Medicare Buy-In

Part A

The State will pay (Buy-In) the Medicare Part A premium for Qualified Medicare Beneficiaries (QMBs), who qualify for it only by paying a premium.

Part B

Buy-In refers to the arrangement through which the State Department of Health Care Services (DHCS) uses Medi-Cal funds to pay the monthly premiums of Medicare Part B for qualifying Medi-Cal recipients, including certain SSI/SSP recipients and ABD-MN individuals. This process ensures that Medicare shares a major portion of the recipient's medical expenses. By paying Medicare Part B premiums, DHCS obtains the maximum amount of federal money for the health care costs incurred by Medicare/Medi-Cal recipients. Buy-In is extremely important in reducing the State's total Medi-Cal costs.

Individuals Eligible for Buy-In

Individuals eligible for Medicare Part B and MC with no SOC or MC with SOC that has been met or are eligible for QMB/SLMB/QI-1 are entitled to State Buy-In.

Individuals Ineligible for Buy-In

Undocumented Non-citizens and medically indigent adults/children are not eligible for a Medicare Buy-In.

Individuals With SOC

Department of Health Care Services (DHCS) stopped paying Medicare Part B premiums for Medicare eligible MC recipients who have a Share-of-Cost (SOC) unless the SOC is met on a monthly basis effective April 1, 2011.

Individuals who have SOC will be eligible for the Part B buy in after the full SOC is met or certified.

Individuals who are ineligible for the state buy in of Part B premium may choose to continue receiving their Part B coverage by paying the monthly premium. Those who are receiving Social Security benefits will have their Part B premium deducted from their monthly checks.

Voluntary Disenrollment

Individuals with a SOC who want to voluntarily disenroll from Medicare Part B must contact the Social Security Administration to disenroll. Once disenrolled, the Medicare Part B premium must no longer be allowed as an income deduction.

Note: Disenrollment from Medicare Part B affects eligibility for Medicare Part D prescription drug coverage. Those who disenroll will end up paying for drug prescriptions since MC no longer covers prescription drugs for dually MC and Medicare eligibles (including those individuals who voluntarily disenroll).

Medicare Part B Enrollment Requirement

Individuals with a SOC are no longer required to apply for Medicare Part B as a condition of MC eligibility, unless the individual is also MSP eligible. This is due to the fact that regulations only require individuals to apply for other health coverage (including Medicare) when there is no cost involved to obtain it.

Income Deduction/Disregard

Individuals who are ineligible or were dropped from buy-in and continued to keep their Part B coverage by paying the monthly premium must be allowed the Part B premium as an income deduction in their MC budget when determining the SOC.

If allowing the Part B premium as an income deduction makes them eligible for the Aged and Disabled Federal Poverty Level (A&D FPL) program, the state will pay their premium for the month impacted retroactively. The client will be reimbursed for that month through their SSA benefit retroactively. Effective 12/1/2020, to avoid a "revolving door" scenario where the client flips between no-cost MC and MC with a SOC, counties must disregard income equal to the amount of the individual's current Medicare Part B premium amount when determining eligibility for the ABD FPL program, regardless of the state's payment of the premium. The new policy does not require the individual to pay for the premium when enrolled in or applying for the ABD FPL program. This income disregard is applied to the budget for as long as the individual's countable income remains within the ABD FPL program limits. Individuals in the Medically Needy program must still pay for the premium before applying the Medicare Part B premium deduction.

ExampleExampleIn March 2011, an aged client had a SOC of $90.00. The state stopped the buy in effective 4/1/11. The client received his reduced SSA check on 5/1/11. The client called the EW to report the change and provided verification of his SSA check showing a reduction due to Part B premium payment. The EW must revise the May MC budget allowing the current $96.40, Part B premium as an income deduction. After the deduction, the client is eligible for A&D FPL program which qualifies him for state buy in. Since the client is now eligible for zero SOC MC, the state will start initiating buy in again and to avoid the “revolving door” scenario, the amount of the Part B premium will now be considered a disregard from the client's countable income for the ABD FPL program.

