Most people know about Medicare, which is a government-sponsored health insurance program for aged individuals over 65 years old. What many don’t know is that people under 65 years old who receive Social Security Disability benefits for two years are also eligible for Medicare coverage, as well as those diagnosed with Lou Gehrig’s Disease or End Stage Renal Disease.
Medicare disability coverage for SSDI beneficiaries:
- Basics of Medicare
- Social Security Disability Insurance
- Applying for Medicare Disability Benefits
- Obstacles to Medicare Eligibility?
- Is Medicare Mandatory If I Receive SSDI Benefits?
- Medicare and Existing Medical Insurance
- Medicare and Medicaid Coverage
- Do I Have to Pay for Medicare Coverage?
- Medicare Coverage for Disability and Returning to Work
- What if I Have to Stop Working Again Because of My Disability?
- What is the difference in Medicare Part A, Part B, Part C, and Part D?
- Does Medicare for Disability Cover Long-Term Care?
- Reducing Out-of-Pocket Costs for Healthcare
- What is a Medigap Policy or a Medicare Supplement Policy?
- Applying for Social Security Disability and Medicare
Medicare is a government program that provides hospital and medical insurance to retirees over 65 years of age. Medicare is also provided to those who are disabled and receiving Social Security Disability Insurance payments for 24 months. People with permanent kidney failure (end-stage renal disease or “ESRD”) who receive maintenance dialysis or a kidney transplant, and those diagnosed with amyotrophic lateral sclerosis (Lou Gehrig’s disease), can also qualify for Medicare.
Basics of Medicare
“Original” Medicare is also known as Medicare Part A and Part B. Original Medicare is managed by the federal government and is a “fee-for-service” plan. Simply put, a medical service is performed by a health care provider, a fee is charged, and Medicare pays a portion of the fee– usually 80%. The Medicare beneficiary is responsible for the remaining 20% balance.
Medicare Part A
Medicare Part A, also called “Hospital Insurance,” does not require a monthly premium payment for most beneficiaries. Disabled individuals who have received SSDI payments for two years, and retirees at least 65 years of age who have paid FICA taxes for 40 quarters, are entitled to Part A Coverage. If a retiree paid fewer than 40 quarters of FICA taxes, Medicare Part A coverage can be purchased. There is also a yearly deductible for Part A.
Medicare Part A covers inpatient hospital stays or a skilled nursing facility following a hospital stay, like those offering rehabilitation services after major heart surgery. Medicare Part A also covers some home health care services (physical therapy, occupational therapy, or speech-language therapy) and hospice care.
Medicare Part B
Medicare Part B is a fee-for-service medical insurance that is available to Medicare Part A beneficiaries. There is a premium payment for Medicare Part B, and the premium amount increases for those with higher incomes. There is also a yearly deductible for Part B.
Part B covers doctor services, services from other health care providers, some home health care (not long-term care), durable medical equipment, and some preventive services. “Durable medical equipment” is a medically necessary device prescribed by a physician. Examples of durable medical equipment are oxygen, traction equipment, crutches, and powered scooters. Preventive services covered by Medicare Part B include bone density studies, diabetes screenings, flu, pneumonia shots, and others.
If you have End Stage Renal Disease (ESRD), you may have to enroll in Part B to receive full coverage for kidney dialysis, transplant, and equipment necessary to treat your renal disease.
Medicare Part C
Medicare Part C (Medicare Advantage) is similar to an HMO or PPO and includes all benefits and services covered under Part A and Part B. Some plans include Medicare prescription drug coverage (Medicare Part D) and other extra benefits and services. Premiums are charged by the private insurance companies offering Part C coverage, but the amount may be less than the Medicare Part B premium.
Medicare Part D
Medicare Part D (Medicare prescription drug coverage) helps cover the cost of prescription drugs. There is a time limit for applying for Medicare Part D and a penalty if you miss the initial enrollment period. Part D also has a separate premium payment, unless it is included with a Medicare Advantage Health Plan.
