The Late-Enrollment Penalty That Never Goes Away
A retiree who thought his COBRA counted. It didn't.
A retiree who thought his COBRA counted. It didn't.
The situation
Tom retired at 66 and kept COBRA from his old employer for 18 months. When COBRA ended he tried to enroll in Medicare Part B — 20 months after his 65th birthday.
The mistake
COBRA is NOT creditable coverage for Medicare purposes. The Part B late-enrollment penalty is 10% for every 12 months you were eligible but not enrolled — for the rest of your life.
The cost
Tom's penalty: 10% of his Part B premium, permanently. On the 2026 standard premium of $202.90/month, that's an extra ~$243/year — every year for the rest of his life. Across 20 years, roughly $5,000, and it grows as the base premium does.
Plus Part D
Same story on prescription coverage. His Part D penalty is 1% per uncovered month — also for life. Combined lifetime cost of the delay: about $8,000.
Employer coverage past 65 is fine — if you get 'creditable coverage' in writing. COBRA doesn't count. Retiree health plans often don't count. Verify before your birthday, not after.
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