"Wait, there is a Medicare A penalty!?" 

As they say up in Minnesota, "oh you betcha!" Fortunately, most people are not at risk for receiving this penalty, and those that are can often do some work to get out of it.

So what is the Medicare Part A penalty and who will be affected by it? Well, before we dive into that let's relieve some of your fears by explaining who isn't at risk. 

Who Will Not Be Penalized for Part A? 

As you work, you pay payroll taxes or FICA taxes, part of which goes into Social Security, and part of which goes into Medicare. Anyone who has paid 40 quarters (10 years of work) into Medicare will never be penalized for Medicare Part A. The good news is that most of you have paid at least 40 quarters (probably much more) into Medicare, meaning you will never have to pay the Part A penalty (regardless of when you enroll in Medicare) and will not have to pay any Part A monthly premiums at all.

Who Will Be Penalized for Part A?

Anyone who has not paid at least 40 quarters (or 10 years of work) into Medicare could be subject to Medicare Part A penalties. 

Monthly Premiums

If you have not worked 40 quarters, which is around 10 years of work, then you will be slapped with the Part A penalty. If you have no work record and have never paid FICA taxes then you will be charged $450 per month in order to have Medicare Part A (remember part A is otherwise free). This penalty will also be assessed to anyone with a work history of less than 30 quarters.

If you have worked between 30-39 quarters then your penalty will be less. In this case you will be charged $252 per month for your Part A coverage. 

Percentage Penalties

The other Medicare Part A penalty affecting those who have not paid into Medicare for 40 quarters are percentage penalties. If someone who has not paid into Medicare for the required 40 quarters fails to enroll in Medicare when they turn 65 or retire, they will have a 10 percent penalty added to their monthly premium for every year they did not enroll. In other words, if you’re 65 or retired and wait to enroll in Medicare for one whole year, you will pay an extra 10 percent (based on your monthly premium amount) for the next two years. If you go without Medicare for two years, you will pay a 20 percent penalty (again based on your monthly premium) for the next four years. 

But once again, this penalty only applies to those who have not paid any FICA taxes for at least 40 quarters. If you’ve paid in for 40 quarters (which is around 10 years), you can enroll in Part A whenever you want, and never have to worry about penalties. 

How to Avoid Medicare Part A Penalties 

So what happens if you haven’t paid into Medicare for at least 40 quarters? Is there any way to avoid paying the penalties? Glad you asked! There is, in fact, one way to avoid Part A penalties. You have to reach that 40 quarters requirement. How can you do that? There are two ways. 

Draw From a Spouse

The first way to reach that 40 quarters requirement is to draw from a spouse. If you're married to someone presently (and have been married to them for one year) who is at least 62 years old and has paid into Medicare for 40 quarters, you can draw from their benefits. 

Now, if you're no longer married, there are still a few ways to draw from an ex-spouse. If you were married for at least 10 years, they are at least 62 years old, have 40 quarters, and you did not remarry prior to the age of 60, then you can actually go to that previous spouse and draw your Medicare benefits from them. 

Go Back to Work

The other way to reach your 40 quarters requirement is to simply go back to work. In fact, we had this happen recently. A lady who had 36 quarters wanted to get on Medicare Part A. She was no longer married and her marriage only lasted for six years, so she wasn’t eligible to draw from her ex-spouse. We encouraged her to go back to work so she could reach the 40 quarters and avoid the Part A penalties, which is what she decided to do. 

And the great news is, you don’t have to work a full three months to get one quarter. Here’s how it works: The minimum amount of money for one quarter is $1,410 of taxable income. If you make this amount, it counts as one quarter. So all you have to do is figure out how many quarters you still need to reach your 40 quarters goal, then multiply that number by $1,410. The one caveat here is that you can only accrue 4 quarters each year. So if you are lucky enough to earn $5,640/month then you only need to work one month to achieve your 4 quarters. 

Do You Have to Enroll In Part A?

The last question we’re going to look at is this: do you have to enroll in Medicare Part A when you turn 65? The answer depends on a few things. 

If you and your spouse are retired and are no longer working, you do indeed have to enroll in Medicare Part A and B when you turn 65. 

If, on the other hand, you or your spouse are still working then you do not have to enroll in Medicare Part A and B when you turn 65. In fact, enrolling into Medicare Part A while you are still working can actually come with some consequences.

HSA Contributions

The first consequence you’ll encounter if you choose to enroll into Medicare Part A while still working is that you will no longer be able to make contributions to your an HSA account. Your HSA money will still be yours to use, you just won’t be able to add to it any longer. So if you have an HSA account and enjoy the tax perks that come along with it you may want to delay starting Medicare Part A. 

Medicare Advantage Trial Period

The second consequence for enrolling in Medicare Part A while you’re still working is for those of you who want to enroll in a Medicare Advantage plan. Medicare Advantage plans come with a 12-month trial period. During this 12-month period you can switch over to a Supplemental plan without having to medically qualify or go through underwriting. In other words, if you’re still in that first 12 months and decide to switch to a Supplemental plan, the insurance company has to take you, no questions asked. 

Unfortunately, the Advantage plan 12-month trial period begins on the day you start Medicare Part A. This means you could waste your free 12 month trial period while you are still working. In this case once you retire you may still choose an Advantage plan, you just don't have the opportunity to switch out of it without undergoing medical underwriting. 

Now, if you were to ask the Social Security office or Medicare if you should get on Part A while you’re still working, they would say yes. They always advise people to get on Medicare Part A because it’s free (thanks to the 40 quarters you or your spouse paid into Medicare). But the problem is, they fail to mention the drawbacks and consequences that come with enrolling in Part A while you’re still working. And remember, if you’ve paid into Medicare for 40 quarters, you can enroll any time you want without fear of penalties, so we usually suggest waiting to enroll until you’re retired. 


If you’ve paid into Medicare for at least 40 quarters (10 years’ worth of work), you do not ever have to worry about Part A penalties or monthly premiums. Medicare Part A will be completely free to you, no matter what time you enroll. If you haven’t paid at least 40 quarters into Medicare, you may be penalized by paying monthly premiums and having a percentage-based penalty added to your premium if you enroll late. You can avoid these penalties by either drawing on a spouse’s 40 quarters or going back to work and acquiring them yourself. 

Anyone who is 65 and is not working (and their spouse is not working) has to enroll in Medicare Part A and B. While you can enroll in Medicare Part A if you’re still working and turn 65, there are some consequences for doing so, and we typically suggest waiting to enroll until you’ve retired.

If you aren't sure if you have 40 quarters, or if you want advice on when to begin Medicare Part A, our Medicare School Guides would be happy to help. They are experts on topics like these and can get you on the right path in no time. To schedule a free phone appointment click here or call us at (800) 864-8890.



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