Social Security Disability Insurance
Medicare benefits are available to people not yet 65 years of age. In order to receive Medicare before retirement age, an individual must be found “disabled” by the Social Security Administration and receive Social Security Disability Insurance (SSDI) benefit payments for 24 months.
For Social Security purposes, “disabled” means (1) an individual has enough Social Security earnings to be “fully insured,” and (2) has a medical impairment that either prevents working for a period of 12 continuous months or is expected to result in death. Once a beneficiary receives SSDI benefits, coverage by Medicare is automatic beginning in the 25th month (after two years).
Applying for Medicare Disability Benefits
If you’re already receiving Social Security Disability Benefits (or took early retirement before age 65), no separate application is needed to apply for Medicare Part A and Part B. About 3 months prior to your receipt of the 24th SSDI payment, you’ll receive your Medicare card, showing your eligibility for Part A and Part B.
If you’re considering declining Part B coverage based on your existing coverage in a group health plan provided by a former employer or your spouse’s employer, you should seek professional advice. If your coverage ends, you may face a penalty for missing the initial enrollment period. In addition, you could be without insurance coverage for a time before Part B coverage begins if you wait for an open enrollment period.
Obstacles to Medicare Disability Eligibility?
The process of being found “disabled” by Social Security can be difficult and time-consuming, often requiring several appeals, hiring an attorney, and long waits for decisions. Medicare disability eligibility isn’t like that, though. If Social Security determines that your medical condition is disabling and you receive SSDI payments for 24 months, you’re automatically enrolled in Medicare.
Is Medicare Mandatory If I Receive SSDI Benefits?
Medicare coverage is not “mandatory” for those receiving SSDI payments, but you will receive “automatic” coverage that begins with the 25th disability payment. When you receive your Medicare card showing you’re eligible for Medicare coverage, you’ll be enrolled in Part A (hospital insurance) and Part B (medical insurance).
Medicare Part A is free for most SSDI beneficiaries and retirees. Only those who didn’t pay into Medicare for 40 quarters have to pay a premium for coverage under Part A. Medicare Part B requires premium payments that usually come out of monthly Social Security benefit payments.
What if you’re already covered by medical insurance through your former employer (COBRA), your spouse’s employer, TRICARE or some other private insurance plan? You can decline Part B if you’re already covered by a group health plan provided by a former employer or your spouse’s employer. However, if you don’t accept Part B during the initial enrollment period when you’re first eligible and you don’t fall into a special coverage category, you’ll have to pay a penalty each month. Also, you’ll have to wait for “open enrollment period,” usually in November each year, to sign up. Coverage for people who enrolled during an open enrollment period begins July 1st of the following year, which could result in a gap in your insurance coverage.
Medicare and Medicaid Coverage
Medicaid is a medical insurance program for individuals with limited income and resources. If you qualify for Supplemental Security Income based on a disabling medical condition, you’re likely also eligible for Medicaid. Each state administers Medicaid and has an allowable resource limit for coverage eligibility. Your state may require a separate application for Medicaid, however, when you qualify for Medicare, either through receiving SSDI for 24 months or reaching retirement age (65 years old), you won’t have to file a separate application for Medicare.
Medicaid covers more healthcare services, drug, and home health services than Medicare, so if you’re covered by both, most of your health care costs will likely be covered. Also, when services are provided, Medicare pays first, then Medicaid pays (a secondary payer).
Do I Have to Pay for Medicare Coverage?
Medicare Part A, which covers hospitalizations, is free to those who have been drawing Social Security Disability benefits for 24 months and to retirees unless they worked in a job that did not pay FICA taxes. In that case, they would not be “insured” for Medicare and would have to pay premiums for the benefit.
Medicare Part B, which is a medical insurance plan, requires payment of a monthly premium and the amount increases for high wage earners.
