Are you referring to the penalty premium rate for not enrolling in Medicare during your Initial Enrollment Period? Please see this Medicare webpage for more information about penalty rates and Part D.
Even thought it's called a "penalty", it's just a higher rate for your medical insurance. Medical insurance premiums are deductible if you itemize your deductions and if your total medical expenses exceed 7.5% of your Adjusted Gross Income.
See IRS Publication 502 for more information about medical expenses.
See also this TurboTax tips article for more information.
It’s important to sign up for Medicare coverage during your Initial Enrollment Period, unless you have other coverage that’s similar in value to Medicare (like from an employer). If you don’t, you may have to pay an extra amount, called a late enrollment penalty.
Late enrollment penalties:
- Are added to your monthly premium.
- Are not a one-time late fee.
- Are usually charged for as long as you have that type of coverage (for most people, that’s a lifetime penalty). The Part A penalty is different.
- Go up the longer you wait to sign up – they’re based on how long you go without coverage similar to Medicare.
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