TN 34 (10-21)

HI 00815.042 Implications and Options for Beneficiaries When State Payment of Medicare Premiums (State Buy-in) Ends

A. Implications for Beneficiaries When State Buy-in Coverage Ends

A beneficiary's buy-in coverage period can end due to the following events:

  • Loss of eligibility in a coverage group;

  • Death;

  • Loss of entitlement to Medicare Premium-free Part A; and

  • Termination of buy-in agreement.

When a state ends buy-in because a beneficiary lost eligibility for a Medicaid category included in the state’s Part B buy-in coverage group , Medicare enrollment generally continues without interruption with the beneficiary assuming responsibility for paying the premiums.

  • If the beneficiary receives Social Security (Old Age, Survivors and Disability Insurance (OASDI), Railroad Retirement Board (RRB), or Civil Service Retirement benefits, the Social Security Administration (SSA) deducts the Part B premium amount from the beneficiary's monthly benefit payment

  • If the beneficiary’s monthly benefit amount is less than the Part B premium amount due, SSA applies the beneficiary’s monthly benefits to the total premium amount due and bills the beneficiary for the remaining balance of the premiums as described in SM 00850.475.

  • If the beneficiary does not receive Social Security, RRB, or Civil Service Retirement benefits, CMS sends a bill to the beneficiary for Medicare Part A and/or Part B premiums.

  1. 1. 

    Part A Premium Liability After Buy-in Ends

    Part A premiums paid under a Part A state buy-in agreement: SSA treats a beneficiary who loses buy-in as if they enrolled during the Initial Enrollment Period (IEP). Upon loss of buy-in, the beneficiary is responsible for Part A base premium amount even if they had been paying a late enrollment penalty prior to buy-in enrollment.

Part A premiums paid under a Part A group prayer arrangement:Upon loss of state payment of Part A premiums, the beneficiary becomes responsible for the premium amount the state paid ( i.e., the Medicare Part A premium may be subject to a late enrollment penalty if the state had been paying one).

  1. 2. 

    Part B Premium Liability After Buy-In Ends

Because all states, the District of Columbia, and certain U.S. territories pay the beneficiary’s Part B premium under a state buy-in agreement, SSA treats a beneficiary who loses Part B buy-in as if they enrolled during the IEP. The beneficiary pays the base premium, even if they had a late enrollment penalty before the state enrolled them in Part B buy-in.

After Part B buy-in coverage ends, SSA may deduct from the beneficiary’s monthly benefit payment up to three months’ worth of Part B premiums (current month plus two retroactive months). If the beneficiary does not receive a monthly benefit payment, CMS mails a bill, Medicare Premium Bill (Form CMS-500), to the beneficiary as described in HI 01001.030. If a beneficiary cannot afford to pay three months of Part B premiums at once, advise the beneficiary of their two options to obtain financial relief from retroactive billing of Part B premiums (see HI 00815.042C.).

 

B. Voluntary Withdrawal (Termination) From Medicare

When state buy-in coverage ends, SSA mails the beneficiary a notice of state buy-in termination (“buy-out notice”). The buy-out notice describes the option to withdraw from Medicare Part A and/or Part B.

  1. A. 

    If the beneficiary files a voluntary termination request within 30 days of the buy-out notice date, Medicare coverage ends the month buy-in has ended, avoiding beneficiary premium liability after buy-in coverage ends.

  2. B. 

     If the beneficiary files a voluntary termination request during the six months following the loss of buy-in coverage, Medicare coverage ends at the end of the month in which the beneficiary filed the notice.

  3. C. 

    C. If the beneficiary waits more than six months after buy-in coverage ends to file a voluntary terminations request, Medicare coverage ends at the end of the month after the month in which the beneficiary notifies SSA or CMS that they wish to withdraw.

Advise the beneficiary that he or she may have to wait to enroll and may be subject to a late enrollment penalty for the duration of entitlement to Part B coverage. See HI 00820.015B Termination of Premium-HI for the Aged, HI 00820.045 Voluntary Termination of SMI, HI 00820.060 Voluntary Termination Interview, and HI 00820.065 Tailoring Interview to the Individual Situation.

C. Options for Financial Relief from Retroactive Part B Premium Billing

As mentioned in HI 00815.042A, SSA may deduct from the beneficiary’s monthly benefit payment up to three months (current month plus two retroactive billing months) worth of Part B premiums when Part B buy-in coverage ends. If the beneficiary does not receive a monthly benefit payment, CMS bills the beneficiary directly. Advise beneficiaries they have two options to obtain financial relief from retroactive Part B premium billing.

  • Premium Waiver- Beneficiaries who believe they cannot afford to pay the retroactive premiums can request a premium waiver by submitting a Request for Waiver of Overpayment Recovery (Form SSA-632-BK).If SSA grants the waiver request and has already deducted retroactive Medicare premiums from the beneficiary's benefit payment, SSA refunds the waived amount to the beneficiary as described in HI 00830.015 Premium Waiver Determinations.

  • Installment Payments for Retroactive Premiums- Beneficiaries may request an installment plan from their local SSA field office if they indicate they cannot afford to pay the retroactive premiums in one lump sum and a waiver is not possible. Installment payments must be at least $15 per month. For more information about installment payments, see HI 00805.180 Payment of Premium Arrearage and HI 00830.060 Installment Payments for Retroactive Premiums.

D. Reenrollment After Termination Following Buy- In Coverage

Advise individuals whose Medicare coverage has terminated following a period of buy-in that they may reenroll for Medicare Part B during the General Enrollment Period (GEP).


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0600815042
HI 00815.042 - Implications and Options for Beneficiaries When State Payment of Medicare Premiums (State Buy-in) Ends - 10/12/2021
Batch run: 10/12/2021
Rev:10/12/2021