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 he/she is later found ineligible for State coverage
because he/she 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
his/her own account number. If the enrollee has applied for and is entitled to hospital
insurance benefits, his/her 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 his/her 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.