Medicare: Disabled and Under 65

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People who qualify for disability income benefits automatically receive Medicare after 24 months of SSDI benefits. Your Medicare benefits can coordinate with employer coverage if you are still able to work, or the can become your primary coverage.

Let’s look at some common scenarios for people under 65 on Medicare.

Under 65 and Disabled with Employer Coverage

If you qualify for Medicare due to disability, your Medicare benefits can coordinate with employer coverage. The size of your employer dictates whether Medicare will be primary or secondary.

Large Employer Coverage

If you work for a company that has 100 or more employees, your employer benefits are primary, and Medicare would be secondary coverage. Therefore, it isn’t required that you accept Medicare benefits.

However, Part A is free to people who have worked at least 40 quarters in the United States. If Part A is free to you, you might as well enroll into at least Part A so that you can have additional coverage for hospital costs.

Since Part B and Part D aren’t free and most employer plans include both, you don’t have to worry about enrolling in these quite yet. Still, if you are okay with paying additional monthly premiums to have the most coverage possible, you can.

Small Employer Coverage

If your employer has less than 100 employees, then Medicare will be your primary coverage. This means you should definitely enroll in Part A and Part B. These parts will pay first, and then your employer coverage can pay secondary.

Without these parts, your out-of-pocket expenses would be extreme. However, since most employer coverage plans include drug coverage (Part D), you can choose to delay enrolling into Part D if you like.

Quick Tip: If you contribute to an HSA, you will want to look into how Medicare works with Health Savings Accounts before enrolling into any part of Medicare.

Under 65 and Disabled WITHOUT Employer Coverage

Many people who are receiving SSDI benefits are unable to work. In this case, Medicare will be your primary coverage and you’ll need supplemental coverage to fill in the gaps.

You can look into two potential options: Medicare supplements and Medicare Advantage plans. Medicare Supplement plans are a great way to receive extra coverage for medical expenses. Also, if you apply for a supplement plan during the first 6 months after having Part B, you won’t have to go through medical underwriting.

However, depending on what state you live in, you may not be able to get the plan option you want, or any plan at all for that matter.

Each state is able to set laws on what insurance companies must offer to disabled Medicare beneficiaries who are under 65. For instance, in Texas, insurance companies are only required to offer Medicare Supplement Plan A.

To make matters worse, Medicare supplements for people under 65 can sometimes be very expensive.

This is because the insurance companies know that when you have Medicare prior to turning 65, you have a disability which qualified you for that coverage. They are aware that people with disabilities may have higher medical usage and healthcare spending.

Sometimes people under 65 will find that rate increases are high, and the coverage may become unaffordable. For this reason, many people on Medicare due to a disability will consider Medicare Advantage plans for their coverage.

The Medicare Advantage Option

Medicare Advantage plans are private healthcare plans that you can enroll in instead of sticking with Original Medicare.  One reason why this type of plan may be a good fit is because their premiums are identical to anyone on the same plan. You will have the same premium as someone who isn’t disabled.

Medicare Advantage plan premiums are usually lower than premiums for Medicare supplements as well. This can be helpful if your SSDI benefits are your only source of income.

Lastly, Advantage plans are a good choice for disabled beneficiaries because there is only one question you must answer for medical underwriting. If you can answer no to that question, then you will be accepted. This makes it easy to find suitable coverage.

Having an Advantage plan means you won’t have to worry about rate increases due to your disability either because the premiums are the same for everyone.

Your Second Open Enrollment Period

When you finally turn 65, you will have a second open enrollment period during which you can apply for a Medicare Supplement plan without going through medical underwriting. Now, other insurance companies won’t know if you are disabled or not. Everyone age 65 and older gets the same rate increases which are usually much more manageable.

You may also have more options in which supplement plan you enroll in. For example, in Texas people who formerly could only get Plan A can now get any Medigap plan at 65. Other Medigap plans such as Plan F or Plan G have much more robust coverage. Be sure to check the laws in your state to find out which types of plans people under age 65 can purchase in your state.

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