Medicare waiting period leaves over 1.2 million seriously disabled without secure health insurance

July 16, 2003

New York City, July 16, 2003--Over 1.2 million seriously disabled Americans under age 65--including as many as 400,000 without health insurance--are currently in the two-year waiting period for Medicare coverage, according to a new report from The Commonwealth Fund. Eliminating this two-year waiting period would provide stable health insurance to a vulnerable group of adults who are unable to work. Some disabled adults in the waiting period qualify for state Medicaid programs. The report finds that dropping the two-year Medicare wait would save cash-strapped states an estimated $1.8 billion a year in Medicaid costs.

"At a time when Congress is considering major reforms to Medicare they should not forget some of the most vulnerable of all potential beneficiaries--seriously disabled adults who are unable to work," said Karen Davis, president of The Commonwealth Fund. "Individuals in the waiting period for Medicare suffer from a broad range of debilitating diseases and are in urgent need of appropriate medical care to manage their conditions. Eliminating the two-year wait would ensure access to care for those already on the way to Medicare."

Currently, 1.26 million seriously disabled Americans are in the waiting period for Medicare coverage, and as many as one-third of them (400,000) have no health insurance, according to the report, Expanding Health Coverage for Seriously Disabled Adults by Eliminating Medicare's Two-Year Waiting Period, by Stacy Berg Dale and James M. Verdier of Mathematica Policy Research, Inc. These disabled adults under age 65 must first qualify for Social Security Disability benefits by satisfying the work history requirements and proving that they are too disabled to work, wait five months for these benefits to begin, and then wait an additional two years for Medicare. Adults under 65 who qualify for Medicare based on disability suffer from a range of chronic illnesses: more than nine of 10 have one or more chronic diseases including arthritis, heart conditions, lung disease, cancer, and severe mental illness. All are unable to work. By the time they reach Medicare, most (77%) are poor or nearly poor.

Based on reports from several states, the authors estimate that 40 percent of those in the waiting period are enrolled in Medicaid programs, having qualified as disabled and poor. Eliminating the two-year waiting period for Medicare would benefit states by reducing their costs for Medicare-covered services. The report finds that states would save an estimated $1.8 billion per year if the Medicare waiting period were eliminated. Federal Medicaid expenditures for the disabled would also be reduced, by $2.5 billion, offsetting some of the $8.7 billion increase in federal Medicare expenses that would result from the change.

"At a time when states are considering steep cuts in essential services, eliminating this hurdle to Medicare could make a real difference in states' ability to maintain insurance coverage," said Verdier. "Our analysis illustrates that savings could help states maintain Medicaid coverage for children and families or the safety net for elderly and disabled for services not covered by Medicare. If Medicare included prescription drugs, state Medicaid savings could potentially be even greater."

In addition to insuring as many as 400,000 uninsured disabled adults, eliminating Medicare's waiting period would improve the financial security of disabled adults paying high premiums to maintain private coverage after losing jobs due to disability. The report notes that, to the extent that disabled adults rely on coverage through their prior employer or their spouse's employer, eliminating the waiting period would also produce savings to employers who provide this coverage.
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The Commonwealth Fund is a private foundation supporting independent research on health and social issues. To read or download publications, visit our website at www.cmwf.org.

Commonwealth Fund

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