If You Are Disabled, Here’s What You Need to Know About Medicare

May 17, 2021

Insight from Guest Columnist Asta Draksaite, Insurance Specialist

On July 30, 1965, President Lyndon B. Johnson signed into law legislation that established the Medicare and Medicaid programs. For 50 years, these government health insurance programs have been protecting the health and well-being of millions of American families, saving lives, and improving the economic security of our nation.

Eligibility & Waiting Periods.
While most people think of Medicare as a program for those over 65 years old, it also provides insurance protection for disabled Americans. If Social Security says you are eligible to receive disability insurance benefits under Social Security Disability Insurance (SSDI) — a program for individuals who have paid into the Social Security system — you will qualify for Medicare benefits, but you must wait two years from your date of entitlement to the cash benefit.

To know exactly when you can start receiving Medicare benefits, it is important to understand what “date of entitlement” means to the Social Security Administration (SSA). If you are applying for SSDI, Social Security requires a five-month waiting period, so your date of entitlement will be five months after the date of the onset of your disability. For example, if you became disabled on June 1 and you were approved for SSDI benefits in October, your date of entitlement would not be until November due to the five-month waiting period. This means your first disability check for November will arrive in December. You would then be eligible to join Medicare two years from November, your month of entitlement. It is also important to point out that, if you are like most applicants and had to endure a lengthy disability appeal process prior to being awarded disability benefits, you will probably have already met the five-month waiting period. (Note there are exceptions to the 24 month waiting period for individuals with end stage renal disease [ERSD] who generally qualify three months after a course of regular dialysis begins or after a kidney transplant and those with amyotrophic lateral sclerosis [ALS] who are eligible immediately upon collecting Social Security disability benefits.)

There is a second Social Security disability benefits program: Supplemental Security Income (SSI). SSI is a needs-based benefit program for individuals with little or no income and very limited assets. SSI recipients are not eligible for Medicare benefits, but most are eligible for benefits under the Medicaid program. Medicaid is a program administered by the individual states and eligibility rules vary from state to state. In Illinois, approval for SSI benefits does not automatically qualify you for Medicaid benefits. Illinois uses its own eligibility rules for Medicaid, which are different from the SSA’s rules and you must file a separate application for Medicaid with the Illinois Department of Human Services (DHS).

The ABC’s (and D’s and so on) of Medicare
Medicare is comprised of several different parts.

Part A covers hospital stays, hospice care and some skilled nursing care that you may need after being hospitalized if you require rehabilitation in a nursing home or other facility.

Part B covers doctor visits, lab tests, diagnostic screenings, medical equipment, ambulance transportation and other outpatient services.

Part C is known as Medicare Advantage. This is a private health insurance alternative to the federally run original Medicare. Advantage plans combine various parts of Medicare into one plan.

Part D pays for some of your prescription drug costs. You buy a Part D plan through a private insurer.

If you are under age 65 and approved for SSDI benefits, you will be automatically enrolled into Medicare Part A and B after the waiting period as outlined above. However, you will have an Initial Enrollment Period (IEP) when you may make decisions about your Medicare coverage. Your IEP is 7 months long. It includes your 25th month of disability, the 3 months before and the 3 months after. During your IEP you can choose a Medicare Advantage plan instead of Parts A & B.

But we’re not done with the alphabet just yet. There are also Medigap policies from private insurers that fill in the “gaps;” that is, they pay for certain medical expenses not covered by Medicare Parts A & B. These Medigap policies are labeled Parts G, K, L, M, and N with different coverage, benefits, and exceptions in each one, so you’ll need to review the plans to see which, if any, of the Medigap policies best suit your individual needs.

Being eligible for Medicare does not mean that it is free. The fact you were approved for SSDI makes you eligible for Medicare earlier than you otherwise would be (at age 65), but it doesn’t pay your premiums. If you receive SSDI, you will have to pay for Medicare premiums in most cases.

In Illinois, for free Medicare advice and one-on-one counseling, call 800-548-9034 or 217-524-4872 (TDD). This service is federally funded and not connected with any insurance company or health plan.

If you are struggling financially, you may qualify for Medicaid assistance in covering the costs Medicare won’t pay for, and possibly paying for your Part B. Another option: Individuals receiving SSDI benefits may be eligible for help from their states in paying for Medicare premiums. A good place to start looking for this kind of help is on Illinois’ Application for Benefit Eligibility website: https://abe.illinois.gov/abe/access/.

What if You Have Private Insurance from Your Employer?
When you qualify for Social Security disability benefits and Medicare, you can keep any insurance you already have, if you wish, and it will have no effect on your eligibility for SSDI or SSI benefits. Your current health insurance will either remain as your primary insurance or will become your secondary insurance behind Medicare or Medicaid. Primary insurance always pays your medical bills first and typically pays the largest portion. Secondary insurance pays all or some of the remaining unpaid medical bills.

It is usually the wisest strategy to keep your employer-provided insurance as your primary insurance if you can and let Medicare or Medicaid be your secondary insurer. Typically this will save you money because you won’t have to pay premiums for the full enrollment of all the Medicare Parts. If, however, your employer-provided insurance only qualifies as secondary insurance, you will probably be better off taking the full Social Security Medicare benefits.

To determine if your current insurance qualifies as primary or secondary to Medicare or Medicaid, ask the appropriate person at your workplace such as a supervisor or human resources manager.

Medicare eligibility opens new coverage possibilities, and at the same time creates challenges when navigating through the multiple options. Please feel free to contact me, Asta Draksaite from Benefits Age, an independent broker’s office, at adraksaite@benefitsage.com or at 847-397-5300 if you have any questions or need any assistance.