How is the late enrollment penalty for Medicare Part B calculated?

Individuals who enroll in Medicare Part B after their initial enrollment period (IEP), and who do not qualify for enrollment during a special enrollment period, will be charged a 10 percent surcharge on their monthly premiums for every full 12-month period they are late in enrolling. This surcharge is permanent, resulting in monthly premiums that are higher than other Medicare beneficiaries who enrolled in a timely manner. Note, however, that the Social Security Administration does not count the months in a person's IEP when calculating the 12 month period to which the late enrollment penalty applies. Beneficiaries eligible for the Medicare Savings Programs are not assessed a late enrollment penalty.

Source: Soc. Sec. Act. § 1839; 42 C.F.R. § 408.22; 42 C.F.R. § 406.33

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