What is the Medicare Penalty?

If you do not sign up for Medicare Part B as soon as you are eligible, you risk incurring a lifelong penalty.

Author Attorney Lloyd Bemis:
Updated: 1/26/2023

For every year that you were eligible for Part B but did not pay for it, your premium will go up ten percent.

If you do not sign up for Medicare Part B as soon as you are eligible, you risk incurring a lifelong penalty.
For every year that you were eligible for Part B but did not pay for it, your premium will go up ten percent.

Medicare is a government health insurance program for Americans over 65 or who have been on Social Security disability benefits for more than two years.

There are four parts of Medicare which all work a little differently:
Part A
is Hospital Insurance and will cover costs associated with hospital stays.
Part B
is regular Medical Insurance and covers doctor’s appointments
Part C
allows private insurers to supplement Medicare part A and B. These are also known as Medicare Advantage plans.
Part D
covers prescription drugs.

If you have been denied disability for you may still qualify for benefits. Contact an experienced Social Security disability lawyer at 512-454-4000

In general, most Social Security beneficiaries (both the retired and disabled) get Medicare Part A and Part B.

In most cases, Part A is covered by Medicare taxes paid while the beneficiary was working. For those who are not eligible for “premium-free Part A”, hospital insurance can cost over $500 a month, making it cost-prohibitive. Most people on disability or retirement receive Part A at no cost.

Unlike Part A, most people have to pay a premium for Part B.

The premium changes yearly and is higher for those earning over $106,000 per year, but most people pay the standard premium of $185.00 (2025). There is a provision in place called the “hold harmless” rule that keeps ever-increasing premium expenses from devouring stagnant benefit checks. Even still, $185.00 per month is a lot of money for people living on disability benefits, and many opt out of Part B, especially if they have another way of paying medical expenses.

Medicare part A has the same penalty in place. However, most people who receive part A do not pay their own premiums.

Unfortunately, not paying the premium in the short-term can result in long-term consequences.

If you do not sign up for Medicare Part B as soon as you are eligible, you risk incurring a lifelong penalty. For every year that you were eligible for Part B but did not pay for it, your premium will go up ten percent. In other words, if you choose to not pay the $185.00 per month premium for the first year you are eligible, you will end up paying $203.50 per month (assuming the premium doesn’t go up) when you do sign up. It should be noted that the penalty is 10% per year that the eligible individual is not enrolled. If you were to enroll in the eleventh month, you would avoid the 10% penalty.

Medicare part A has the same penalty in place.

However, most people who receive part A do not pay their own premiums. Part D has a similar penalty. If you become eligible for Part D and do not enroll, when you do enroll there is 1% penalty for every month. This penalty can be avoided if you already have drug coverage that is equal or better than Medicare- also known as “creditable” coverage.

Contact a Social Security disability lawyer at 512-454-4000 for a free consultation and see if you can get disability benefits. If you have been denied disability don’t give up!

Many people do not know about these penalties and end up facing them unexpectedly.

Most people on SSDI or retirement benefits don’t have much money to begin with. They think they are doing the right thing by saving the cost of their Medicare premium, but end up putting themselves in a situation where they will end up paying more.

Author: Attorney Lloyd Bemis has been practicing law for over 35 years. He is Superlawyers rated by Thomson Reuters and is Top AV Preeminent® and Client Champion Gold rated by Martindale Hubbell. Through his extensive litigation Mr. Bemis obtained dual board certifications from the Texas Board of Legal Specialization. Lloyd is admitted to practice in the United States District Court – all Texas Districts and has argued before the U.S. Court of Appeals, Fifth Circuit. Mr. Bemis is a member of the Travis County Bar Association. He has been active in the American Association for Justice and is a past Director of the Capital Area Trial Lawyers Association. Mr. Bemis and all the members of Bemis, Roach & Reed have been active participants in the Travis County Lawyer referral service.