Medicare typically provides coverage for people who are aged 65 or older, but younger people with certain disabilities or health conditions may also get these benefits.
If a person receives disability benefits from the Social Security Administration, they can qualify for Medicare coverage early.
This article explores the coverage for younger people and the rules for eligibility. It provides an in-depth look at the plans and an overview of the costs.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare was a product of the Social Security Act of 1965, which helped deliver health insurance to older citizens and those with disabilities.
The program provides coverage for people who are younger than 65 if they have disabilities or specific medical conditions and cannot work.
If a person gets Social Security Disability Insurance (SSDI) payments, they qualify for Medicare. People with end stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS) also qualify.
Rules and exclusions
To receive SSD benefits and qualify for Medicare before the age of 65, a person must have a condition that meets the Social Security Administration’s definition of a disability.
This definition applies to people who cannot work to support themselves because of a physical or mental impairment that could cause death, or has lasted or will last for longer than 1 year.
Partial or short-term disabilities do not meet the requirements.
A person with a qualifying disability becomes eligible for Medicare when they have received SSDI benefits for at least 24 months. At the start of month 25, Medicare automatically enrolls the person in parts A and B.
During the 2-year waiting period, a person might qualify for healthcare coverage under their employer’s insurance policy. If a person loses their job, they can access healthcare coverage through the Consolidated Omnibus Budget Reconciliation Act, sometimes called COBRA.
Also, after receiving a diagnosis of a qualifying disability, a person faces a 5-month waiting period before they receive SSID payments. The stated reason is to prevent people with ineligible disabilities from receiving benefits.
If a person has ESRD or ALS, they do not have to wait 2 years before qualifying for Medicare.
Medicare enrolls anyone with ALS in the first month that they receive SSDI benefits. A person with ESRD is eligible for Medicare from the first day of the 4th month of their dialysis treatment.
After a person meets the criteria for SSDI, they qualify for auto-enrollment in Medicare parts A and B, which are collectively called original Medicare.
Below, learn about the coverage and costs of each part:
Medicare Part A with SSDI
Medicare Part A covers inpatient hospital stays, including the costs of:
- hospitalization, such as the cost of the room and meals
- medical tests
- blood transfusions
- diagnostic testing
- skilled nursing care
Costs
Most people do not pay a premium for Medicare Part A. For example, this is true for people who receive Social Security Administration or Railroad Retirement Board benefits and people who have received SSDI benefits for 2 years.
Part A has a deductible of $1,484 in 2021 for inpatient hospital stays. After someone has met this, Medicare covers the first 60 days of the hospital stay. If the stay has lasted for more than 60 days, additional out-of-pocket costs apply.
Medicare Part B with SSDI
Medical Part B pays for outpatient medical services, including:
- visits to a doctor
- some preventive care
- physical therapy
- outpatient care
- ambulance services
- mental health services
- durable medical equipment and prosthetics
- limited prescribed drugs
Costs
Medicare automatically deducts Part B premiums from SSDI payments. The standard Part B premium for 2021 is $148.50.
An additional cost is the Part B deductible, of $203 in 2021. After someone meets their deductible, they pay 20% of the Medicare-approved amount for covered services.
If an individual has healthcare coverage from another source, such as their partner’s employment, they can opt out of Medicare Part B coverage.
However, a late enrolment penalty may apply if a person does not enroll in Part B when they first qualify.
Medicare Part C with SSDI
Part C plans, also known as Medicare Advantage, combine the benefits of parts A and B. Private insurance companies offer Advantage plans, which may also include benefits such as vision, dental, fitness, and Part D prescription drug coverage.
A Special Needs plan, or SNP, is an Advantage plan tailored to meet the needs of people with certain chronic conditions, including ALS and ESRD.
Costs
Costs of Advantage plans vary. The average Advantage plan monthly premium in 2019 was $29, according to the Kaiser Family Foundation.
On top of this, a person may have to pay copays and deductibles. However, there may be an annual limit for out-of-pocket costs, which may be lower for people with Advantage plans than those with original Medicare.
A person may be eligible to receive extra support, based on their income.
Medicare savings plans
For people with low incomes, the government helps pay out-of-pocket costs through four Medicare savings plans. These are the:
- Qualified Medicare Beneficiary, or QMB, program
- Specified Low-Income Medicare Beneficiary, or SLMB, program
- Qualifying Individual, or QI, program
- Qualified Disabled and Working Individuals, or QDWI, program
Medigap
If a person does not qualify for a savings plan, they might consider a Medigap plan. Private insurance companies offer these plans to cover out-of-pocket expenses that remain after Medicare has paid its share.
Extra Help
A person enrolled in a Medicare Part D prescription drug plan might qualify for the Extra Help program, which provides support for people with limited resources.
Although Medicare typically covers healthcare costs for people aged 65 and over, it also provides this coverage to younger people who receive SSDI benefits or have certain chronic health issues.
For younger people with SSDI benefits, Medicare automatically enrolls an individual after they have received SSDI benefits for 2 years. If the person has another form of healthcare coverage, they can decline to enroll in Medicare Part B.
Typically, Medicare Part A is premium-free. A person pays a premium for Part B and out-of-pocket costs, such as deductibles and copayments. The government provides additional financial support through various programs, including savings plans and Extra Help.