The Medicare Buy-In Program: What It Is and How It Works

According to the Centers for Medicare & Medicaid Services (CMS), the Medicare buy-in program enables states to help more than 10 million Americans pay their monthly Medicare Part B premiums and more than 700,000 people pay their Part A premiums.

All states offer buy-in for Part B, but fewer states offer Part A buy-in. This is because the Part A premium is free for most people. The qualifications for Part A and Part B buy-in are different.

If you’re eligible for Medicare, you must enroll in Part A or Part B during set enrollment periods or else pay penalties. If you qualify for the buy-in program, however, these penalties and timeframes are waived.

The Medicare buy-in program is also connected to Medicaid eligibility for prescription drug assistance through a program known as Extra Help. We’ll discuss this additional program a bit later.

Is this program about Medicare eligibility age?

There can be confusion around what the term “Medicare buy-in program” means.

There are proposed rule changes to lower the eligibility age for Medicare to 50 to 64 years old, and some may refer to this as “Medicare buy-in.”

Here, though, we’re talking about the Part A and Part B buy-in program offered by states through Medicare savings programs (MSPs).

What are the Part A and Part B costs?

Medicare Part A is the first part of original Medicare. It covers hospital-related costs.

Most people will not have to pay a Part A premium. If you paid Medicare taxes for 40 quarters (or about 10 years) and qualify for Social Security or Railroad Retirement Board benefits, your Part A coverage is free. But if you worked fewer than 30 quarters, you’ll have a monthly premium of up to $471 for Part A in 2021.

For Part A, you’ll also pay a $1,484 deductible per benefit period in 2021. This amount applies to everyone who has Part A.

Medicare Part B is the second part of original Medicare. It covers medical and outpatient services.

Most people will pay a $148.50 monthly premium in 2021. This amount could be higher, depending on your income level.

On the other hand, if your income is below a certain level, you may be eligible to apply for an MSP. If you qualify, your premium will be paid by the state through the buy-in program.

The Part B deductible in 2021 is $203.

State buy-in programs help with premiums through the MSP eligibility process. These are federally funded programs that allow states to help pay premiums, deductibles, coinsurance, and other medical expenses for those with financial needs.

Most state Medicaid programs can enroll eligible individuals into the state buy-in program under the Supplementary Medical Insurance trust fund to cover premiums for people in any MSP or Medicaid program.

In some cases, you can qualify for both Medicare and Medicaid to help pay for different healthcare costs. This is known as dual eligibility, and more than 9 million Americans qualify for this status.

To be eligible for the Medicare buy-in program, you must qualify for one of the four MSPs described below.

The Medicare buy-in program uses the same financial resource limits as the Supplemental Security Income (SSI) program, but with different qualification amounts for income.

Eligibility and application rules vary by state. To qualify, individuals and couples must meet income and resource needs based on the federal poverty level and state guidelines for the MSPs.

If you’re eligible for SSI, you qualify for Medicaid. You can apply for an MSP if you don’t currently have Medicare parts A or B. You can also apply if you have Part A and need help with Part B premiums.

Once you qualify, you’ll be enrolled in parts A, B, and sometimes D. You may receive help with all or some premiums based on your need.

To find out whether you’re eligible for an MSP or other Social Security benefits, you can use the Social Security Administration’s benefit eligibility screening tool.

Checking your eligibility status

To find out whether you’re eligible for the buy-in program, you can:

• Call your state Medicaid office to ask about income and asset requirements for qualifying and what documents you need to apply.
• Contact your State Health Insurance Assistance Program (SHIP) to ask about eligibility requirements and how to apply.

Remember, you must be 65 years old or over to qualify for Medicare Part A, and you must meet other rules set by CMS.

Your state can enroll you in Part A and Part B if you qualify for an MSP. Each state has different eligibility criteria and levels of benefits offered, based on financial needs and state rules.

To apply for the MSP with Medicaid, it may be helpful to have the following documents handy:

• proof of income
• Medicare card
• Social Security card
• birth certificate
• proof of address

Once you apply and meet the requirements, states can automatically enroll you in the Part B buy-in program to help cover your premium.

If you enroll in Medicaid, SSI, or an MSP, you also automatically qualify for Extra Help. This is a program that helps you pay your Part D premium.

Part D is prescription drug coverage offered by Medicare. Extra Help removes the enrollment penalty for Part D if you didn’t apply when you were first eligible. However, you’ll still need to choose a Part D plan.

Once you apply, you’ll receive an eligibility notice of action within 45 days of filing your application. If you’re approved for an MSP, Medicaid will start paying your Part B premium immediately.

For the QMB program, benefits start the month after the notice of action. For the SLMB and QI programs, however, it may take several months for Social Security to reimburse you the $148.50 Part B premium through your Social Security check.

Tip

It’s important to be aware that MSP benefits must be recertified every year. Contact your Medicaid office to ask about recertification to avoid losing your benefits.

• The Medicare buy-in program allows states to help people with financial needs enroll in Medicare and pay their premiums (parts A, B, and D).
• This program allow states to enroll individuals immediately when they meet eligibility requirements, regardless of the standard Medicare enrollment periods.
• You won’t pay a penalty for late enrollment in parts A, B, or D if you qualify for an MSP.
• You’ll also automatically qualify for the Extra Help program if you enroll in an MSP, which will help you pay your Part D premium and prescription drug costs.

Medicare plan options and costs are subject to change each year.