Since the start of the Medicare program in 1966, the 50 states, the District of Columbia
(DC), and the U.S. territories have had the option to enter into agreements with the
Centers for Medicare & Medicaid Services (CMS) to enroll certain individuals who are
dually eligible for Medicare and Medicaid into Medicare and pay the premiums on their
behalf (known as “state buy-in”). See the CMS Manual
for State Payment of Medicare Premiums, chapter 1, sections 1.0 and 1.2.
For an individual who is determined eligible for, but not yet enrolled in Medicare,
state buy-in serves to enroll the individual in Medicare Part A and/or B and directs
the federal government to bill the state for the individual’s premiums. For an individual
who is already enrolled in Medicare, state buy-in enables the federal government to
bill the state for the individual’s Medicare premiums and stop collecting the premiums
from the individual through deductions from their monthly Social Security, Railroad
Retirement Board (RRB), or Civil Service Retirement benefits, or through CMS direct
premium billing (Form CMS-500).