Medicare Part B While Living in the UK: The Late Enrollment Penalty and the Tax Side

Short answer

If you are a US citizen in the UK and you do not sign up for Medicare Part B when you are first eligible, you can face a permanent premium surcharge later. It adds 10% for every full 12 months you could have had Part B but did not. Living abroad on its own does not give you a special enrollment period. Whether to enroll is a personal healthcare decision. Its tax side shows up on your US return in a few places: the income test for higher premiums (IRMAA), medical expense deductions, and the way premiums are taken from Social Security.

Key points

• Your initial enrollment period runs for seven months around your 65th birthday.
• Miss it, and the next chance is usually the general enrollment period from 1 January to 31 March each year. Coverage then starts the month after you sign up.
• The penalty is 10% of the standard premium for each full 12-month gap. It normally lasts as long as you have Part B.
• The standard Part B premium for 2026 is $202.90 a month, with a $283 annual deductible. The 2027 figures are set by CMS each autumn.
• Higher earners pay IRMAA surcharges based on their US tax return from two years earlier. Income excluded under the foreign earned income exclusion still counts for that test.
• Medicare generally does not pay for treatment outside the United States.

Why this comes up for Americans in the UK

Most Americans in Britain use the NHS and may hold private medical insurance through work. Neither is Medicare, and neither is an American employer group health plan. Many people reach 65 in London, decide Part B is pointless while they live here, and only learn about the penalty when they plan a move back to the US.

That is a legitimate choice. Some people never intend to return, and paying a monthly premium for cover they cannot use abroad makes little sense for them. Others expect to retire in the US and would rather pay now than carry a surcharge for life. We do not advise on which way to go. TaxStone works on tax matters only, so our part is to make sure the tax side of whatever you decide is reported correctly.

How the penalty is worked out

Medicare counts the months between the end of your initial enrollment period and the date your Part B starts. Only full 12-month periods count. Someone who waits 38 months has three full periods, so they pay 30% on top of the standard premium for as long as they have Part B. Because the surcharge is a percentage of the standard premium in each year, the dollar amount rises when the premium rises.

Part A works differently. Most people who have 40 quarters of US work credits get premium-free Part A. If you are not sure you have enough, check before you assume. The US-UK Social Security agreement can combine UK and US records for Social Security retirement benefits, but it does not cover Medicare.

The special enrollment period question

People often ask whether living abroad counts as a reason to enroll late without penalty. In general it does not. The usual special enrollment period is for people covered by a group health plan through their own or their spouse's current employment. There are narrower special periods for some international volunteers and for certain exceptional situations. If you think one of those applies to you, the Social Security Administration and Medicare make that decision, not your tax preparer. The Federal Benefits Unit at the US Embassy in London is the official contact for Americans in the UK.

Where your tax return comes in

IRMAA. If your modified adjusted gross income is above the threshold, you pay an income-related monthly adjustment on top of the standard premium. For 2026 the first threshold is $109,000 for single filers and $218,000 for joint filers, measured on your 2024 return. The definition matters for expats. Income-related premiums use adjusted gross income worked out without the foreign earned income exclusion, plus tax-exempt interest. So a salary you excluded on Form 2555 can still push you into a higher premium. If your income has dropped because of retirement or another life-changing event, there is a process to ask Social Security to use a more recent year.

Medical expense deduction. Part B premiums count as medical expenses if you itemize. Only the total above 7.5% of adjusted gross income is deductible, so most people abroad get no benefit.

Self-employed health insurance. If you have net self-employment income, Medicare premiums can sometimes be deducted as self-employed health insurance, up to your net profit from the business.

Social Security withholding. If you take US Social Security, the Part B premium is usually deducted from the payment. Your Form SSA-1099 shows the gross benefit, and that gross figure is what goes on your return. Under Article 17(3) of the US-UK tax treaty, US Social Security paid to a UK resident is taxable only in the United States, so it does not go on your UK return as taxable income. That decides where the benefit is taxed. It does not change the Medicare rules.

A note on UK tax

Medicare premiums get no relief in the UK. If you pay US premiums out of UK income, there is nothing to claim on your Self Assessment return for them.

What we can help with

If the Part B decision is tied to a wider plan, such as a move back to the US, starting Social Security or drawing down a 401(k), we can prepare the US and UK returns for those years. We can also show how the income will appear for IRMAA purposes. Everything is done by email, so every figure and assumption is in writing.

Sources

• Medicare.gov, "Avoid late enrollment penalties" and "When does Medicare coverage start"
• CMS, 2026 Medicare Parts A and B premiums and deductibles fact sheet
• Social Security Act section 1839(i)(4) (definition of modified adjusted gross income for income-related premiums)
• SSA, Form SSA-44 (Medicare income-related monthly adjustment amount, life-changing event)
• IRS Publication 502, Medical and Dental Expenses
• US-UK Income Tax Treaty (2001), Article 17 (Pensions, Social Security, Annuities)
• US-UK Social Security (Totalization) Agreement, SSA overview