This Medicare Timing Mistake Could Follow You for Life

Once you turn 65, it's time to enroll in Medicare, the nation's health insurance program for retired folks. Don't delay in signing up, or you could pay a permanent penalty.

Find out more about the huge mistake that could haunt you for the rest of your life, and how to ensure you avoid wasting money needlessly.

When should you sign up for Medicare?

Once you turn 65, you will enter your initial enrollment period for Medicare. For Medicare Part A and Part B, this period starts three months before the month of your birthday and ends three months after it.

Medicare Part A covers both hospital and inpatient care. Medicare Part B covers outpatient and preventative health care.

There is an exception to this rule: If you were born on the first day of the month, your initial enrollment period begins four months before your birthday month and continues for two months after.

How do you enroll in Medicare?

If you have enrolled in Social Security benefits, you will be automatically enrolled in Medicare Part A and Part B.

If you haven't yet applied for Social Security, you need to contact the Social Security Administration (SSA) to inform it that you are ready to enroll.

What happens if you miss the deadline?

If you fail to sign up for Medicare before the deadline, you might have to pay a late enrollment penalty that will be attached to your monthly premium for Part B coverage.

This is not a one-time fee, but a permanent penalty that lasts for the rest of your life.

How much more could I end up paying if I delay Part B enrollment?

Delaying signing up for Medicare Part B results in a stiff punishment. For each year that you could have signed up for Part B but did not, you will pay a 10% penalty.

This fee will continue for as long as you have Medicare coverage.

The U.S. Centers for Medicare and Medicaid Services (CMS) offers this example of how costly the Part B penalty might be: If you delay signing up for Part B for 24 months, a $40.58 penalty is added to the standard premium of $202.90.

This results in a total monthly premium of $243.50, as the premium is rounded to the nearest 10 cents.

How much more could I end up paying if I delay Part A enrollment?

Most people enrolled in Part A do not have to pay a premium for the coverage. For them, a late signup will not result in a financial penalty.

However, some people are required to pay for Part A. For those folks, the penalty for missing the Part A deadline is a 10% increase in their monthly premium. They will have to pay the penalty for twice the number of years they did not sign up.

Are there any exceptions to this penalty?

You do not have to sign up for Medicare Part B coverage if you are still employed and have coverage through a group health plan.

Once the workplace plan no longer covers you, you have eight months to sign up for Medicare.

Are there penalties for delaying signing up for Medicare Part D?

Medicare Part D offers prescription drug coverage. You also may be hit with a penalty if you fail to sign up for this coverage in time.

Such a penalty will be assessed if you enroll in Part D coverage after your initial enrollment period elapses and you go for more than 63 days without medication coverage that is deemed to be at least as good as Part D coverage.

The penalty for missing the Part D deadline is an extra 1% for each month you are late. This is also a permanent penalty.

CMS offers the following example of how a penalty works: If you delay signing up by 14 months after the deadline, your late enrollment fee will be 14%.

The national based beneficiary premium is $38.99 in 2026. That means a $5.50 penalty will be added to your premium each month.

It is important to note that if you have COBRA coverage after leaving an employer, the prescription coverage may or may not be deemed "creditable" enough to avoid the Part D penalty.

Some people may simply assume they can avoid the penalty due to their COBRA coverage, but this is not always the case.

Are there other Medicare penalties I should know about?

If you are used to contributing to a health savings account (HSA), note that you can no longer make contributions once you sign up for Medicare.

If you plan to enroll in Medicare when you turn 65, you must end HSA contributions no later than the month before your birthday. If you plan to work past the age of 65, end contributions six months prior to applying for Medicare.

If you continue to make contributions to an HSA after enrolling in Medicare, your contributions and any income from those contributions are subject to a 6% excise tax. You will continue to owe this tax for as long as the money is in the account.

Bottom line

As you craft a retirement plan, be sure to pencil in a period around your 65th birthday when you will sign up for Medicare coverage.

Failing to sign up for Medicare on time can result in permanent and costly penalties. Fortunately, a little advanced planning can help you avoid having to pay more for medical coverage than is necessary.