Two Medicare late enrollment penalties are described the same way in almost every summary: sign up late, pay more for life. They are built on different units. The Part D drug penalty counts single months and multiplies them by a premium figure that the Centers for Medicare & Medicaid Services resets every year. The Part B medical penalty counts only completed twelve-month periods and multiplies them by a much larger premium. For 2026 the two base figures are $38.99 and $202.90. What follows is what each formula does with the same gap, and why one of them costs a different amount every January while the gap behind it does not change. What Starts the Part D Count The condition is not lateness in general. The Medicare drug coverage cost page states: “You may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Medicare drug coverage or other creditable prescriptio...
Two Medicare late enrollment penalties are described the same way in almost every summary: sign up late, pay more for life. They are built on different units. The Part D drug penalty counts single months and multiplies them by a premium figure that the Centers for Medicare & Medicaid Services resets every year. The Part B medical penalty counts only completed twelve-month periods and multiplies them by a much larger premium. For 2026 the two base figures are $38.99 and $202.90. What follows is what each formula does with the same gap, and why one of them costs a different amount every January while the gap behind it does not change.
What Starts the Part D Count
The condition is not lateness in general. The Medicare drug coverage cost page states: “You may owe a late enrollment penalty if at any time after your Initial Enrollment Period is over, there’s a period of 63 or more days in a row when you don’t have Medicare drug coverage or other creditable prescription drug coverage.” Two elements of that sentence do the work. The window is 63 days in a row, not any gap at all, and coverage that is creditable prescription drug coverage counts the same as a Medicare drug plan for this purpose.
Once triggered, the charge does not expire with the gap: “The Part D late enrollment penalty is added to your premium for as long as you have Medicare drug coverage, even if you switch plans.” A different plan next year is the same penalty next year.
The Part D Formula Counts Every Month
The calculation is stated in one sentence on the same page: “The Part D late enrollment penalty is calculated by multiplying 1% times the ’national base beneficiary premium’ ($38.99 in 2026) times the number of full, uncovered months you were eligible to join Medicare drug coverage but didn’t (and didn’t have other creditable prescription drug coverage).” The product is then “rounded to the nearest $.10”.
One percent of $38.99 is $0.3899. That is what a single month of gap is worth in 2026, and every month counts, including the first. Medicare’s own illustration uses a fourteen-month gap: “If you waited 14 months after you were eligible for Medicare to join a Medicare drug plan, and you didn’t have creditable drug coverage, you’ll have to pay a 14% late enrollment penalty in addition to your monthly plan premium.” Fourteen percent of $38.99 is $5.4586, which rounds to $5.50 a month.
Because the per-month figure carries four decimal places and the answer is rounded to a dime, the published amount does not climb in even steps. One uncovered month is $0.3899, which appears as $0.40. Ten uncovered months are $3.899, which appears as $3.90 rather than the $4.00 that ten steps of forty cents would suggest. The rounding is applied once, to the finished product, not to each month.
The word carrying the most weight in that sentence is full. The count is of full, uncovered months, so a partial month at either end of a gap is not a partial charge; it is not counted. That is the one place where the Part D formula rounds in the same direction as the Part B one, and it is worth noticing precisely because the rest of the formula does not.
One further feature of the formula is easy to miss: the multiplier is a national figure, not the premium of the plan a person actually joins. Two people with identical fourteen-month gaps owe the same $5.50 in 2026 whether their plans charge a high premium or none at all, because the calculation does not use the plan premium. It is added to whatever that premium is.
The Part B Formula Ignores Anything Short of a Year
The Part B penalty uses a period, not a month. The Medicare penalties page states it with its own example: “If you waited 2 full years (24 months) to sign up for Part B and didn’t qualify for a Special Enrollment Period, you’ll have to pay a 20% late enrollment penalty (10% for each full 12-month period that you could have signed up), plus the standard Part B monthly premium ($202.90 in 2026).” Against the 2026 standard Part B premium of $202.90, each completed twelve-month period adds $20.29 a month.
Two consequences follow from the difference in units, and neither is visible in the headline percentages.
The first sits below twelve months. A gap of 11 months produces a Part D penalty of $4.30 a month and no Part B penalty at all, because no full twelve-month period has closed. The second sits at the boundary. A gap of 23 months produces $9.00 under Part D and $20.29 under Part B. Add one month, and Part D moves to $9.40 while Part B moves to $40.58. That single month is worth $0.40 on one side and $20.29 on the other.
Put the other way, one Part B step is worth about 52 months of Part D penalty at 2026 figures: $20.29 divided by $0.3899. A 36-month gap produces $14.00 a month under Part D and $60.87 under Part B.
