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).

Each state and territory describe which Medicaid eligibility groups are eligible for state payment of Medicare premiums in their buy-in agreement with CMS. Effective January 1, 2023, all buy-in agreements are contained in the state or territory’s Medicaid State Plan filed with CMS. See the chart in HI 00815.006 for state buy-in coverage in the 50 States, DC and the three U.S. territories with buy-in agreements.

Buy-in agreements permit states and territories to directly enroll individuals covered under the buy-in agreement into Medicare Part A and Medicare Part B at any time, without regard for Medicare enrollment periods. States and territories pay the standard premium for individuals covered under state buy-in (i.e., states and territories do not pay a premium surcharge due to late enrollment that may otherwise have applied to an individual’s monthly premium amount).

An individual’s enrollment under a State Buy-in agreement is involuntary. States must enroll eligible individuals in buy-in even if they do not wish to enroll. A beneficiary cannot voluntarily terminate State Buy-in coverage.

All 50 states and DC have elected to enter into buy-in agreements to pay the Part B premiums for certain Medicaid beneficiaries who are Medicare-eligible. All states have selected one of two groups of Medicaid beneficiaries in their agreements (known as Part B buy-in coverage groups).

The following U.S territories have elected to enter into buy-in agreements to pay the Part B premiums for all Medicaid beneficiaries who are Medicare-eligible.

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  Guam;

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  The Commonwealth of the Northern Mariana Islands; and

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  U.S. Virgin Islands

The MSPs are not included in state buy-in agreements in these territories because no territory includes these Medicaid eligibility groups in their Medicaid programs.

All states must pay the Part A premiums for QMB-eligible individuals who do not have premium-free Part A. However, states can choose one of two methods to pay the Part A premium for QMBs -- either through their buy-in agreement or through a group payer arrangement.

Most states have expanded their buy-in agreements to also include the payment of Part A premiums for individuals who must pay a premium to enroll in Medicare Part A and who are eligible for the QMB eligibility group. These states are referred to as “Part A buy-in states.” States that do not include premium Part A for QMBs in their state buy-in agreements are referred to as “group payer states.” See HI 00815.021B.

For more information about the payment of Medicare Part A premiums for QMBs and a list of Part A buy-in and group payer states, see section HI 00801.140.