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How does Medicare work with Social Security disability benefits?

Health insurance is critical when you have a disabling medical condition. The good news is that if you receive Social Security Disability Insurance (SSDI), you automatically qualify for Medicare. However, you will likely have to wait to capitalize on that benefit.

While the federal Medicare program primarily serves people 65 and older, it is also available for younger adults who have a disability. Most SSDI recipients qualify for Medicare 24 months after they become eligible for disability benefits. The waiting period is waived for people with amyotrophic lateral sclerosis (ALS) or end-stage renal disease.   

The reasons for the delay are economic. When Congress voted in 1972 to expand Medicare to cover people with disabilities, it included the two-year delay to help mitigate the cost of adding those beneficiaries to the rolls, and to avoid replacing coverage some disabled workers would be able to get from their former employers through COBRA

Aside from the waiting period, Medicare functions for people with disabilities much as it does for eligible older adults. You likely won’t have to pay for Medicare Part A (hospitalization coverage) if you paid Medicare taxes while you were working. However, you will have monthly premiums for Part B (physician and outpatient services) and for a Part D prescription drug plan if you opt to enroll in one. These costs may be deducted from your SSDI benefit.

How the waiting period works

The Social Security Administration (SSA) counts each month in which you are entitled to receive an SSDI payment toward the 24-month Medicare qualifying period. 

There is also a waiting period for SSDI payments to begin, lasting five full calendar months after the month in which the SSA determines that your disability began (essentially, when you became unable to work due to your condition). That means, in most cases, you become eligible for Medicare 29 months after what Social Security terms the “onset” of your disability.

Remember, though, that your onset date can be well before you filed for SSDI or were approved to collect it (a process that typically takes several months and can go much longer if it involves appealing an initial denial of benefits). In fact, Social Security can pay up to 12 months of retroactive benefits if it determines, based on the medical evidence, that your disability predated your application. 

And those months when you were medically entitled to SSDI but had not yet been approved to receive it count toward the Medicare waiting period. Say you applied for SSDI on Sept. 10, 2021, eight months after a chronic illness sidelined you from your job. Social Security approves your claim in February 2022 and denotes Jan. 10, 2021, as the start date of your disability. 

Your benefit entitlement, then, began in July 2021, the sixth calendar month after your onset date. You would get seven months of retroactive payments (for the period of benefit eligibility that predated your claim approval) and become eligible for Medicare in July 2023, 17 months after you got a decision from the SSA.

If you had a prior period of disability, that time can also be credited toward your Medicare start date if the new onset occurs less than five years after your previous stint on SSDI ended, or if it is due to the same medical condition or a closely related one. 

If you go back to work

Medicare coverage linked to receiving SSDI will end if benefits stop because your condition improves to the point that Social Security no longer considers you disabled. The SSA does periodic reviews to determine your continuing medical eligibility for benefits.

SSDI can also end if, while still meeting the medical criteria for disability, you are able to work and your income exceeds a limit known as substantial gainful activity (SGA). In 2022, the limit is $1,350 per month, or $2,260 if you are blind. If you earn more, you can lose your benefits. 

In that circumstance, however, you may not lose Medicare coverage, due to the suite of work incentives Social Security offers to help disabled beneficiaries make the transition back to the workforce.

For example, you will not lose SSDI or Medicare benefits during a trial work period, an incentive that lets you earn more than the SGA limit for any nine months over a five-year period. If you are working at or above SGA level when the trial period ends, you lose SSDI but can remain on Medicare and pay no Part A premiums for 93 consecutive months (seven years and nine months), as long as you still have a qualifying disability.

After that, you can remain on Medicare but will have to pay for Part A, at least until you turn 65 and become Medicare-eligible based on age.

Keep in mind

  • Medicare eligibility does not come with Supplemental Security Income (SSI), the other SSA-administered benefit for people with disabilities. SSI recipients in most states do automatically qualify for Medicaid, the federal-state health insurance program for people with low incomes.
  • SSDI beneficiaries waiting for their Medicare to start may be able to fill gaps in their health coverage by signing up for Medicaid, if they meet the program’s qualifying criteria. 
  • If you are offered health insurance through an employer, you may be able to stay on Medicare so long as you remain medically disabled. Depending on the size of your workplace, Medicare might become the “secondary payer,” meaning providers bill it for services your work-based insurance won’t cover.

Published April 11, 2022