110 Maryland Ave Suite 112, Washington, DC 20002 · Tel: (202) 544-5561 · Fax: (202) 544-5549
www.medicarerights.org
FACT SHEET: Medicare Two-Year Waiting Period for People with
Disabilities
Background
When Medicare expanded in 1972 to include individuals with significant disabilities, Congress
stipulated that people with disabilities must first receive Social Security Disability Insurance
(SSDI) for 24 months before gaining Medicare eligibility. This legislation was created to keep
costs down and to avoid replacing coverage for a disabled worker still receiving benefits
under a private group health plan.
Individuals with disabilities must undergo a lengthy process before receiving Medicare
coverage. First, the Social Security Administration must make a determination of SSDI
approval. Second, individuals with disabilities must wait five-months before receiving SSDI
benefits. Finally, after receiving their SSDI benefits, individuals must wait an additional 24
months before they receive Medicare coverage. (Exceptions to the waiting period have been
made for individuals with ALS, and for those with end-stage renal disease.)
Facts and Figures
An estimated 1.8 million people with disabilities are caught up in this waiting period for
Medicare. Since SSDI recipients are unable to work, they cannot access the principal source
of coverage for people under 65—employer-sponsored insurance. Instead, people in the
Medicare waiting period generally obtain coverage if they qualify for Medicaid, or if they can
pay the premium to continue under their former employers plan under COBRA.
According to a July 2003 Commonwealth Fund Report, nearly 39 percent of these individuals
do not have health insurance coverage at some point during the waiting period and 24
percent have no health insurance during this entire period. (Elimination of Medicare’s
Waiting Period for Seriously Disabled Adults: Impact on Coverage and Costs, The
Commonwealth Fund, July 2003).
A study examining coverage during the waiting period for Americans aged 55-64 found that of
those without coverage, about half were uninsured prior to the waiting period. The loss of
employer coverage accounted for 36 percent of the uninsured, and 4 percent had lost the
Medicaid coverage they had prior to the waiting period due to their SSDI cash benefit.
(Transitioning to Medicare Before Sixty-Five, Health Affairs, March 2008).
For those with COBRA or other private coverage at some point during the waiting period (58
percent of individuals 55-64) the costs are very high:
• For the first 18 months, the premium for continuing health insurance coverage through
COBRA costs up to 102 percent of the total cost of coverage (full premium plus a 2
percent administrative fee).
• For those receiving the 11-month disability extension, the premium for these additional
months may go up to 150 percent of the total cost of coverage (Transitioning to
Medicare Before Sixty-Five, Health Affairs, March 2008).
• It is common that during these 24 months, vulnerable individuals will lose their health
insurance because they can no longer afford their COBRA or other private health
insurance plans.
Estimates for Medicaid coverage during the waiting period range widely (from 17 percent for
individuals 55-64, to 40 percent in earlier research).
Solution
No one with disabilities severe enough to qualify for SSDI should be without health insurance.
The Ending the Medicare Disability Waiting Period Act of 2009, sponsored by Senator Jeff
Bingaman (S. 700) and Rep. Gene Green (H.R. 1708) phases out Medicare’s two-year
waiting period over a 10 year span. The phase out initially reduces the wait to 18 months,
and then reduces it by 2 months every year over 10 years. The bill also would immediately
eliminate the wait for people with life-threatening illnesses as determined by the Secretary of
Health and Human Services. The legislation also advises the HHS Secretary, when
compiling the list of life threatening diseases, to consult the Social Security Administration’s
Compassionate Allowance list which was created to provide benefits quickly to applicants
whose medical conditions are so serious that their conditions obviously meet disability
standards.
Eliminating the 24-month Medicare waiting period for individuals who qualify for SSDI will
cost the federal government $113 billion over ten years, while decreasing federal Medicaid
spending by about $32 billion over the same period. This option would boost tax revenue by
about $3 billion over the 10 year span because of lower health insurance costs for
employment-based plans, bringing the net deficit to about $110 billion. Reducing the wait for
Medicare coverage to 12 months would cost $65 billion, according to a recent analysis of
health policy options by the Congressional Budget Office (Budget Options, Volume 1, Health
Care
,
Congressional Budget Office, December 2008).
When instituted in 1972 the waiting period was intended to limit Medicare costs. However,
providing health insurance to those in the waiting period may reduce Medicare spending on
these individuals over the long term. Many individuals forgo medical treatments, stop
medications, and further compromise their health during these 24 months, which can lead to
higher costs of care once covered. Tragically, 4 percent die during their wait for Medicare
coverage.
A study examining previously uninsured adults who enroll in Medicare because of age, found
these individuals required more intensive and costlier care than those previously insured:
• Previously uninsured individuals reported 20 percent more hospital visits
• Medical expenditures were 1.87 times higher than previously insured adults. (Use of
Health Services by Previously Uninsured Medicare Beneficiaries, New England
Journal of Medicine, July 2007)
It is time to work to eliminate this wait to provide a healthier foundation for an already sick
population.
