Health Insurance & SSD Benefits

When Congress created the Social Security Disability benefit in 1956, the legislators did not link it to any health insurance program. Nine years later they established Medicare by adding Title XVIII to the Social Security Act, but they did not link the two programs. That changed when health insurance for the disabled became part of the Nixon Health Care initiative in 1972. Since then, when you have received Social Security Disability or SSD benefits for two years, the Social Security Administration, or SSA, enrolls you in Medicare automatically.

SSD Benefits

• For its first four years, Social Security Disability benefits were available only to those 50 and older. In 1960, Congress expanded the program to include workers of all ages. If you are disabled, and qualify, Social Security Disability Insurance, or SSDI, pays monthly cash benefits to replace some of your lost wages. Past earnings determine the amount the SSA pays each month. You must apply for SSDI. Benefits begin five months after the date of your disability. However, even though your benefits accumulate, you receive no cash payments until the SSA approves your application. Social Security can pay you retroactively for up to 12 months.

Medicare

• Congress created the Medicare Health Insurance Program in 1965 to provide health coverage to senior citizens. Medicare helps pay for hospitalizations, physicians' fees and (as of 2006) prescription drugs. Workers contribute payroll taxes to Medicare (as they do to Social Security), and they typically become Medicare-eligible when they reach age 65. Medicare Part A (primarily hospitalizations) has no premiums; Part B (primarily physicians) has a monthly premium, as does Part D (drug costs).

The Linkage

• Congress linked Social Security Disability Insurance to Medicare in 1972 by extending Medicare benefits to SSDI recipients. (If you are receiving SSDI, when you reach your 65th birthday, your benefit classification changes from SSDI to Social Security, so there are no people age 65 or older receiving SSDI.) The law requires a two-year waiting period after you first receive SSDI before Medicare benefits begin.

What People Do

• The AARP reports that at any one time, 25 percent to 30 percent of those waiting for Medicare are--and remain--uninsured. An additional third enrolls in Medicaid, a joint federal-state health insurance program for the poor. A small percentage purchase health insurance on the open market, and the remainder (slightly less than half) use COBRA benefits to keep their employer-provided group health insurance during the waiting period.

COBRA

• COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1985, lets workers who leave a job (for whatever reason) keep their employer's group health insurance for up to 18 months. The authors of COBRA included special provisions for the disabled waiting for Medicare. If the SSA determines your disability occurred on or before your 60th day of COBRA coverage, you will receive an additional 11 months of coverage. Twenty-nine months ensures you can keep your coverage until Medicare kicks in. If you suspect you're disabled, consider using your COBRA coverage first.