Identification Number:
HI 01001 TN 46
Intended Audience:See Transmittal Sheet
Originating Office:Centers for Medicare & Medicaid Services (CMS)
Title:Supplementary Medical Insurance
Type:POMS Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM
Part HI – Health Insurance
Chapter 010 – Premium Collections
Subchapter 01 – Supplementary Medical Insurance
Transmittal No. 46, 11/02/2022

Audience

PSC: BA, CA, CS, DS, ICDS, IES, ILPDS, IPDS, ISRA, PETE, RECONR, SCPS, TSA, TST;
OCO-OEIO: BET, BIES, CAQCR, CCRE, CR, EIE, ERE, PETL, RECONR;
OCO-ODO: BET, BTE, CCE, CR, CST, CTE, CTE TE, DEC, DES, PAS, PETE, PETL;
FO/TSC: CS, CS TII, CSR, CTE, DRT, FR, OA, OS, RR, TA, TSC-CSR;

Originating Component

CMS

Effective Date

Upon Receipt

Background

These revisions incorporate changes brought forth by the Consolidations Appropriations Act.

Summary of Changes

HI 01001.010 Premium Increase for Late Enrollment

Revised the section to support the legislative changes mandated in the Consolidated Appropriations Act 2021 (CAA).

HI 01001.010 Premium Increase for Late Enrollment

CITATIONS:

Section 1839(b) of the Social Security Act

A. Policy

1. Basic Principle

The Supplementary Medical Insurance (SMI) premium (Part B) is increased 10 percent for each full 12 months during which an individual could have been, but was not, enrolled in SMI.

2. Premium Increase (Also Known as Premium Surcharge or Late Enrollment Penalty)

The increased premium is always the premium payable increased by the applicable percentage for late enrollment. When the premium rate rises, the surcharge percentage remains the same, but the amount of the surcharge increases in proportion to the amount of the rise in the premium.

3. Premium Rollback

  1. a. 

    If a premium surcharge was in effect prior to attainment of age 65, the premium is rolled back to the standard (unincreased) premium effective with the month of attainment of age 65.

  2. b. 

    Months prior to age 65 are never counted in the calculation of a premium increase for late enrollment or reenrollment after age 65.

  3. c. 

    Prior to age 65, the months of non-enrollment are ignored in each separate period of Part A entitlement based on disability or End-Stage Renal Disease (ESRD) in the calculation of the surcharge for any later period of entitlement based on disability or ESRD.

4. Rounding

All premium amounts that are not an exact multiple of 10 cents are rounded to the nearest dime (5 cents-9 cents are rounded to the next higher dime).

B. Procedure

Treat countable and excludable months as shown below.

1. Count These Months

a. For Enrollments Prior to 1/1/2023:

  1. 1. 

    For an individual who is enrolling for the first time, count all the months elapsing after the end of the Initial Enrollment Period (IEP), through the end of the enrollment period during which enrollment occurred.

  2. 2. 

    For an individual who is reenrolling after termination of one or more periods of SMI coverage:

Add the total surcharge months from the first enrollment and add the months elapsing after the last day of each prior coverage period up to and including the last month of each enrollment period during which reenrollment took place. See HI 01001.010B.1.a.1.

EXCEPTION: Where the first enrollment or reenrollment occurred from 4/1/1981 through 9/30/1981, count the months after the end of the Initial Enrollment Period (or last month of prior SMI entitlement) through the month of enrollment.

b. For Enrollments On or After 1/1/2023:

  1. 1. 

    For an individual who is enrolling for the first time, count all the months elapsing after the end of the IEP through the end of the month in which the individual enrolls.

  2. 2. 

    For an individual who is reenrolling after termination of one or more periods of SMI coverage, add the total surcharge months from the first enrollment and add the months elapsing after the last day of each prior coverage period up to and through the end of the month in which the individual enrolls. See HI 01001.010B.1.a.1 or HI 01001.010B.1.b.1.

