Costs
Late Enrollment Penalty
Quick answer
The Late Enrollment Penalty (LEP) is a permanent surcharge added to your Part B or Part D premium if you don't enroll when first eligible and don't have other creditable coverage.
Plain-English definition
Part B LEP adds 10% for each full 12-month period you were eligible but not enrolled. Part D LEP adds 1% of the national base premium for each full month without creditable drug coverage.
Why it matters
The penalty lasts as long as you have Medicare — often longer than the amount you 'saved' by delaying.
A simple example
You go 24 months without creditable drug coverage. Your Part D premium is permanently 24% higher.
Common mistakes & misconceptions
- Assuming the penalty ends after a few years — it doesn't.
Related terms
Creditable Coverage
Creditable coverage is drug coverage — usually from an employer, union, VA, or TRICARE — that Medicare considers at least as good as Part D. Having it lets you delay Part D without a penalty.
Medicare Part B
Medicare Part B is the medical insurance half of Original Medicare. It covers doctor visits, outpatient care, preventive screenings, mental health services, and durable medical equipment.
Medicare Part D
Medicare Part D is prescription drug coverage sold by private insurance companies approved by Medicare. You get it either as a stand-alone drug plan (PDP) with Original Medicare or bundled inside most Medicare Advantage plans.
Initial Enrollment Period (IEP)
The Initial Enrollment Period (IEP) is your first chance to enroll in Medicare. It's the 7-month window that starts 3 months before your 65th birthday month and ends 3 months after.
Frequently asked questions
Can the penalty be waived?+
Rarely — usually only for equitable relief cases proven with SSA.
Sources & references
📚 Where this information comes from
- Medicare.gov — official U.S. government site for people with Medicare ↗Primary source for benefits, enrollment periods, and plan comparison.
- CMS.gov — Centers for Medicare & Medicaid Services ↗Federal rulemaking, program updates, and official guidance.
- Social Security Administration — Medicare enrollment & premiums ↗Enrollment, premium withholding, and IRMAA determinations.
When you're ready, compare plans on your own terms
See Medicare Advantage plans from the insurance companies we represent, or walk the course with a licensed agent whenever you'd like a second set of eyes.
We help compare Medicare Advantage plans from the insurance companies we represent, and we don't offer every plan available in your area.
Medicare Caddies is an independent insurance agency. We are not affiliated with, endorsed by, or connected to the U.S. government, the federal Medicare program, or the Centers for Medicare & Medicaid Services (CMS). We help compare Medicare Advantage plans from the insurance companies we represent, and we don't offer every plan available in your area.