TN 54 (02-23)

HI 01001.315 Changes in Method of Premium Payment

A. Policy Premium Deduction To Direct Payment

When an enrolled beneficiary's entitlement to Social Security or Railroad Retirement benefits is terminated for reasons other than death, continuance of Supplementary Medical Insurance (SMI) coverage (unlike Hospital Insurance) will not be affected by this termination. SMI coverage continues also for the person who was enrolled pursuant to a State buy-in agreement when the person is later found ineligible for State coverage because one no longer qualifies for money payments (or for medical assistance), and also for the person whose premiums can no longer be deducted from a civil service annuity.

In all these cases, the enrollee's premiums, formerly deducted from monthly benefits or paid by a State, must be paid by direct remittance. The program service center (PSC) will notify the beneficiary to explain the change. The enrollee is billed under the account number. If the enrollee has applied for and is entitled to hospital insurance benefits, SMI entitlement will be reflected under the new account number on the health insurance benefit award determination. If the enrollee does not apply for hospital insurance benefits or applies and does not qualify for hospital insurance, the field office sends a notice to the PSC to document the origin of the SMI entitlement as follows:


_____________(Name)_____ (New SSN)_____, enrolled for SMI and was formerly entitled to _______under SSN _______. Entitlement to such monthly benefits terminated effective ________ due to _________.


As soon as possible after termination of entitlement to monthly benefits, the person will be billed for premiums as an uninsured beneficiary. However, during the time between the termination of monthly benefits (premium deduction status) and the establishment of a direct billing record (under the enrollee's own account number), the SMI premium billing notices will be generated under the prior auxiliary number on which the enrollee had been receiving benefit payments. This method of billing has been initiated to preclude the accumulation of large premium arrearages pending the establishment of a direct billing record. When the SMI and/or hospital insurance claim file is established under the enrollee's own account number, the PSC cross-refers the records and initiates action to generate premium billing notices under the enrollee's own account number.

B. Policy Direct Payment`by Deduction of Premiums

When an enrolled uninsured beneficiary becomes entitled to monthly benefits under the Social Security Act, Railroad Retirement Act, or Civil Service Retirement Act, their SMI coverage continues. The premiums will be collected by deduction from such monthly benefit (unless premiums are paid by a State under a State buy-in agreement). The enrollee will be notified of the premium deduction, and of any adjustment of first check, which may be required because of advance payment or an arrearage of premiums.

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HI 01001.315 - Changes in Method of Premium Payment - 02/02/2023
Batch run: 02/02/2023