EXCEPTION: Where the first enrollment or reenrollment occurs pursuant to an Exceptional Conditions Special Enrollment Period (SEP) at HI 00805.380 - HI 00805.385, there is no applicable premium surcharge, also known as late enrollment penalty (LEP). However, if the individual fails to enroll or reenroll during the available Exceptional Conditions SEP, any months of non-coverage, including the months during the Exceptional Conditions SEP, would be taken into consideration for calculating the LEP.

NOTE: Under no circumstances will months in an IEP be counted in calculating the premium surcharge.

2. Exclude These Months

From the total months in HI 01001.010B.1., exclude:

  1. a. 

    The months 6/1966 through 9/1966, if enrollment occurred during those months by an individual whose IEP ended prior to 6/1966.

  2. b. 

    The months 1/1968 through 3/1968, if enrollment occurred in the period 10/1/1967 through 4/1/1968.

  3. c. 

    In "deemed IEP" cases (see HI 00805.150), exclude the months after the actual IEP through the end of the deemed IEP.

  4. d. 

    All months prior to the beginning of individual entitlement for those who have left the State buy-in rolls. Individuals who leave the State buy-in rolls for SMI are always treated, for premium surcharge purposes, as if they had enrolled in their IEP and maintained that enrollment.

    NOTE: States never pay a premium increase for late enrollment in SMI under State buy-in.

  5. e. 

    All months during which an individual was barred from enrollment prior to 1/1973. This applies to those enrolling for the first time after 1972 whose IEP ended in or before 1969, and those whose previous period of coverage ended in or before 1969. (The law in effect prior to the 1972 amendments prevented an individual from enrolling for the first time in SMI after the IEP unless he/she did so in a General Enrollment Period (GEP) that began no later than 3 years after the close of the IEP. Also, an individual whose SMI coverage ended could not reenroll unless he/she did so in a GEP that began no later than 3 years after the last day of SMI coverage.)

  6. f. 

    Months prior to 1/1978 for those who were entitled to CHAMPUS (now TRICARE, see HI 00805.325) in 1977 and:

    • became entitled to Part A as a disability or ESRD beneficiary, or

    • became entitled to Part A as a husband or widower when the Supreme Court declared the one-half support requirement for such benefits unconstitutional in 3/1977. (See HI 00805.720.)

  7. g. 

    Months prior to 7/1978 for those who were entitled to CHAMPVA benefits, and met either of the requirements in HI 01001.010B.2.f. (See HI 00805.725.)

  8. h. 

    Months prior to the first month after the end of the IEP established for ESRD beneficiaries who had refused SMI when they became entitled to Part A under the provisions that apply to the aged or the disabled and later developed ESRD. (See HI 00801.258C.)

  9. i. 

    Months elapsing after the end of the second enrollment in SMI and prior to 4/1981 for anyone who enrolled again in or after 4/1981 and had 2 enrollments (not counting State buy-in enrollments) in SMI prior to 1981.

  10. j. 

    Months beginning with 1/1983 during which the individual, age 65 or over, was covered under an employer group health plan through his/her own, or a spouse's, current employment status. (See HI 00805.740.)

  11. k. 

    Months beginning 1/1987 through 7/1993 during which a disability beneficiary was covered as an active individual in a large group health plan. (See HI 00805.752A. for an explanation of “active individual”.)

  12. l. 

    Months effective 1/1987 during which a disability beneficiary was covered under his/her own, or a spouse's, group health plan based on current employment status. (Effective for premiums due for 7/1990 on.) (See HI 00805.280.)

  13. m. 

    Months effective 8/1993 during which a disability beneficiary was covered under a large group health plan based on his/her own or a family member's current employment status. (See HI 00805.280.)

  14. n. 

    For premiums due 1/2007 and later, exclude all months the individual was serving as a volunteer outside of the United States for a tax-exempt organization and had health insurance that provided coverage while he/she was outside of the United States when the enrollee uses a Special Enrollment Period for international volunteers. (See HI 00805.365.)

C. References

Information on enrollment periods, HI 00805.010 - HI 00805.030, HI 00805.265, HI 00805.310, and HI 00805.350.


HI 01001 TN 46 - Supplementary Medical Insurance - 11/02/2022