HI 01005.700 Law on Premium Penalty for Late Enrollment in Effect Prior to 7/86 -Historical Information

A. General

Until 7/86, an individual's HI premiums were increased by 10% for each 12-month period in which the individual could have been but was not enrolled for HI. The months counted were the elapsed months between the close of the Initial Enrollment Period (IEP) and the close of the enrollment period in which he or she enrolled PLUS, for those enrolling more than once, the elapsed months between termination of each coverage period and the close of each enrollment period in which the individual enrolled. Two changes in enrollment effective 4/1/81 affected the months counted in determining the increased premium for HI as well as for SMI. These are explained in HI 01001.010 A., C.8., and E., Example 6. As under current law, no premium increase was made for a period of less than 12 months. The IEP from which elapsed months was counted was the HI/IEP, and not the SMI/IEP. Thus, under no circumstances was any month before 9/73 (first month after the IGEP) counted. Similarly, no month was counted during which the individual was ineligible for Premium-HI because of eligibility for or entitlement to nonpremium-HI or because of ineligibility to enroll in SMI.

The first month for which a 10% HI premium increase was applicable was 7/75. Similarly, the 20% increase first became applicable in 7/76, etc. The following table shows the amounts of increased premiums and the earliest effective date for the increase indicated:

  10%   44.00. 49.00 59.40 69.30 75.90
  20%    54.00 64.80 75.60 82.80
  30%     70.20 81.90 89.70
  40%      88.20 96.60
  50%      103.50
  10% 85.80 97.90 124.30 170.50 191.40 235.40  
  20% 93.60106.80 135.60 186.00 208.80**256.80  
  30%101.40115.70 146.90 201.50 226.20**278.20  
  40%109.20124.60 158.20 217.00 243.60**299.60  
  50%117.00133.50 169.50 232.50 261.00**321.00  
  60%124.80142.40 180.80 248.00 278.40**342.40  
  70% 151.30 192.10 263.50 295.80**363.80  
  80%   203.40 279.00 313.20**385.20  
  90%  *214.70 294.50 330.60**406.60  
 100%   *310.00 348.00**428.00  
 110%    *365.40**449.40  
 120%     **470.80 

*The 90% surcharge did not become payable until 7/83, based on a 1983 GEP enrollment. The higher surcharges became payable as of the July after the effective date of the premium increase, based on enrollment during the GEP's of the respective calendar years.

**Effective with 7/86, when the 120% surcharge would have gone into effect, the law was amended so that the surcharge for late enrollment would never be more than 10% no matter how late the individual enrolled. Consequently, the only surcharge amount payable from 7/86 on is 10% of the base rate. All those who had been paying a surcharge higher than 10% were reduced to 10% ($235.40) as of 7/86. A further limitation on the surcharge is that no individual will pay the surcharge for more than twice the number of full 12-month periods during which he or she could have been but was not enrolled. Thus, some individuals had their surcharge eliminated as of 7/86. See HI 01005.010 for a full explanation of the surcharge rules in effect as of 7/86.

B. Examples of HI Premium Increases

  • Example 1:

Emmet George, born in 1901, was eligible to enroll in Premium-HI during the IGEP (12/1/72-8/1/73). However, he did not enroll until 3/74 during the 1974 GEP. He was not subject to a premium increase, since there were only 7 months in which he could have been but was not enrolled—9/73 (the month after the close of the IGEP) through 3/74 (the close of the GEP in which Mr. George actually enrolled). Had Mr. George waited until 3/75 to enroll in Premium-HI, his premium would have been increased by 10 percent, since there were 19 months, 9/73 through 3/75, between the close of his IEP and the close of the enrollment period in which he enrolled.

  • Example 2:

Nancy Gross, an uninsured U.S. citizen, was born 9/10/09; thus her IEP for purposes of enrolling in Premium-HI (and SMI) is a 7-month period running from 6/74 through 12/74. Ms. Gross enrolled in Premium-HI and SMI in 6/74, and her coverage became effective 9/74. Effective 2/28/75, her coverage was terminated for nonpayment of premiums. She reenrolled in HI and SMI during the 1977 GEP, and her premiums were increased 20 percent since there were 25 months in the period beginning with 3/75 (the first month after the month of termination) through 3/77 (the last month of the GEP in which Ms. Gross reenrolled).

  • Example 3:

Sheldon Long, a U.S. citizen who became age 65 on 10/20/73, first enrolled for Premium-HI and SMI during the 1975 GEP, which ended 14 months after the close of his IEP. Therefore, he was subject to a 10 percent premium increase. He voluntarily terminated his Premium-HI effective 12/31/75, but kept his SMI. In 2/77, during the 1977 GEP, he again enrolled for Premium-HI. The 15 months beginning 1/76 through 3/77 (the last month of the GEP in which Mr. Long reenrolled) are added to the 14 months which elapsed between the end of his IEP and the end of the GEP in which he first enrolled, making a total of 29 months to be counted in the determination of the premium increases. In these 29 months there are 2 full 12-month periods during which Mr. Long could have been but was not enrolled. Therefore, his Premium-HI coverage which began 7/77 was subject to a 20 percent premium increase. Since his SMI coverage did not terminate on 12/31/75 along with his Premium-HI coverage, he continued to pay SMI premiums at a 10 percent increased rate.

NOTE: In the above situations where a surcharge was applied, if the individual was still enrolled in Premium-HI as of 7/86, the Premium-HI surcharge would have been removed under the provisions of P.L. 99-272, as explained in HI 01005.010.

To Link to this section - Use this URL:
HI 01005.700 - Law on Premium Penalty for Late Enrollment in Effect Prior to 7/86 -Historical Information - 09/15/1989
Batch run: 01/27/2009