SSR 75-9: Sections 217(a) and 226(e)-(f) (42 U.S.C. 417(a) and 426(e)-(f))—Hospital Insurance Benefits—Chronic Renal Disease—Use of Deemed Wages to Establish Fully Insured Status—Effect of Benefit from Other Federal Agency on Hospital Insurance Entitlement
20 CFR 404.1301(a) and 405.104(a) and (b)
Where use of section 217 "deemed wages" based on active military service during World War II is necessary to establish fully insured status for purposes of entitlement to hospital insurance benefits on the basis of chronic renal disease under section 226, held, their use is not precluded by the language in section 217 and such "deemed wages" may be used in determining insured status for Medicare; further held, where benefit is determined to be payable to individual by U.S. agency or instrumentality on basis of the same active military service which has enabled individual to be deemed to have received wages under section 217(a) and receive insured status for purposes of Medicare eligibility, redetermination with respect to individual's insured status for purposes of determining whether Medicare eligibility may continue, would not be required by section 217(a)(1)(B) of the Act.
R, the wage earner, has chronic renal disease and has been receiving hemodialysis on a regular basis since June 1973. In order to be "deemed disabled" under section 226(e)(2) for purposes of eligibility to hospital insurance on the basis of chronic renal disease, an individual must be inter alia:
"(A) . . . fully or currently insured (as such terms are defined in section 214 of [the] Act), or (B) . . . entitled to monthly insurance benefits under title II of [the] Act, or (C) . . . the spouse or dependent child (as defined in regulations) of an individual who is fully or currently insured,or (D) . . . the spouse or dependent child (as defined in regulations) of an individual entitled to monthly insurance benefits under title II of [the] Act . . ."
The only means by which the subject wage earner could meet the above requirement is by being fully insured as defined in section 214. Section 214(a) provides that an individual would be "fully insured" if he has acquired within the prescribed time a specified number of quarters of coverage. The wage earner had only a few quarters of coverage since most of his employment had been under civil service and he could meet the fully insured status requirement only by using his military service wage credits for World War II service. Section 214, however, makes no reference to section 217, or to any wages which may be deemed under that section by virtue of active military service. Section 217(a)(1) provides, as here pertinent, that wages may be deemed "[for] purposes of determining entitlement to and the amount of any monthly benefit for any month after August 1950. . . ." (Emphasis supplied.) Thus, by referring only to monthly benefits, section 217 would appear to preclude the use of "deemed" wages for purposes of the insured status requirement of Medicare-Chronic Renal Disease.
While section 217 could arguably be construed in this restrictive manner, a contrary interpretation would be just as reasonable. The only manner in which "deemed" wages might possibly affect an individual's entitlement to monthly benefits would be by enabling him to receive additional quarters of coverage and to attain an insured status, which is, of course, an eligibility requirement for monthly benefits. It is quite likely, therefore, that Congress in drafting section 217, was not intending to limit the use of deemed wages, e.g., by precluding their application here, so much as to designate in general terms how such wages might be applied. Indeed, until the enactment of section 226(e) in October 1972 insured status determinations were only necessary for determining entitlement to monthly benefits and to a disability freeze under section 216(i).
Further, there is no indication in the language or legislative history of section 226(e) that Congress intended to recreate a different test for Medicare insured status determinations than for cash benefits insured status determination. In devising the eligibility requirements for Medicare-Chronic Renal Disease, Congress depended heavily on basic title II entitlement concepts and in almost every case left those concepts unchanged. Accordingly, on the basis of the foregoing, the language in section 217, "for purposes of entitlement to monthly benefits," may reasonably be viewed as providing deemed wages generally for purposes of title II insured status determines, including those required by section 226(e) and the wage earner's World War II military service wage credits may be used to establish entitlement to hospital insurance under this section.
An additional issue is raised by the wage earner's meeting fully insured status through the use of military service credits. If, after entitlement to hospital insurance is established, it is determined that a benefit based on World War II military service is payable to the wage earner by an agency or instrumentality of the United States, does section 217(a)(1)(B) require a redetermination of insured status, and, possibly as a consequence, the termination of Medicare-Chronic Renal Disease coverage?
It appears that clause (B) of Section 217(a)(1) was drafted to prevent an individual from receiving two Federal periodic cash benefits on the basis of the same World War II military service. Such clause specifically limits its own applicability to cases involving a monthly benefit or a lump-sum death benefit. Thus, even though an individual is entitled to a benefit from another U.S. agency or instrumentality, he may still be deemed to have wages for purposes of the insured status requirement for a period of disability under section 216(i)(3). See the last sentence of clause (B).
Furthermore, if clause (B) were interpreted to require a determination for purposes of continuing Medicare eligibility, the effect for the beneficiary would likely be far more severe than the mere substitution of one cash benefit for another. The Medicare coverage might be terminated in the midst of a course of dialysis or in the postoperative stages of a renal transplant. In section 226(f), Congress prescribed that Medicare-Chronic Renal Disease would terminate only with the occurrence of events which are directly related to an individual's need for treatment for chronic renal disease. If an individual (once entitled) fails to meet eligibility requirements in section 226(e) which are not related to that condition, he nevertheless may continue to be eligible for Medicare coverage. The application of provisions of section 217(a)(1)(B) for Medicare purposes would be a substantial digression from what appears to be the Congressional intent. Accordingly, the recomputation of an individual's insured status for purposes of determining whether he may continue to be eligible for Medicare on the base of chronic renal disease would not be required by section 217(a)(1)(B) of the Act.