What Is Medicare Buy-In and How Does It Work?

Medicare is the federal health insurance program in the United States, providing coverage primarily for individuals aged 65 or older, along with younger people who have certain disabilities. While a significant portion of beneficiaries qualify for “premium-free” Medicare Part A, some individuals may need to “buy in” to secure this coverage. This situation arises when an individual does not meet the standard eligibility requirements through their work history.

Understanding Medicare Buy-In

Medicare has several parts: Part A covers hospital insurance, and Part B covers medical insurance. Medicare Part A helps pay for inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services. Part B helps cover medically necessary services like doctor visits, outpatient care, durable medical equipment, and preventive services. Most people receive Medicare Part A without paying a monthly premium, commonly referred to as “premium-free Part A.” This is generally earned by individuals who have worked and paid Medicare taxes for a sufficient period, typically 40 quarters or 10 years.

Medicare buy-in refers to the process where an individual pays a monthly premium to obtain Medicare Part A coverage because they do not meet the work history requirements for premium-free Part A. This contrasts with Medicare Part B, for which almost all beneficiaries pay a monthly premium. The concept of buy-in specifically applies to Original Medicare, which includes Part A and Part B, and is distinct from private insurance options like Medicare Advantage plans or Part D prescription drug plans.

Eligibility for Medicare Part A Buy-In

Eligibility for premium-free Medicare Part A is primarily determined by an individual’s work history and the associated payment of Medicare taxes. To qualify for premium-free Part A, individuals typically need to have accumulated 40 work credits, which translates to approximately 10 years of employment. Work credits are earned by paying Federal Insurance Contributions Act (FICA) taxes on earnings, with up to four credits obtainable per year.

Individuals who do not meet the 40-credit threshold may still be able to enroll in Medicare Part A by paying a monthly premium. Those with 30 to 39 work credits can pay a reduced monthly premium for Part A. If an individual has fewer than 30 work credits, they must pay the full monthly premium for Part A. The general criteria for those who must buy into Part A typically include being age 65 or older, a U.S. citizen or a legal resident who has resided in the U.S. for at least five years immediately before applying, and being enrolled in Medicare Part B. Certain individuals under age 65 with disabilities may also need to buy into Part A after their premium-free period ends, particularly if they no longer qualify for other benefits due to returning to work.

Enrollment Process for Medicare Buy-In

The enrollment process for Medicare Part A, especially when a premium is required, is primarily handled through the Social Security Administration (SSA). Individuals can apply for Medicare online via the SSA.gov website, by calling the SSA, or by visiting a local Social Security office. When applying, it is advisable to have necessary documents ready, such as proof of age, U.S. citizenship or legal residency, and work history records.

Most people first become eligible to enroll in Medicare during their Initial Enrollment Period (IEP). This is a seven-month window that begins three months before the month an individual turns 65, includes their birthday month, and extends for three months after. If this period is missed, individuals may have another opportunity to enroll during the General Enrollment Period (GEP), which runs annually from January 1 to March 31. Coverage for those enrolling during the GEP typically begins the month after they sign up. Certain specific situations, such as being covered by a group health plan through current employment, may qualify individuals for a Special Enrollment Period (SEP), allowing them to sign up outside of the IEP or GEP without penalty.

Medicare Buy-In Premiums and Other Costs

For individuals who need to buy into Medicare Part A, the monthly premium amounts depend on their work credit history. For 2025, the monthly premium for those with 30 to 39 work credits is $285. Individuals with fewer than 30 work credits face a higher monthly premium of $518 in 2025. These premiums are subject to change annually. Payments for these premiums are often deducted directly from Social Security benefits or Railroad Retirement Board benefits, or individuals may be direct billed.

In addition to the Part A premium, those who buy in will also pay the Medicare Part B premium. The standard monthly premium for Medicare Part B in 2025 is $185. However, some beneficiaries may pay a higher amount known as the Income-Related Monthly Adjustment Amount (IRMAA), which is based on their modified adjusted gross income reported on their IRS tax return from two years prior. For 2025, IRMAA can increase the Part B premium to a range between $259 and $628.90, depending on income brackets.

Delayed enrollment can lead to late enrollment penalties for both Part A and Part B. If an individual must pay a premium for Part A and delays enrollment, their monthly premium may increase by 10% for twice the number of years they delayed signing up. For Part B, delaying enrollment without qualifying for a Special Enrollment Period typically results in a 10% increase to the monthly premium for each full 12-month period enrollment was delayed, and this penalty is usually paid for as long as the individual has Part B coverage.

Medicare Savings Programs (MSPs) can provide assistance for low-income individuals to cover premiums. The Qualified Disabled Working Individual (QDWI) program, for instance, helps pay for the Part A premium for eligible working disabled individuals. Other MSPs like Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), and Qualifying Individual (QI) can help with Part B premiums and other costs, subject to income and asset limits.