What You Need to Know About Medicare Disability When Under 65

While the majority of people on Medicare are 65 or older, 16% of individuals with Medicare coverage are actually under age 65 (Kaiser Family Foundation). That’s up from 7% in 1973.

These 9.1 million people under age 65 have disabilities that allow them to qualify for Medicare coverage. This doesn’t mean that everyone who is disabled has access to Medicare – there are some rules and regulations involved. 

Here’s what you need to know about Medicare, Medigap, Medicare Advantage, and everything in between.

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Who is eligible for Medicare before they turn 65?

Those who have been diagnosed with amyotrophic lateral sclerosis, also called ALS or Lou Gehrig’s disease, are automatically enrolled in Medicare regardless of age.

Also, those who have been diagnosed with End-Stage Renal Disease (ESRD) can get Medicare no matter how old they are if all of these apply:

• Their kidneys no longer work
• They need regular dialysis or have had a kidney transplant
• One of these applies:

1. They’ve worked the required amount of time under Social Security, the Railroad Retirement Board (RRB), or as a government employee
2. They’re already getting or are eligible for Social Security or Railroad Retirement benefits
3. They’re the spouse or dependent child of a person who meets either of the requirements listed above

You can read more about ESRD on Medicare’s website.

The final – and most common – way to qualify for Medicare coverage under 65 is if you have received Social Security Disability (SSDI) checks or Railroad Retirement Benefits (RRB) because of a disability for 24 months (doesn’t have to be consecutive months).

The latest data from 2014 breaks down the conditions of those who received SSDI:

• 34% qualified for Medicare due to mental disorders
• 28% due to diseases of the musculoskeletal system and connective tissue
• 4% due to injuries
• 3% due to cancer
• 30% due to other diseases and conditions

You automatically get Medicare Part A and B after 24 months of disability from SSDI or RRB. You don’t have to sign up – you’ll get the red, white, and blue Medicare card in the mail 3 months prior to your 25th-month disability check.

Should I get Medicare Part B if I have a disability?

While we recommend keeping Medicare Part A (it’s $0 premium), you might choose to delay Medicare Part B (this has a monthly premium).

If you decide not to take Part B, follow the instructions on the back of the Medicare card that’s sent to you and send it back. If you keep the Medicare card, you automatically keep Part B and will start paying the Part B premiums.

The main reason to delay Part B coverage is if you already have insurance that costs less or has benefits you don’t want to give up. For example, you might have inexpensive coverage through your spouse that’s currently working. 

We can get in the weeds with the variety of specific situations pretty quickly, so please contact us and we can help you determine if you should delay Part B.

What are the Medicare benefits for those who are under 65 and are disabled?

Whether you qualify because of a disability or you’re turning 65, Medicare coverage is the same.

It really is excellent coverage, particularly compared to the high deductibles and premiums that are typically the norm for most Americans. You get Medicare Part A, which is your hospital insurance. It’s $0 premium for most people unless you have a higher income.

Medicare Part A helps cover inpatient hospital stays, skilled nursing facility care, hospice care, and home health care. There are still some costs involved for you, and they change every year. You can read about those on our continually updated Medicare Costs page.

Medicare Part B is your medical insurance. It does have a monthly premium, which is why you may think twice about delaying it. Part B covers medically necessary services and preventive services. Think doctor visits, flu shots, or an ambulance ride.

Medicare Part B also has some cost-sharing involved, which includes a small deductible and 20% coinsurance. That coinsurance can really add up if you have a medical condition, which is why most of our clients choose to add supplemental insurance.

Can you buy a Medicare Supplement if you’re under 65 in Illinois?

Those who are under 65 and are disabled can purchase a Medicare Supplement to help fill the gaps of Medicare coverage. (Medicare Supplements are also called Medigap plans for this reason.)

Open enrollment for under 65 and disabled

Enrollment rules can vary by state, but in Illinois, those who qualify for Medicare because of a disability have the same Medigap enrollment window as seniors (Illinois Department of Insurance).

You can apply for a Medigap policy within 6 months after enrolling in Medicare Part B. During this 6-month open enrollment period (which starts the day you enroll in Medicare Part B), Medigap companies must allow you to buy any of the Medigap plans it offers.

