A group of lawmakers in Washington has introduced a bill that could reshape how late‐enrollment fees work for Medicare Part B, potentially helping roughly 700,000 seniors avoid excessive penalties.
Under the Medicare Economic Security Solutions Act, late penalties would be capped at 15 percent of the monthly premium, and the length of time that penalties apply would be limited.
In addition, seniors delayed in signing up because they had other credible coverage, such as COBRA, retiree plans, or Veterans Affairs benefits, would not face late‐enrollment fines at all.
Why This Bill Matters?
Currently, anyone who does not sign up for Medicare Part B during their initial enrollment window faces a penalty of 10 percent of the Part B premium for each full 12 months they delay.
Those fees are then added to their monthly premiums for as long as they have Part B—potentially years or decades. For many older adults, these penalties can amount to hundreds or even thousands of extra dollars over time.
For example, if a 70-year-old delays Part B enrollment by two years, their penalty would be 20 percent above the standard premium. That extra cost stays with them indefinitely.
Although Medicare rules allow for certain “special enrollment periods”—for instance, if a person is still covered by an employer’s group health plan—navigating these rules can be confusing, and not everyone knows of or qualifies for a late‐enrollment exception.
According to a 2023 estimate from the Centers for Medicare & Medicaid Services (CMS), nearly 700,000 individuals are currently paying Part B penalties because they did not enroll at the right time or believed their existing coverage was sufficient.
Those late fees can add $100 or more per month on top of the standard Part B premium of around $164.90 (for 2024), depending on the individual’s income bracket. Over a full year, that could translate into over $1,200 in extra costs—funds that many seniors on fixed incomes cannot spare.
Key Features of the Proposed Legislation
- Cap on Late Penalties
The bill proposes limiting the penalty to a flat 15 percent of the Part B premium, regardless of how many years a senior delayed enrollment. Under current law, penalties accumulate by 10 percent per full year of delay and last forever. Capping the penalty at 15 percent would prevent runaway costs. - Limit on Penalty Duration
Under the new proposal, any late‐enrollment penalty would apply for no more than 36 months. That means once a senior has paid three years’ worth of extra fees (even if they delayed enrollment by, say, 10 years), the penalty would stop. In contrast, today’s system forces individuals to pay the penalty each month for as long as they remain on Medicare Part B. - Exemptions for Those with Credible Coverage
Seniors who delayed Part B because they were covered through other plans—such as COBRA, an employer retiree health plan, or VA benefits—would not be penalized at all. Currently, people in these situations must understand and document their coverage gaps to avoid fines. The proposed bill removes that burden and automatically exempts anyone who can prove they had acceptable creditable coverage. - “Look-Back” Provision Simplified
To qualify for an exemption, individuals would only need to demonstrate they had “creditable” comparable health insurance—meaning coverage that meets or exceeds Medicare Part B standards—for each month they delayed. The legislation would streamline the process by instructing CMS to accept proof of COBRA, retiree coverage, or VA membership without requiring seniors to navigate complex paperwork. - Retroactive Relief for Certain Seniors
The bill includes language allowing seniors who are already paying high penalties, but who delayed enrollment because of valid coverage reasons, to apply for a refund of up to three years’ worth of penalty fees. In practice, that could mean thousands of dollars back in pocket for older Americans who were unaware of these rules.
Who’s Behind the Bill?
The legislation was introduced by Rep. Nikema Williams (D‐GA) on the House side and has bipartisan backing from both Democrats and Republicans, including Rep. Steve Womack (R‐AR) and Sen. John Cornyn (R‐TX). In the Senate, it is co‐sponsored by Sen. Sherrod Brown (D‐OH) and Sen. Shelley Moore Capito (R‐WV).
According to a press release from Rep. Williams’s office, lawmakers believe these changes would “simplify Medicare enrollment, reduce costs for older Americans, and recognize that many seniors already have quality health coverage.”
