Written by Christopher Duncan, Certified Medicare Insurance Planner™, Retirement Income Certified Professional® | 2026
The Medicare Part B penalty is the most expensive mistake a veteran makes at 65, and almost nobody warns you about it. Its official name is the Medicare Part B late enrollment penalty. Skip Part B for three years and the penalty adds up to $8,880 over twelve years. Skip it for five years and the penalty passes $12,000 in the first ten. The penalty is permanent. It never goes away. There is no reset button.
My best friend Jeff takes calls from veterans every single day. Same sentence on almost every call. “I didn’t know the penalty was permanent.” This article is the warning those veterans never got.
The Medicare Part B Penalty: The Rule
Federal law sets the rule. If you do not enroll in Medicare Part B when you are first eligible, and you do not have other creditable coverage, Medicare adds a penalty to your premium when you finally enroll.
The Rule
The Medicare Part B late enrollment penalty is 10% of the standard premium for every full 12-month period you were eligible for Part B and did not enroll. The penalty is added to your premium every month for as long as you have Part B. For most veterans, that means for life.
The penalty is a percentage, not a fixed dollar amount. That detail matters more than anything else on this page. When the standard premium goes up, and the standard premium goes up almost every year, the penalty goes up with it.
VA Health Care Is Not Creditable Coverage for Part B
Here is what most veterans believe. “I have VA health care. I do not need Medicare. I will enroll later if I ever need it.”
VA health care is not creditable coverage for Medicare Part B. That is not my opinion. That is how Medicare treats it. Having VA health care does not protect you from the Medicare Part B late enrollment penalty. Every year you rely on the VA alone past your enrollment window is a year the penalty clock is running.
Do not take my word for it. The VA’s own website says it:
“If you delay signing up for Medicare Part B (coverage for doctors and outpatient services) and then need to sign up later because you lose your VA health care benefits or need more choice in care options, you’ll pay a penalty. This penalty gets bigger each year you delay signing up—and you’ll pay it every year for the rest of your life.”Source: VA.gov, VA health care and other insurance
Think about that. The VA is warning you about this penalty on the VA’s own website. For the rest of your life. That is not me. That is the VA.
Your 7-Month Window
When you turn 65, you have a 7-month Initial Enrollment Period for Medicare Part B. Three months before your birthday month, your birthday month, and three months after.
If you have been receiving Social Security benefits for at least 4 months before you turn 65, Medicare enrolls you in Part A and Part B automatically. The Part B premium comes out of your Social Security check.
If you are not receiving Social Security yet, nobody enrolls you. You have to do it yourself. Most of the veterans Jeff talks to who got hit with the penalty fall into this group. They were still working, or they were waiting on Social Security until 67 or 70, and they assumed Medicare would find them. Medicare does not find you.
Miss the window without creditable coverage and the Medicare Part B late enrollment penalty begins.
The $8,880 Medicare Part B Penalty Math
The 2026 standard Part B premium is $202.90 a month. Here is what a three-year delay does to it.
| Line | Amount |
|---|---|
| 2026 standard Part B premium | $202.90 per month |
| Three full years delayed | 30% penalty |
| Penalty per month ($202.90 × 30%) | $60.87 |
| What you pay instead of $202.90 | $263.77 per month |
| Penalty per year | $730.44 |
| Penalty over 12 years, premium frozen at $202.90 | $8,765 |
$8,765 is the floor. It assumes the premium never moves. The premium goes up almost every year. Because the Medicare Part B late enrollment penalty is a percentage of the premium, every increase raises the penalty too. One modest increase along the way and the 12-year total passes $8,880 and keeps climbing. Over 20 years the number is far worse. And the penalty does not stop at year 12 or year 20. It stops when you do.
The Five-Year Veteran
Remember the veteran who thought he was saving money by skipping Part B? He skipped $202.90 a month for five years. That is $12,174 he kept in his pocket. Then he needed Medicare.
| Line | Amount |
|---|---|
| Five full years delayed | 50% penalty |
| Penalty per month ($202.90 × 50%) | $101.45 |
| What he pays instead of $202.90 | $304.35 per month |
| Penalty per year | $1,217.40 |
| Penalty over 10 years, premium frozen | $12,174 |
Ten years in, the penalty alone has eaten every dollar he “saved.” He is still paying. That is not savings. That is the most expensive decision he ever made, and it renews every month for life.
The Double Whammy
Two things go up every year for a veteran paying the penalty. The premium goes up. The penalty, which is a percentage of the premium, goes up with it. A veteran who enrolled on time absorbs one increase. A veteran paying the Medicare Part B late enrollment penalty absorbs both.
No appeals. No exceptions for veterans. No forgiveness after a certain number of years. The only way out of the penalty is to never earn it.