This means you do not have to go through medical underwriting in order to purchase a Medigap policy. In addition, for disabled people under 65, companies are not allowed to charge you more than the highest rate on their current rate schedule. 

Guarantee issue right for under 65 and disabled

You may be able to buy a Medigap policy outside of the normal open enrollment period if you’re in one of these situations:

• You have Medicare and an employer group health plan terminates or ceases to provide all supplemental benefits.
• You’re insured by a Medicare Advantage plan that has a service area (such as a PPO or HMO) and 1, you move out of the service area, 2, the carrier goes out of business, withdraws from the market or has its Medicare contract terminated, or 3, the plan violates its contract provisions or is misrepresented in its marketing.
• You are insured by a Medigap policy and 1, the insurer goes out of business, 2, withdraws from the market, or 3, the insurance company or agents misrepresent the plan and you are without coverage.

Whether you’re under 65 or over 65, the guarantee issue right applies to Medigap plans A, B, C*, D*, F*, G*, K, or L.

*Plans C and F will no longer be available to people who are new to Medicare on or after January 1, 2020. However, if you were eligible for Medicare before January 1, 2020 but not yet enrolled, you may be able to buy Plan C or Plan F (Medicare.gov).

When you qualify for a guarantee issue (GI) right, companies can’t place any restrictions, such as pre-existing condition waiting periods or exclusions, on the policy. Your GI right is valid for 63 days from the date coverage ends or from the date of notice that coverage will end.

Should I choose a Medicare Advantage plan?

Medicare Advantage (MA), sometimes called Medicare Part C, is an alternative option to Medicare Parts A and B. MA plans must include at least the same benefits as Original Medicare, and they’re sold by private insurance companies.

You have the option to sign up for an MA plan as soon as you’re eligible for Medicare. 

You have a 7-month window that begins 3 months before your 25th month of getting Social Security or RRB disability benefits, includes the 25th month, and ends 3 months after your 25th month of getting disability benefits.

Medicare Advantage HMOs and PPOs

In central Illinois, our Medicare Advantage HMO and PPO options aren’t that compelling right now. We frequently run into network issues where our clients are not able to see their preferred doctor, and in most cases, a Medicare Supplement makes more sense. 

If you live in a larger city, like Chicago, there are more Medicare Advantage options available, but in smaller cities and rural areas, we find it challenging to find a great plan.

Medicare Medical Savings Account (MSA)

Those who are disabled and under 65 can choose a Medicare Medical Savings Account (MSA), which is a type of Medicare Advantage plan. 

An MSA is a $0 premium, high-deductible health insurance plan paired with an annual deposit you can use for qualified medical expenses. MSAs don’t have networks (you can see any doctor that accepts Medicare).

We consulted with our in-house MSA expert, Steve Spinner, and he explained that the MSA can make sense for disabled people under 65 in certain situations.

Disabled people under 65 may enjoy a Medicare MSA if:

• The disability does not have you in and out of the hospital, and you don’t see the doctor more than a couple of times per year

Disabled people under 65 are not great candidates for a Medicare MSA if:

• The disability requires frequent doctor or hospital visits

Steve says we weigh the pros and the cons the same way for any demographic, whether you’re under 65 or over 65.

“The MSA can be a great tool to help offset medical costs. As long as we can see an opportunity to have some dollars left in your account at the end of the year, we think it’s a winning scenario,” Steve says.

Under 65, disabled, and working – can I keep Medicare?

If you’re under 65 and have a disability, you can go back to work and keep your Medicare coverage for as long as you’re medically disabled (Medicare.gov).

The only caveat here is that if you do go back to work, you won’t have to pay the Part A premium for the first 8.5 years. After that, you’ll have to pay the Part A premium, which can be as high as $458 per month in 2020.

Get personalized help

Everyone’s situation is unique, which is why it’s so important to meet with an agent here at Sams/Hockaday. Our mission is always education first, so please don’t hesitate to schedule an appointment. We’d love to help you understand your options, whether you’re disabled under 65 or are aging into Medicare.