Medicare Part C plans are HMOs, PPOs, and private fee-for-service organizations, and cover those services usually covered under Parts A and B. Some Part C insurance programs include drug coverage (Part D). Premiums and included services for Medicare Part C plans depend on the insurance companies and their service areas.
Medicare Part D plans cover prescription drugs. These plans are offered by private insurance companies and the premiums vary. Some Part C HMOs or PPOs also include prescription drug coverage.
Medicare Coverage for Disability and Returning to Work
When you’ve received Social Security Disability Insurance benefits for 24 months, you’re eligible for Medicare Part A and Part B coverage. Medicare hospital insurance (Part A) and Medical Insurance (Part B) may allow you to obtain healthcare that improves your disabling medical condition. Social Security has programs that allow you to return to work while remaining eligible for SSDI payments and for Medicare coverage.
Social Security’s Ticket to Work is a special incentive program that allows disabled people to test their ability to work through a “trial work period” or TWP. The TWP is a 9-month period where SSA will not find a disabled person capable of performing substantial gainful activity (SGA) just because they’re trying to return to work. During the trial work period, the amount of earnings will not be counted as substantial gainful activity.
After the trial work period is complete, if the SSDI recipient is still working, they may be eligible for a 36-month Extended Period of Eligibility. The EPE allows a beneficiary to receive regular SSDI payments for any month during which wages fall below the substantial earnings amount.
If you’ve been disabled for two years and are a Medicare beneficiary, when you return to work, you remain eligible for Medicare for up to 8-1/2 years. In addition, Medicare may act as a secondary payer to your employer-offered health insurance.
To take advantage of these programs, you must contact enroll in the Ticket to Work program through your local Social Security office.
What if I Have to Stop Working Again Because of My Disability?
If your disabling medical condition prevents you from continuing to work, you’ll be eligible for reinstated Social Security Disability Insurance payments with no waiting period. You’ll also be covered for Medicare as well, with no break in coverage as long as you were eligible for Medicare before your return to work.
What is the difference in Medicare Part A, Part B, Part C, and Part D?
Medicare Part A is also known as “hospital insurance” and covers inpatient hospitalizations, durable medical equipment, and some preventive health care services. Medicare Part A coverage is automatic for retirees and for disabled individuals receiving Social Security Disability Insurance payments for two years. Medicare Part A is usually free.
Medicare Part B is “medical insurance.” You pay a premium payment (beginning in 2019, premium amounts depend on your income) that usually comes out of your Social Security benefit check. Part B is a “fee-for-service” insurance plan, covering 80% of allowed medical costs, and you’re responsible for the other 20%. Various “Medigap” insurance plans are available through private insurance companies that pay for health care costs not covered by Medicare.
Medicare Part C is “Medicare Advantage,” and offers the same coverage as Part A and Part B. Part C is similar to a PPO or HMO, where medical services are provided by a network of doctors, hospitals, and laboratories. The costs of Medicare Advantage vary, depending on the companies offering insurance in your area, but premiums are usually less than the Medicare Part B premium. There may be additional costs, including co-payments for office visits and additional charges for non-network services. You get all of your Part A and Part B coverage through the Medicare Advantage plan, and you must be enrolled in Part A and Part B to maintain your coverage. In some cases, prescription drug coverage is also included in the plan, but not all prescribed medications are covered by all plans. Be sure to check and compare services offered and costs before signing up for a Medicare Advantage plan.
Medicare Part D helps cover prescription drug costs for Medicare enrollees. Part D is optional, but you may have to pay a penalty if you decline this coverage and later decide to enroll. Some private insurers offer a Medicare Prescription Drug Plan (PDP), and some Medicare Advantage plans offer prescription drug coverage.
Does Medicare for Disability Cover Long-Term Care?
No, most long-term care is not covered by Medicare because it’s not considered “medical care.” Long-term care is usually “custodial care,” which is grooming, dressing, and carrying out normal activities of daily living. Medicare doesn’t pay for custodial care. However, if you require physical or occupational therapy, speech therapy, other skilled rehabilitation services, or services from a visiting nurse, those are covered by Medicare.