Nobody Is Required to Enroll. Here Is What Skipping Costs.
Nobody in the United States is required to enroll in Medicare. Not you. Not any veteran. Not anyone at 100% Permanent and Total. It is your decision. Skip Part B and you lose three things at once.
- The federal subsidy. The federal government pays approximately 75% of what Part B costs. Roughly $7,300 a year, set aside for you, funded by the income taxes you paid your entire career. Decline Part B and you walk away from all of it.
- Your penalty protection. The Medicare Part B late enrollment penalty, 10% for every full 12 months, permanent, stacking on a premium that goes up almost every year.
- TRICARE for Life or CHAMPVA, if you have either. Both require at least Medicare Part A and Part B. Decline Part B and that coverage ends.
Three forfeitures. All at once. All permanent.
Page 11 After the Medicare Part B Penalty
Here is what most veterans do not know. Enroll on time, with no penalty, and you have the option to explore the Medicare Advantage plans available in your county. On Page 11 of the 2026 Medicare & You handbook, Medicare says about Part C plans, “some plans may have a $0 premium and may help pay all or part of your Part B premium.”
That is Medicare’s own language. Options exist for your Part B premium. Medicare Part C plans are allowed to have a monthly premium as low as $0. Benefits and costs vary by county and plan.
Veterans with a penalty are still allowed to explore those same options. Here is the problem. The penalty stacks on top of everything. Whatever your county has for your Part B premium, the veteran who enrolled on time starts $60.87 or $101.45 a month ahead of you, every month, forever. The penalty does not go away because you found a good plan. It rides along.
Your VA benefits do not change either way. Medicare Advantage is not allowed to affect your VA health benefits in any way.
Three Veterans. Same VA Benefits. Three Decisions.
Veteran 1 enrolled in Part B on time. No penalty. Explored the Page 11 options in his county. Medicare Advantage working harder for him.
Veteran 2 thought the VA was enough. Delayed three years. Now pays $263.77 a month for life. And that is if the premium never goes up.
Veteran 3 delayed five years. Now pays $304.35 a month for life. Double whammy every time the premium increases.
Same VA benefits. Three different penalties. For life. Which veteran are you going to be?
If You Already Missed Your Window
If your Initial Enrollment Period has already closed, you generally enroll in Part B during the General Enrollment Period, January 1 through March 31 each year, and coverage starts the month after you sign up. The penalty is calculated from the months you were eligible and not enrolled. Enrolling sooner stops the clock. Every additional full year you wait adds another 10%.
If you had health coverage through your own or your spouse’s current employer after 65, you generally qualify for a Special Enrollment Period and the penalty does not apply for that time. VA health care alone does not qualify. Every situation is different. This is exactly the kind of thing we look at on the phone.
Medicare Part B Penalty Bottom Line
The Medicare Part B late enrollment penalty is 10% a year, for life, and VA health care does not protect you from it. Three years late costs $8,880 and counting. Five years late costs more than $12,000 in the first decade alone. The 7-month window around your 65th birthday is the only time the penalty is $0 forever. The window exists. Use it.
Jeff and I hear this every single day. Veterans who did not know. Veterans who got bad information. Veterans who are now paying penalties for the rest of their lives. Do not be one of them.
Inside Your Window? Call Before Anything Else.
We lay out the exact timeline of what happens before, during, and after your birthday month. If you already missed it, we show you how to stop the clock. Have your birth date and your ZIP code ready.Schedule a Free Call
Or call 888-960-VETS (8387)
Medicare rules allow us to provide all of our services free to veterans and we still make a living. No cost. No obligation. Not now. Not ever.
I wrote Medicare for Veterans: The Complete Field Guide. You can read it free at freevetsbook.com or grab a copy on Amazon.
Sources
- Medicare.gov, Part B late enrollment penalty: https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties
- Medicare.gov, When does Medicare coverage start (enrollment periods): https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start
- VA.gov, VA health care and other insurance: https://www.va.gov/resources/va-health-care-and-other-insurance
- Centers for Medicare & Medicaid Services, 2026 Medicare Parts A & B Premiums and Deductibles: https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
- 2026 Medicare & You handbook, Page 11: https://www.medicare.gov/publications/10050-medicare-and-you.pdf
Chris Duncan · Certified Medicare Insurance Planner™ · Retirement Income Certified Professional® · Licensed in all 50 states · Veterans Advantage Financial® · We Speak Veteran®
Benefits and costs vary by county and plan. Federal subsidy figures are approximate and based on the 2026 standard premium. This is general education, not personal advice. Always review your own situation with Social Security, the VA, Medicare, or a professional you trust before making changes.
We are not affiliated with or endorsed by Social Security, Medicare, the U.S. Department of Veterans Affairs, TRICARE, or any government agency. Nor would we want to be.