About April 1977, the DoD was forced, due to a shortage of physicians, to reduce or eliminate medical services for military retirees and dependents at a number of military hospitals and installations. Many of these people, though eligible for SMI, had not enrolled because they could obtain free medical treatment at a base hospital.

When military medical care was curtailed, some individuals sought to enroll in SMI, but could not because the 1977 GEP expired before DoD announced the curtailment.

The Government's failure to notify these retirees and dependents of the impending curtailment of health services in time to enroll in the 1977 GEP resulted in severe hardship, potentially depriving them of health insurance for many months. This constituted a basis for equitable relief.

Military retirees or dependents who relied on military base hospitals for health care or medical services were treated essentially as if they had enrolled during the 1977 GEP, provided they enrolled before 7/78. Also, no months elapsing after the end of the 1977 GEP were counted in determining the premium for late filing under HI 01001.010.

SMI began the month the individual enrolled or, if they are paid the retroactive premiums, effective 7/77.