Budgeting

The following policies apply only for individuals who have a SOC and are ineligible for QMB/SLMB/QI-1:

There is no requirement to check Part B buy in either on MEDS or with clients on a monthly basis.
The EW must not anticipate or predict that Part B buy in will be in effect. This includes individuals who are caught in the “revolving door.”
Whenever there is a “revolving door” impact on the client’s SOC, it is to the client’s advantage to continue to allow the Part B premium deduction in the budget as the end result will be the same, which is eligibility for buy-in.

If the client is not receiving the full SSA amount as shown on the Income and Eligibility Verification System (IEVS), the EW must not automatically assume that the client is paying Part B premium. Other deductions may possibly include Part C/D premiums, child support or overpayments. It is important that EWs carefully review the information on IEVS, verification provided by the client and/or confirm with the client to determine the types of deductions being taken from the client’s SSA check.

Intake

For new applications, the intake EW must no longer assume that Part B buy-in will take effect within two months from the date of approval for individuals with a SOC who are ineligible for QMB/SLMB/QI-1.

Continuing

As the EW becomes aware (e.g., client reported) that the client was dropped off from the Part B buy-in due to the state’s non payment of premium, the EW must revise the budget retroactively beginning the month the client’s SSA check is reduced.

Buy-In Procedures - Budgeting

Initiating Buy-In

To ensure statewide uniformity in establishing Buy-In and to eliminate related QC errors, the EW must initiate the Buy-In process.

The EW initiates Buy-In by entering the client's medicare information (including the MBI/HIC). Entering only the Medicare Premium does not initiate Buy-In. The payment method selected should correspond to the actual payment method applicable at the time the entry is made in CalSAWS.
Timeliness and accuracy in reporting the MBI/HIC number is essential, as late or erroneous reporting results in increased problems, customer complaints, and a possible loss of benefits.
It is crucial that Buy-In be accomplished quickly to avoid potential hardship. Clients who receive no RSDI or RR benefits must otherwise pay the cost of their Medicare Part B premiums to Social Security Administration.

Buy-In Effective Date

The EW must assume there is no break in Buy-In coverage when the recipient has had no break in Medi-Cal eligibility.

The EW must assume Buy-In and budget the gross RSDI amount in the following cases:

When a recipient changes Medi-Cal status from SSI/SSP to ABD-MN, unless there has been a discontinuance of Medi-Cal benefits for one month or more.
When changing aid codes within the MN category (i.e., 66 to 16).
When the individual changes county of residence (inter-county transfer).

Example #1 - The applicant signs the SAWS 1 and is approved for eligibility within the same month.Example #1 - The applicant signs the SAWS 1 and is approved for eligibility within the same month.If the customer signs the SAWS 1 in September and eligibility is authorized in CalWIN in September, Buy-In is anticipated in November. CalWIN will no longer allow the medicare premium in the December budget.

Example #2 - The date of approval is not within the first month of eligibility.Example #2 - The date of approval is not within the first month of eligibility.An applicant, over age 65 and currently eligible for Medicare, applies for MC in July and is not approved/authorized in CalSAWS until September (with begin effective date of July). Buy-In must be anticipated in November. CalSAWS will no longer allow the medicare premium in the December budget.

Premium Reimbursement

The recipient will receive a retroactive check/reimbursement to their direct deposit bank account for the Medicare premiums which he/she paid in the months covered by the Buy-In agreement.

Note: These SSA reimbursements for the Medicare premium are exempt as a lump sum RSDI payment but would be considered property in the month of receipt.

Verification

Buy-In must be verified (e.g., MEDS [INQB] screen, IEVS, etc.).

SOC Adjustment

The recipient is entitled to a SOC adjustment when Buy-In has been anticipated, yet did not occur.