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.