Annualised, the gap between the two units is easier to hold. A 24-month gap in both programs costs $112.80 a year under Part D and $486.96 a year under Part B, for $599.76 in all, and both amounts continue for as long as the coverage does. The bases also move for different reasons. The Part D multiplier is a national figure held down by statute, described below. The Part B multiplier is the standard premium itself, which is reset each year on its own schedule.
The Month Count Freezes. The Price Does Not.
The number of uncovered months is fixed once the gap closes. The figure it is multiplied by is not, and Medicare says so directly: “The national base beneficiary premium changes each year, so your penalty amount may also change each year.”
How much it can change is set by statute. In the fact sheet announcing the 2024 figures, CMS wrote: “Beginning in 2024, the annual increase in the base beneficiary premium is capped by the prescription drug law’s premium stabilization provision, not to exceed 6% per year.” The 2027 fact sheet, released July 28, 2026, restates the window: “Between 2024 and 2029, the annual increase in the base beneficiary premium is capped by the IRA’s premium stabilization provision not to exceed 6% per year.”
In each of the four years the limit has bound. CMS announced for 2024 that “the base beneficiary premium will increase by 6% in 2024 to $34.70”, and showed the 2026 figure as an explicit multiplication, “$36.78 x 1.06 = $38.99”. For the year ahead the agency states: “For 2027, the base beneficiary premium will be $41.33.” Multiplying $38.99 by 1.06 gives $41.3294, so the 2027 figure is the capped result as well.
CMS also published what the cap prevented. For 2024 it reported that “the premium stabilization provision reduced the increase in the base beneficiary premium by 14 percentage points”, and put the uncapped figure at $39.35 against the $34.70 that took effect.
Applying the formula to a gap that stays the same shows what the repricing does. A thirty-month gap is a 30 percent penalty in every one of these years. At $34.70 that is $10.40 a month, at $36.78 it is $11.00, at $38.99 it is $11.70, and at $41.33 it is $12.40. Annually, $124.80 in 2024 becomes $148.80 in 2027 for the same thirty months. The base premium rose 19.1 percent across the four years; the penalty on the unchanged gap rose 19.2 percent, the small difference coming from where each product lands against the ten-cent rounding.
The practical shape of this is that a gap closed years ago is not a settled number. Someone whose thirty-month count was fixed before 2024 has been billed four different monthly amounts for it since, none of which required any change in the underlying facts. The count is history; the price is a current-year figure. That is also why a penalty quoted in a conversation or an old letter is a figure with a year attached to it, and why the year matters as much as the amount.
Numbers to Re-check
| Figure | Basis in this article | Where to verify | When it changes |
|---|---|---|---|
| National base beneficiary premium $38.99 | Calendar year 2026 | Medicare.gov drug plan costs page; CMS Part D bid fact sheet | Announced each summer |
| Base beneficiary premium $41.33 | Calendar year 2027 | CMS fact sheet released July 28, 2026 | Final plan figures follow in the fall |
| Standard Part B premium $202.90 | Calendar year 2026 | Medicare.gov Medicare costs page | Announced each autumn |
| Six percent limit on the base premium | Applies 2024 through 2029 | CMS Part D bid fact sheets | Statutory window ends after 2029 |
| 63-day creditable coverage window | 2026 guidance | Medicare.gov drug plan costs page | Rarely; confirm before relying on it |
Where This Doesn’t Apply
- Anyone receiving Extra Help. Medicare states the exception without qualification: “However, if you get Extra Help, you don’t pay a late enrollment penalty.” None of the Part D arithmetic above applies to that group.
- Gaps covered by a Special Enrollment Period. The Part B example is written for someone who “didn’t qualify for a Special Enrollment Period”, and that qualifier changes the result rather than the arithmetic.
- Coverage that is creditable. A gap in Medicare drug coverage is not automatically an uncovered month. Other creditable prescription drug coverage counts, so months spent under it are outside the count.
- Gaps shorter than 63 days. The trigger sentence sets a threshold in days, and a shorter break does not start the month count at all.
- Plan premiums themselves. Everything here concerns the penalty added to a premium. The premium a particular plan charges is set by that plan, and the figures above say nothing about it.
- Years after 2029. The six percent limit is described by CMS as covering 2024 through 2029. Projecting the same increase past that window assumes a rule that has not been written.
What the Two Formulas Are Actually Measuring
Part D prices a gap by its length and reprices it every year against a figure Congress has capped through 2029. Part B prices the same gap by how many whole years it contains and leaves the remainder uncounted. A reader comparing the two headline rates, one percent and ten percent, will conclude that the drug penalty is the smaller problem, and at 2026 figures that is usually right in dollars. It is the only one of the two, though, that has counted every month since the first, and the only one whose amount is scheduled to be a different number next January.
This article explains how the rules are written. It is not tax, legal, or insurance advice, and it does not account for any individual situation. Amounts and thresholds change; verify the current figures at the sources named above before acting, and consult a qualified professional about any particular enrollment decision.
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