Reducing Out-of-Pocket Costs for Healthcare
There are a variety of measures Original Medicare beneficiaries can take to reduce out-of-pocket costs. The biggest savings comes from choosing medical providers who accept “assignment” for Medicare. These providers have agreed to be paid a specific amount set by Medicare. Once a provider accepts assignment for Medicare, the beneficiary cannot be charged more than the sum allowed by Medicare.
Another measure to reduce costs is to enroll in Medicare Part C, also called Medicare Advantage. Private insurance companies offer Medicare Advantage Plans, so the premiums and services offered vary according to the insurance company and your area of the country. If you live in a larger city, there may be a Medicare Advantage HMO available. The Medicare website (www.Medicare.gov) lets you compare plans that are offered in your city and state. Medicare Advantage plans have no premiums and even pay your Part B premium.
When comparing plans, don’t focus exclusively on the premium amount, compare yearly deductible amounts, as well as co-payments for doctors’ visits, and co-insurance amounts for lab tests and other medical services. Consider how frequently you need medical care and if you require treatment from a medical specialist, as these factors can significantly add to your out-of-pocket costs. The yearly limit on out-of-pocket costs for all medical services also varies by health plan, which can be a deciding factor when deciding whether to pay higher monthly premium costs.
If you decide to enroll in Medicare Part C, be sure to use network providers who have agreed to accept the network’s payment amount for their services. If you go outside your health plan’s network, even if the health care provider accepts assignment from Medicare, you may end up with a higher bill.
What is a Medicare Supplement Policy or “Medigap” Policy?
As the term indicates, “Medigap” policy, or Medicare Supplement Insurance Policy, covers out-of-pocket costs for Original Medicare beneficiaries, including deductibles, copayments, and coinsurance payments. Medigap policies do not cover prescription drugs. If you want a prescription drug plan, you must enroll in a separate Medicare Part D insurance plan or Medicare Advantage with prescription drug coverage. Medicare Advantage (Part C) does not allow payment of deductibles and copayments by a Medigap Policy, and it’s actually illegal for an insurance company to sell you a Medigap policy if you’ve enrolled in Medicare Advantage.
If you’re an Original Medicare beneficiary enrolled in Part A and Part B, and you travel to foreign countries, some Medicare Supplement insurance policies cover medical services for foreign travel. Some plans provide emergency health care coverage for foreign travel and others provide medical services and necessary medical supplies while you’re outside the United States.
A Medicare Supplement policy may offer more coverage than is provided by Medicare Part A or Part B. The services and premiums for Medigap policies vary according to insurance company and area of the country. The insurance company obtains your Part B information from Medicare and usually pays your doctor directly. Some health plans also bill for Part A services.
Applying for Social Security Disability and Medicare
Here at Acadia Disability, our experts can help you apply for Social Security Disability benefits, as well as answer any questions you may have regarding Medicare coverage. Receiving a favorable disability decision from Social Security often requires understanding complex rules and regulations, ordering and reviewing medical records, attending hearings, and making an argument that your medical impairment is disabling.
Once your disability claim is approved, and you’ve received SSDI payments for 24 months, you’ll automatically be enrolled in Original Medicare—Part A (hospital insurance) and Part B (medical insurance). You may find that Part C (Medicare Advantage) is a better fit for your medical and financial needs. The Medicare Advantage Plans available in your area may include a prescription drug plan (Part D) or you may require a separate drug plan.
Pursuing your Social Security Disability claim may seem overwhelming, especially when you have to cope with pain and the daily limitations imposed by your disability. Our attorneys specialize in Social Security disability claims and we have a great deal of experience dealing with the Social Security Administration. Our expert staff members can help you make the right decision for your situation, so you can take full advantage of your available benefits.