Newly disabled adults face innumerable challenges, not the least of which is securing affordable health insurance coverage. After waiting months to begin receiving cash benefits from the Social Security Disability Insurance (SSDI) program, they must wait an additional two years to begin receiving Medicare benefits. We recently spoke with Gina Livermore, Ph.D., of Mathematica Policy Research who, with Commonwealth Fund support, is studying the impact of Medicare's waiting period on people with disabilities, and the struggles they encounter as they must navigate the maze of SSDI and Medicare while trying to obtain the health care they need.
Can you outline for us the process disabled people must undergo to obtain Social Security Disability Insurance (SSDI) and Medicare?
Gina Livermore: Generally, to apply for SSDI, individuals must prove they meet very complicated medical criteria that show they can't work at a substantial level. The condition has to be very severe: you must establish that you can't engage in work and that your condition is going to last for at least a year or result in death.
The average wait time from application for SSDI benefits to approval or rejection is about three months. For people with some conditions, it may take longer than that. If you have a back injury, for instance, it's much more difficult, because they've got to determine that you can't do some other kind of work. If you're rejected, then you can appeal—and that can take a year or more.
Disabled people are eligible for Medicare, but they must wait for Medicare benefits until 24 months from their date of disability. This means that at a time when they are particularly in need of appropriate health care, they must find other ways of paying for that care. Many disabled people are able to obtain coverage through their own former employer, a spouse's employer, or Medicaid, but about 20 percent of them are uninsured during this period.
Can you characterize the status of disabled people who are in the process of applying for SSDI in terms of their health and access to care?
Livermore: We looked at people in the three one-year periods before entry into SSDI and three one-year periods after. Even at three years before becoming eligible for SSDI benefits, a large percentage—about 40 percent—already had limitations in their daily activities. They are clearly sicker than the general population, with greater health care needs. Not surprisingly, their health status deteriorates by every measure available in our data after they become disabled, with an average of 22 doctor visits in the first year of SSDI eligibility—more than five times the rate among the general working-age population—and 7 hospital days—about 17 times as many as among the general working-age population. Also, 13 percent of disabled people die during the first 24 months after SSDI eligibility.
In terms of insurance, we were surprised to see that, even before people get into the program, a large share were uninsured, and this continues throughout the entire period we studied. So, there's this core group that doesn't have insurance to help them deal with their high health care needs. As a result, 21 percent of the SSDI beneficiaries we studied reported that they had delayed medical care due to cost.\
What other changes did you notice after people began receiving SSDI?
Livermore: The rate of poverty more than doubles after disability—it goes from about 10 percent, which is close to the national average for working-age people, in the year before SSDI up to more than 20 percent in the first year after. These individuals are not working, and SSDI, for many people, won't get you above the poverty level, especially if you had a low-wage job before. Ironically, many others who receive higher SSDI payments have the opposite problem—they lose their Medicaid eligibility because their total income exceeds the threshold for that program.
What are the implications, in terms of cost, of eliminating the Medicare waiting period?
Livermore: We estimated that making every person eligible for Medicare at the same time they become eligible for SSDI benefits would cost about $16 billion annually. But there are some savings that accrue because a lot of people are covered by Medicaid during this period. We found that proportion to be 25 percent, but other studies have estimated it to be as high as 40 percent, which would mean several billion dollars in savings, shared between the states and the federal government. That still means a lot of additional federal spending, but these are people who are particularly vulnerable. Moreover, both the overall impact on the federal budget might be somewhat less if we take into account the opportunity to avoid some of the extra costs that their deteriorating conditions will impose on Medicare when they do become eligible—and that's not considering the human costs of leaving these people vulnerable and without coverage.
Are there other policy options, in addition to eliminating the waiting period, that could ease health care access problems for disabled people?
Livermore: Some states have instituted a Medicaid buy-in. The premiums are all sliding-scale based on income, so it can be affordable for lower-income workers. There are income- and asset-level requirements, with some states more stringent than others. For instance, Massachusetts has no income or asset cut-off—as long as you meet the disability requirement, you can buy into the program. Many states do have an income cut-off—around 200 percent of the federal poverty level, generally. It can offer a decent alternative for people who have no other insurance.
There really has to be a vehicle for disabled people to receive or purchase public health insurance—whether through Medicare or Medicaid—because the private market isn't going to offer them coverage. Most of them wouldn't be able to buy it on the individual market, at any price.
