What the penalty actually is

Medicare is built to reward signing up on time, and it charges people who wait without a good reason. If you delay Part B or Part D and you did not have other qualifying coverage during the gap, Medicare can add a permanent surcharge to your monthly premium. The word that matters is permanent: in most cases the surcharge lasts for as long as you keep that part of Medicare. It is not a one-time fee and it is not something you can pay off and be done with.

Part A is usually not where this bites. Most people who worked and paid Medicare taxes for at least 40 quarters get Part A premium-free — $0 a month in 2026. People with a shorter work record buy into Part A instead, at $311 a month with 30 to 39 quarters or $565 a month with fewer than 30. For people who do pay a Part A premium a late enrollment penalty of 10% can apply, and it is paid for twice the number of years you could have had Part A and did not — so unlike the Part B surcharge, that one does eventually end. For nearly everyone else, late penalties land on Part B and Part D.

The Part B late enrollment penalty

If you do not take Part B when you are first eligible and you do not have a Special Enrollment Period to fall back on, Medicare adds a surcharge to your Part B premium. Three things are worth understanding about it:

  • It adds 10% of the standard Part B premium for each full 12-month period you could have had Part B and did not.
  • That standard premium is $202.90 a month in 2026, and the Part B annual deductible that year is $283. Two full years of delay is therefore a 20% surcharge, and it keeps growing the longer the gap runs.
  • Once it attaches it generally continues for as long as you have Part B, recalculated each year against whatever the standard premium happens to be.

Whether any of this applies to you depends on your actual dates and on whether a Special Enrollment Period was open to you at the time — that gets checked, not assumed. Getting the dates straight is the first thing we do. Our guide to when you can enroll in Medicare in Tennessee maps the windows that keep you out of penalty territory in the first place.

The Part D late enrollment penalty

Original Medicare does not cover most of the medications you take at home. That is the gap Part D prescription drug coverage fills. If you go without it after you were first eligible, and you do not have other creditable prescription drug coverage in its place, a separate surcharge can be added to your Part D premium.

  • It adds roughly 1% of the national base beneficiary premium — $38.99 in 2026 — for each full month you went without creditable prescription drug coverage, so the cost of waiting accumulates month by month rather than in one jump.
  • It is triggered by a gap of 63 days or more after you were first eligible, and the base figure is reset each year, so the dollar amount can move over time even though the penalty itself does not go away.
  • It generally continues for as long as you have Part D.

The phrase to hold on to is creditable prescription drug coverage. Drug coverage you kept through an employer, a union, the VA or a similar source may count, in which case those months do not work against you. Plan sponsors send a notice each year saying whether their coverage counts. Keep those notices. People who can produce them do not argue about this later.

It is also worth knowing what you are skipping. In 2026 a Part D plan's deductible cannot exceed $615, and once your own spending on covered drugs reaches $2,100 you pay nothing more for covered drugs for the rest of the year. In 2027 those figures move to $700 and $2,400. A hard ceiling on drug spending is real protection, and going without it to save a modest premium has a way of looking like a bad trade later.

A penalty is not the same thing as IRMAA

People mix these up constantly, so it is worth separating them. A late enrollment penalty is charged because of when you enrolled. The income-related monthly adjustment amount, usually called IRMAA, is charged because of what you earn, and it has nothing to do with being late. IRMAA begins above a modified adjusted gross income of $109,000 for one person or $218,000 for a couple filing jointly. In the first bracket it adds $81.20 to Part B and $14.50 to Part D. That makes a first-bracket Part B premium $284.10 a month in total — the total, not an extra charge sitting on top of the total. It is also not permanent the way a penalty is: it is re-evaluated as your income changes.

Where the help sits, if money is tight

Some people delay Part B or Part D because the premiums are genuinely hard to cover, and then the penalty compounds the problem. Before that happens it is worth having someone look at the assistance programs with you. The 2026 monthly income limits for one person under the Medicare Savings Programs are $1,330 for QMB, $1,596 for SLMB and $1,796 for QI, with a resource limit of $9,950. Extra Help, which assists with prescription drug costs, uses $23,940 in income and $18,090 in resources for one person in 2026. Whether any of these fit your situation is something that gets checked against your real numbers, not something we or anyone else should tell you from across a desk.

How people in Middle Tennessee actually avoid these

  • Pin down your window before your birthday month arrives. Almost every penalty we see started as a date nobody wrote down.
  • If you are still working, confirm the rules rather than assume them. Active employer coverage can let you delay Part B safely, but retiree coverage and COBRA generally cannot. See how Medicare works with employer coverage in Tennessee.
  • Keep every notice about creditable prescription drug coverage. File them somewhere you will find them.
  • Move quickly when coverage ends. Special Enrollment Periods exist for exactly these moments, and they are time-limited.

One Tennessee-specific note. Because the state has not expanded Medicaid, people who reach Medicare through disability often arrive after a long stretch with thin or no coverage, and the question of whether those months counted as creditable prescription drug coverage becomes the first thing to sort out. The good news on the supplement side is that Tennessee is broader than most states: an insurer selling Medicare Supplement coverage to people 65 and older must offer those same plans to people under 65 who have Medicare through disability or end-stage renal disease.

And the ordinary local reality applies to all of it: Medicare Advantage and Part D availability can vary by county and ZIP code, so what is on offer in Nashville is not automatically on offer in Hendersonville, Lebanon or Murfreesboro. Our Nashville Medicare page covers how we work across Davidson, Williamson, Sumner, Wilson and Rutherford counties.

How The Jordan Insurance Agency helps

If you are worried you may already owe a penalty, the first job is reconstructing the timeline — when coverage started, when it ended, what the notices said. Often the gap is smaller than people fear, or a Special Enrollment Period was available and nobody mentioned it. If you have not enrolled yet, the job is simpler: get the dates right the first time.

The Jordan Insurance Agency is an independent, licensed insurance agency with a Tennessee office at 159 4th Avenue N, Suite 100, Nashville, TN 37219. You can reach us at (615) 558-6082, Monday through Friday, 8:00 AM to 4:00 PM Central. Because we are independent we represent multiple carriers rather than one, so we can lay your real options side by side instead of steering you toward a single company. A consultation with a licensed agent is free, and your premium is the same whether you enroll on your own or with our help.