“Seniors should not be punished for making logical decisions about their health coverage based on what is available to them,” Rep. Williams said. She noted that the uncertainty around eligibility rules often leads to confusion and, ultimately, penalties. The newly introduced bill aims to “give peace of mind to millions who fear unexpected Medicare costs.”
Sen. Brown added: “This commonsense fix addresses a problem many of our seniors face. By limiting penalties to a reasonable level and acknowledging other credible coverage, we help older Americans keep their hard-earned money and get the care they deserve.”
How Does the Current Penalty System Work?
By law, anyone who does not enroll in Medicare Part B when first eligible generally pays a 10 percent penalty of the standard Part B monthly premium for each 12-month period they delay. These penalties continue for as long as the person has Part B coverage.
Most Americans become eligible for Medicare Part B when they turn 65, unless they qualify earlier due to disability. The initial enrollment period runs from three months before the month they turn 65 through the three months after.
If they miss that window, their next chance to enroll is during the general enrollment period (GEP), from January 1 to March 31 each year, with coverage starting July 1.
If a senior delays because they have creditable coverage—health insurance from a current employer with 20 or more employees—they may qualify for a special enrollment period (SEP) for up to eight months after losing that coverage.
The catch is that they must notify Social Security and provide proof of creditable coverage within 63 days of losing employer insurance. Failure to do so results in the same standard penalties. Unfortunately, many people either misunderstand the rules or miss the paperwork deadline.
For veterans enrolled in VA health care or those covered by certain retiree plans, fees can be avoided, but only if they actively apply for a special enrollment period and submit supporting documentation. The new bill would eliminate that documentation requirement, automatically exempting anyone who was covered under COBRA or VA without having to fill out additional forms.
Impact on Seniors and the Medicare Program
According to estimates from the Congressional Budget Office (CBO), roughly 700,000 seniors currently pay Medicare Part B late‐enrollment penalties, amounting to about $1,000 per person per year on average in excess premiums.
By capping penalties at 15 percent and shortening the duration to three years, the bill could reduce out‐of‐pocket costs by hundreds of millions of dollars over the next decade.
The CBO projects that, if passed, the changes would cost approximately $500 million over five years in foregone penalty revenue. However, advocates argue that the economic and social benefits outweigh the revenue loss because seniors would pay less and, therefore, have more disposable income to spend on rent, food, or prescription drugs.
AARP, which has championed Medicare reforms for older Americans, publicly endorsed the bill. “Too many seniors are penalized unfairly because they get lost in a maze of Medicare sign-up rules,” said AARP spokeswoman Paula Smith.
“Capping penalties and recognizing valid coverage will help older adults remain financially secure and make health care decisions without fear of surprise fees.”
Criticisms and Counterarguments
Not everyone is convinced the bill is perfect. Critics warn that reducing penalty revenues could increase the budget deficit slightly.
Currently, late‐enrollment fines help subsidize Medicare Part B costs for all beneficiaries. If fewer seniors pay those fees, either other beneficiaries must shoulder a slightly higher premium, or Congress must find new funding sources.
Representative Katie Porter (D‐CA), although supportive of penalty reform, warned that “we must ensure the overall financial stability of Medicare.
If we forgo too much penalty revenue, we risk shifting costs onto working families.” She suggested pairing penalty relief with measures that address overall Medicare solvency, such as reforming payment rates to doctors or reducing administrative waste in the program.
Similarly, some fiscal conservatives argue that penalties exist for a reason: to encourage timely enrollment and keep Medicare’s risk pool balanced. They caution that if penalties become too lenient, more people might procrastinate, leading to higher overall costs for Medicare due to delayed care and more expensive emergency treatments.
In response, supporters note that the cap of 15 percent is still a significant deterrent—ten percent per missed year remains a penalty, but isn’t punitive enough to punish someone for a decade of delay. The three-year duration also balances fairness with cost control: it encourages timely enrollment while recognizing that mistakes happen.
