs in Medicare. A decision you make at 65 could follow you into your 80s and beyond.
Understanding your Initial Enrollment Period, confirming your current coverage, and knowing exactly when to act can help you avoid a penalty that never goes away. If you’re unsure whether you should enroll now or wait, don’t guess.
Speak to a licensed agent listed on this website today to get clear, personalized advice.
