Figuring out how the Social Security Disability Insurance (SSDI) and Medicare programs are related can be confusing to anyone who isn't currently enrolled in these programs. This article provides basic information on SSDI and Medicare eligibility and benefits. In addition, this guide will show you how to apply for and receive the right benefits for your situation.
Defining the Programs
SSDI is a payroll tax-funded, federal insurance program that was established in 1954. A portion of the FICA taxes taken out of your paycheck are set aside for this disability insurance program, which provides monthly income to people who are unable to work due to a severe disability.
Medicare is another federal insurance program, but is health insurance instead of disability insurance. It is available to all individuals age 65 and older as well as those who have been receiving SSDI cash benefits for 24 months. The program is made up of many parts - Medicare Part A consists of hospital benefits; Medicare Part B is medical benefits; Medicare Part C (Medicare Advantage) provides extra coverage and is provided by private insurance companies; and Medicare Part D is voluntary prescription drug coverage.
Determining Eligibility - How to See if You Are Entitled to Benefits
Eligibility for each program depends on several factors. For SSDI, there are three general qualifying criteria: 1) you must have worked and paid into the program (through your payroll taxes) for five of the last 10 years, 2) you also must have been disabled before reaching the full retirement age of 65-67, and 3) you must meet Social Security's definition of "disability." The Social Security Administration (SSA) has a process to determine who's eligible for benefits. By evaluating your income, limits of your disability, past job history and more, the SSA determines whether or not you're qualified to receive disability insurance.
There are several ways people can become eligible for Medicare. Anyone who turns 65 is automatically eligible for benefits. If you get Social Security retirement benefits or receive benefits from the Railroad Retirement Board (RRB), you will be considered eligible as well. Additionally, if you're awarded SSDI benefits for something other than Lou Gehrig's disease (ALS), you will become eligible for coverage 24 months after the date of entitlement to cash benefits. If you are awarded SSDI and have ALS, you will automatically be eligible for Medicare once you begin receiving SSDI benefits, and if you have kidney failure, you'll be able to enroll in Medicare three months after starting dialysis.
Specific Benefits You Can Receive
Social Security Disability Insurance allows you to receive a regular monthly income, results in eligibility for Medicare benefits (as explained earlier), and allows possible extension of your COBRA benefits, protects your retirement and long-term disability benefits, plus allows for dependent benefits and return-to-work incentives.
Medicare has many parts to cover specific healthcare costs. Medicare Part A covers inpatient care in hospitals and provides patients with a stay in a semi-private room, complete with meals, general nursing, and drugs. Part A also covers the cost of a blood transfusion if the hospital must purchase blood for you, up to 100 days per each benefit period in a skilled nursing facility, and hospice care for those with a life expectancy of six months or less due to a terminal illness. Part A coverage costs nothing, except for your deductibles or copayments, and coverage gaps must be paid by you or covered by other insurance.
Medicare Part B covers doctors' visits and services, outpatient care, rehabilitative care under a physical therapist, occupational therapist, or speech-language pathologist, and some preventative services like flu shots and mammograms. The monthly cost (or premium) for Part B coverage is tied to your annual income and adjusted each year. Most will pay the standard Part B premium of $96.40 per month in 2009 (if your annual income is not more than $85,000 as a single taxpayer or $170,000 if filing a joint tax return).
Medicare Advantage (Part C) plans at a minimum cover everything offered by traditional Medicare (Parts A and B). They also may offer additional benefits not covered by traditional Medicare like dental care, vision screening, prescription drugs and other services that would otherwise need to be provided under a supplemental insurance policy (Medigap).
Your out-of-pocket costs are likely to be less with a Medicare Advantage plan than if you use traditional Medicare and a Medigap policy. Everyone in a Medicare Advantage plan pays at least the same monthly premium as those enrolled in Medicare Part B. Your premiums may cost more depending on the benefits provided by the plan.
Medicare Part D (prescription drug coverage) provides brand-name and generic prescription drug coverage. These plans are provided by private companies that are approved by Medicare. Part D coverage is optional and available to those enrolled in traditional Medicare (Parts A and B) or Medicare Advantage plans that don't offer prescription drug coverage. Costs, extra benefits and details vary by plan.
Work With a SSDI & Medicare Advisor Service to Maximize Your Benefits
Don't stay confused trying to figure out the complex rules of these programs on your own - let those who understand it best help you maximize your benefits. Medicare & SSDI programs can be confusing with all of the different program requirements and eligibility criterion. Working with an SSDI expert and Medicare Advisor Service can help you determine the best coverage for your specific needs to ensure you get all of the benefits you are entitled to receive.
Jim Allsup writes for Allsup, a nationwide provider of Social Security Disability, Medicare and workers' compensation services for individuals, employers and insurance carriers. Allsup provides a Medicare Advisor service to help you select the Medicare plans that are right for you.
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