Timeline and What Comes Next
The House version of the bill was introduced in May 2025, and proponents hope to pass it before the end of the current congressional session. Meanwhile, a companion measure is winding its way through the Senate Health, Education, Labor & Pensions (HELP) Committee.
If both chambers pass their versions, differences will have to be reconciled in a conference committee. Given bipartisan support and strong lobbying from senior advocacy groups, backers believe the bill can clear both the House and Senate by late summer 2025.
An eventual signature by the President would formally enact the changes, with most provisions taking effect in 2026.
According to a staffer for Rep. Williams, the Democrats plan to hold committee hearings in June 2025, inviting testimony from Medicare beneficiaries who have paid excessive penalties and health policy experts. Republicans on the committee have expressed openness to the penalty cap, provided that any revenue shortfall is offset elsewhere in Medicare or Social Security.
AARP and other senior‐advocate groups have already begun a “Write Your Rep” campaign, urging constituents to call their members of Congress and request “quick passage” of the Medicare Economic Security Solutions Act. As the summer recess approaches, they are also organizing town halls in several key districts to keep the issue in public view.
Why This Change Matters for Young Adults and Families?
Although this bill directly targets seniors, it has implications for families and younger Americans as well:
- Parent Caregivers
Many younger adults are responsible for their parents’ well‐being, whether it’s helping with doctor appointments or managing bills. Limiting surprise Medicare fines means family caregivers will have more predictable budgets when assisting parents with medical costs. - Intergenerational Solidarity
When seniors spend less on penalties, they keep more of their fixed incomes. That extra money often goes into local economies, from grocery stores to pharmacies, benefiting younger people in the workforce. - Future Taxpayers
By addressing wasteful spending and unfair penalties now, policymakers demonstrate a commitment to making Medicare financially sustainable in the long run. A more solvent program reduces the likelihood that future generations will face steep tax increases to prop up Medicare. - Healthcare Behavior Signals
If the program is fairer to older adults, families will feel more confident that timely enrollment is a wise choice. When people witness a system working smoothly for their parents or grandparents, they’re more likely to plan for their coverage.
What Seniors Should Do Now?
In the months leading up to potential passage, seniors who are approaching age 65 or who currently hold employer or VA coverage should:
- Check Their Enrollment Status: Confirm whether they are already signed up for Part B or if they qualify for a special enrollment period.
- Gather Documentation: If they delayed Part B because of credible coverage, collect proof, such as COBRA statements, employer retiree plan records, or VA benefit letters. In the future, they may be able to use these documents to claim refunds under the new rules.
- Talk to a Benefits Counselor: Medicare.gov offers free State Health Insurance Assistance Programs (SHIPs) in every state. A SHIP counselor can explain current enrollment rules and, if the bill passes, help retirees navigate the new penalty structure.
- Contact Elected Representatives: If they support the bill, seniors can write, call, or email their U.S. House and Senate members to let them know how important it is to relieve harsh penalties.
Conclusion
If enacted, the Medicare Economic Security Solutions Act would bring significant relief to roughly 700,000 seniors who currently pay high late‐enrollment fees.
Capping penalties at 15 percent, limiting how long penalties apply, and exempting those with valid coverage strikes a balance between encouraging timely enrollment and acknowledging real-life circumstances.
Proponents—including Rep. Nikema Williams, Sen. Sherrod Brown, and senior advocacy groups like AARP—argue that these reforms would not only save older Americans hundreds of dollars per year, but also demonstrate a commitment to fairness in the U.S. healthcare system.
Critics worry about potential revenue losses for Medicare and the need to maintain program solvency, but the broadly bipartisan support suggests that a solution is within reach.
In the coming months, congressional hearings and grassroots advocacy will shape the bill’s final form. If the legislation clears both chambers and is signed into law, 2026 may mark the year when seniors stop worrying about crippling Part B penalties and instead focus on getting the care they need—without fear of surprise fees.