Every Part B enrollment notice Social Security mailed to the 200 beneficiaries a federal audit sampled listed one number clearly: the total monthly premium due. Not one of those 200 notices broke that total down to show how much of it was a late-enrollment penalty, or explained what a beneficiary could do about it. The gap turned up inside the same Social Security Administration Office of the Inspector General review that traced roughly $12 million in wrongly assessed Medicare penalties to processing mistakes — but the missing information stands as its own problem, separate from who was billed correctly and who was not.
What the Part B Enrollment Notice Actually Prints
The audit, report 072402, reviewed the notices Social Security sent to all 200 sampled beneficiaries who enrolled in Part B during the 2023 or 2024 General Enrollment Period. According to the report, the notices generally included the total Part B premium amount, but none of the 200 included the percentage or dollar amount of the penalty being charged, the number of months counted toward that penalty, the months credited for other qualifying health coverage, or the specific steps a beneficiary could take to reduce or eliminate it — including requesting a penalty reduction by supplying proof of qualifying coverage, which SSA policy allows at any time. A beneficiary who opens one of these notices sees a premium figure and a right to ask for reconsideration, with no printed way to check whether that figure is even correct. Social Security’s own internal policy calls for notices to be clear, brief and easy to read, and says that where possible a notice should spell out exact dollar amounts so a beneficiary does not have to do the math alone — a standard the report found the Part B enrollment notice did not meet on the one number that mattered most to the 200 sampled beneficiaries.
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Eight Refusal Notices, Zero Penalty Warnings
A second, related notice fared no better. Social Security also sends a Notice of Award to beneficiaries who decline Part B when they first become eligible. Of the 200 sampled files, 8 belonged to beneficiaries who initially refused Part B in 2023 or 2024 before later enrolling during a General Enrollment Period — and, per the full audit report, none of the eight Notices of Award those beneficiaries received when they refused explained that enrolling later could carry a penalty. Social Security’s own systems can generate that warning automatically, using a stored notice passage identified in agency policy as NL 00725.265, code HIB062, “Not Enrolling in SMI,” which spells out the 10-percent-per-year penalty and how a Special Enrollment Period can avoid it. But that language only triggers for beneficiaries who are under 65 years and 3 months old at the time they refuse — a threshold none of the eight sampled beneficiaries met, so none of them received it.
Why the Explanation Lives in a Phone Call, Not the Letter
Asked why the notices leave out these details, SSA subject-matter experts told auditors that employees cover the penalty math and enrollment rules verbally, during the in-person or telephone application process, rather than printing it in the notice itself. Beneficiaries who apply online have a narrower path to the same information: a “More Info” link inside the online application’s “Do You Want Medicare Part B?” section explains that most people who miss their Initial Enrollment Period can only sign up during the General Enrollment Period, that the penalty rises 10 percent for each full year of delay, and that people still working may qualify for penalty-free enrollment through a Special Enrollment Period — but a beneficiary has to click through to find it rather than reading it on the notice that actually states their bill.
A Second Missing Notice: The Extra Help Close-Out Letter
The audit found a related gap tied to a different notice entirely. Of the same 200 sampled beneficiaries, 29 were not screened for the Extra Help program, which helps pay Medicare drug costs and, because applying for it starts a parallel review for a state Medicare Savings Program, can eliminate a Part B late-enrollment penalty altogether if the state agrees to pay the beneficiary’s premium. Agency policy requires an LIS close-out notice whenever a beneficiary is not screened, but auditors found no evidence one was sent to any of the 29. Without it, those beneficiaries had no paper record telling them a state program might have erased the same penalty the enrollment notice never explained in the first place. Social Security told auditors it had begun rolling out a modernized screening prompt for a limited range of applications starting September 20, 2025, but the new prompt still does not remind employees to explain that an Extra Help application also opens a path to a Medicare Savings Program that could eliminate the Part B penalty entirely.
The Fix Nobody Has Been Ordered to Send Yet
Social Security’s three formal recommendations from the audit target the accounts and the processing systems behind the penalty calculation itself — not the notice language. “We also identified opportunities for SSA to improve how it communicates important enrollment information to beneficiaries,” said Michelle L. Anderson, Assistant Inspector General for Audit as First Assistant, in the agency’s April 2026 release on the findings. “Clear and complete information helps individuals make informed decisions and avoid unnecessary costs.” SSA agreed to correct the 23 sampled accounts it processed wrong and to update its enrollment systems, but neither its formal response nor the recommendations themselves commit the agency to rewriting what the Part B enrollment notice or the Notice of Award actually tells a beneficiary about the penalty on their bill. Anderson’s cover memo to Commissioner Frank Bisignano gave the agency 60 days to submit a corrective action plan addressing each recommendation — a deadline that covers the account corrections and the system changes, but not the notice language the report raised only as a communication opportunity, not a numbered recommendation.
The Medicare Surcharge Hidden Inside a Premium
Nothing in a Part B enrollment notice tells a beneficiary which of Social Security’s own coverage exceptions might reduce or erase the penalty printed into their premium, and no form arrives with the notice to start that request. A beneficiary is left to find the right paperwork on their own, months or years after the penalty was first applied.
The Medicare Cost & Coverage Protection Kit lays out the prior-authorization appeal steps and the new Part D out-of-pocket cap alongside 51 state Medicare cost-help packs.
See the prior-authorization appeal steps in The Medicare Cost & Coverage Protection Kit.
This article was researched and drafted with the assistance of AI and reviewed by an editor.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
