What does a lifetime penalty for late enrollment mean?

The Medicare Part B and Part D late enrollment penalties are lifetime penalties. 

The Medicare Part B penalty is an additional 10% per 12-month period that an individual was eligible for Part B coverage but did not enroll, on top of the monthly Part B premium. This additional penalty amount must be paid monthly for as long as the individual has Medicare Part B coverage. 

For example, if an individual was eligible for Medicare Part B but chose not to enroll in coverage for 2.5 years (30 months), they will have to pay an additional 20% (10% x 2, 12-month periods) on top of their monthly Part B premium for as long as they have Part B.

The Medicare Part D penalty is 1% of the national base beneficiary premium (a benchmark amount that changes annually) multiplied by the number of full, uncovered months that an individual was eligible for Medicare Part D but did not enroll or did not have creditable prescription drug coverage. This additional penalty (rounded to the nearest $0.10) must be paid monthly for as long as the individual has Medicare Part D coverage. 

For example, if an individual was eligible for Medicare Part D but chose not to enroll or did not have other creditable prescription drug coverage for 17 months, they will have to pay 17% (1% x 17 full, uncovered months) of the national base beneficiary premium. In 2022, this number was $33.37, so the penalty is $5.70 (17% x $33.37, rounded to the nearest $0.10) on top of their monthly Part D premium for as long as they have Part D.