TN 18 (09-01)

HI 01005.007 Reduced Hospital Insurance (HI) Premium

A. BACKGROUND

Under section 13508 of P.L. 103-66, individuals who are eligible for Premium-HI (i.e., are age 65 or over, but not insured for monthly title II (Social Security) benefits and/or premium-free HI, or are disabled and lose premium-free HI solely because of work) and have at least 30 quarters of coverage (QCs) are eligible for a reduction in the amount of their HI premium. In some cases, an individual whose spouse or former spouse has at least 30 QCs may also qualify for HI premium reduction (see HI 01005.007C.). The first month for which a reduced HI premium may apply is 1/94.

The amount of the reduction for months in 1994 was 25 percent. The amount of the reduction increased by 5 percent effective January of each year until the maximum reduction of 45 percent was reached in calendar year 1998.

B. POLICY--2001 REDUCED HI PREMIUM

The amount of the reduction for months in 2001 is 45 percent. The 45 percent reduction means that the reduced Part A premium in 2001 is $165.00.

C. POLICY--WHO IS ELIGIBLE FOR REDUCTION

In addition to a number holder (NH) with at least 30 QCs, the following individuals qualify for HI premium reduction:

  • A spouse who has been married to a NH with 30 or more QCs for at least 1 year;

  • A widow(er) who was married to a NH with 30 or more QCs for at least 1 year prior to the death of the NH; and

  • A divorced spouse (including a surviving divorced spouse) who was married to a NH for a period of at least 10 years immediately before the date the divorce became final if the NH had at least 30 QCs at the time of the divorce.

HI premium reduction applies to both aged and disabled Premium-HI enrollees as described in HI 00801.134 and HI 00801.170E.2.

NOTE: QCs, relationship, divorce, and date of death of a NH are determined in accordance with normal title II rules. Also the duration of marriage requirement for premium reductions for widow(er)s differs from the duration-of-marriage requirement for title II widow(er)s benefits.

D. POLICY--ELIGIBILITY FOR REDUCTION AFTER INITIAL ENTITLEMENT

Any individual who met the 30 QC requirement in HI 01005.007C. as of 1/94 and was entitled to Premium-HI in 12/93 had his/her HI premium reduced effective 1/94.

In addition, individuals who are or who become entitled to Premium-HI at the full premium amount will qualify for the reduction (but no earlier than 1/94) as follows:

  • A NH who acquires his/her 30th QC becomes subject to premium reduction effective with the month after the month in which the 30th QC is acquired;

  • A spouse of a NH who acquires his/her 30th QC after the spouse's entitlement to Premium-HI becomes subject to premium reduction effective with the month after the month in which the NH acquires his/her 30th QC;

  • A spouse who was entitled to Premium-HI prior to meeting the 1-year duration-of-marriage requirement to a NH with at least 30 QCs becomes subject to premium reduction effective with the month after the month the duration-of-marriage requirement is met.

E. POLICY--LOSS OF ELIGIBILITY FOR REDUCTION

If an individual paying a reduced HI premium as the spouse of a NH with at least 30 QCs is divorced from the NH before the 10-year duration-of-marriage requirement is met, the HI premium rate is increased to the full amount effective with the month the divorce becomes final.

NOTE: Remarriage of a widow(er) or divorced spouse does not end an individual's eligibility for a reduced HI premium.

F. POLICY--STATE BUY-IN INVOLVED

If an individual is paying a reduced HI premium and he/she becomes eligible for State payment of the HI premium as a qualified Medicare beneficiary (QMB) or qualified disabled and working individual (QDWI), the State pays the reduced premium amount.

G. EXAMPLES

1. Reduction After Initial Entitlement

Mary was entitled to Premium-HI beginning 4/95, the month she attained age 65. Since both she and her husband were uninsured and had less than 30 QCs, she had to pay the full HI premium. Her husband continued to work and acquired his 30th QC in the last quarter of 1995 (i.e., effective 10/1/95). Mary's HI premium is reduced by 30 percent beginning with 11/95.

2. Increase After Initial Entitlement

Tom, who has no QCs, was entitled to Premium-HI beginning 7/94, based on a general enrollment