Insurances: Disability Support Options

There are several insurance options available for people with disabilities. In the US, the Social Security Administration offers Social Security Disability Insurance (SSDI), which provides monthly payments to people with disabilities that affect their ability to work. Additionally, individuals may be eligible for Supplemental Security Income (SSI), which is available to those with low incomes, limited assets, and impaired ability to work due to old age or disability. Medicare and Medicaid are also common health plan options for people with disabilities, although eligibility criteria must be met. Private insurance is less common due to the availability of public coverage, but disability insurance benefits are often included in employer-sponsored health plans. These typically include short-term and long-term disability insurance options.

Medicare and Medicaid

Medicare

Medicare is available for certain people with disabilities under the age of 65. To be eligible, individuals must have received Social Security Disability Insurance (SSDI) benefits for 24 months, have End-Stage Renal Disease (ESRD), or Amyotrophic Lateral Sclerosis (ALS, also known as Lou Gehrig's disease). People with ESRD and ALS do not have to wait 24 months to be eligible for Medicare. People who meet the criteria for SSDI are automatically enrolled in Medicare Parts A and B. Those who meet the standards but do not qualify for SSDI can purchase Medicare by paying a monthly premium for Parts A and B.

Medicare coverage for people with disabilities includes certain hospital, nursing home, home health, physician, and community-based services. The healthcare services do not have to be related to the individual's disability to be covered. There are no illnesses or underlying conditions that disqualify people for Medicare coverage.

Medicare eligibility for working people with disabilities falls into three time frames: the trial work period, the extended period of eligibility, and an indefinite period following those 93 months. During the trial work period, individuals can continue to receive Medicare and SSDI benefits while working for a maximum of 9 months within any rolling 5-year time period. To qualify, they must meet a monthly gross earnings threshold or work more than 80 hours of self-employment per month. After the trial work period, an extended period of eligibility of up to 93 months begins, during which SSDI cash benefits may cease, but the beneficiary pays no premium for the hospital insurance portion of Medicare (Part A). Finally, even after the 93-month extended coverage period, working individuals with disabilities can continue to receive benefits as long as they remain medically disabled and under the age of 65.

Medicaid

Medicaid is another option for people with disabilities, including adults and children with disabilities from birth or acquired through illness, injury, or trauma. Over one-third of Medicaid beneficiaries qualify based on a disability through receipt of Supplemental Security Income (SSI), a federal program providing cash assistance to low-income persons with disabilities (under age 65) and seniors (age 65 and older). In most states, SSI beneficiaries are automatically eligible for Medicaid.

Medicaid programs may also offer eligibility to people with disabilities through other optional pathways, such as income level, medically needy, special income level, working people with disabilities, and home and community-based services (HCBS).

Private insurance

Private disability insurance replaces the income lost when a previously employed individual cannot work due to a disability. It is usually purchased by those who are employed and are concerned about becoming disabled in the future, especially if they have dependents. Private disability insurance can be a critical component of a family's estate plan, particularly if the family has a disabled member who is dependent on a parent's or spouse's earnings.

Private long-term disability insurance is usually obtained through individual policies or group coverage. Group coverage is offered either through employer-sponsored group coverage or through some other kind of group, such as professional associations. Individual long-term disability coverage is "underwritten", meaning that both eligibility and the premium are tied to the individual's personal health history and other characteristics. Typically, the insurer will want to review a full three to five years of medical history and may require some kind of medical exam.

There are several factors that influence the cost of private long-term disability insurance, including:

• Your occupation: Risky occupations will lead to higher costs.
• Your health: Poor health, chronic illnesses, and smoking will lead to higher rates.
• Your age and gender: Older age, especially for men, will increase the monthly cost.
• The definition of disability: Policies that use an "own occupation" definition will be more expensive than those with an "any occupation" definition.
• The coverage levels of the policy: The length of the benefit period, the monthly benefit amount, and the elimination period selected will all affect the cost.

When evaluating a private long-term disability insurance policy, it is important to consider the following:

• Elimination period: The waiting period before disability payments start. A longer elimination period results in a smaller premium but increases the risk of economic hardship if short-term disability coverage is inadequate.
• Definition of disability: Policies may use Social Security's definition of disability, i.e., inability to engage in any substantial gainful activity, or a more generous definition such as inability to engage in one's previous employment or profession.
• Partial benefit: Whether the policy will provide a partial benefit for part-time disability, such as the ability to work but only for a limited number of hours per week.
• Coordination of benefits: Whether the benefit will be reduced by benefits received from another policy.
• Benefit term: How long the benefits will be paid out, which could be for a set number of years or until a certain age. A longer benefit term will result in a more expensive premium.

It is important to note that disability insurance companies are not subject to the protections in the Americans with Disabilities Act, and state laws may vary. As such, it is essential for buyers to carefully review the terms and conditions of any private insurance policy before purchasing.

Social Security Disability Insurance (SSDI)

SSDI beneficiaries may also be eligible for Medicare. This is in addition to the monthly payments they receive. It is important to note that SSDI beneficiaries must report changes in their work, income, and personal information. Failure to do so may result in consequences.

To be eligible for SSDI, individuals must meet certain criteria. Firstly, they must have a disability or blindness that significantly impacts their ability to work. Secondly, they need to have a sufficient work history. This means that they must have worked for a certain number of years and contributed to the Social Security program through payroll taxes. The specific requirements for work history may vary, but they are generally intended to ensure that individuals have worked for a substantial portion of their adult lives.

The application process for SSDI typically involves providing extensive medical records and work history information. It is important to note that the approval process can take a significant amount of time, and not all applications are approved on the first attempt. However, individuals who are denied benefits have the right to appeal the decision and provide additional evidence to support their claim.

SSDI is a vital program that provides financial support to individuals with disabilities, helping them maintain a source of income and access to healthcare through Medicare. It is designed to ensure that people with disabilities can maintain a certain quality of life and meet their basic needs. This program allows individuals with disabilities to receive the assistance they need to cover essential expenses, such as housing, transportation, and medical care.

Supplemental Security Income (SSI)

To be eligible for SSI, applicants must meet the following requirements:

• Have a disability, be blind, or be aged 65 or older
• Have limited income and resources
• Be a US citizen or national, or a lawfully permitted alien meeting additional requirements
• Reside in one of the 50 states, the District of Columbia, or the Northern Mariana Islands (exceptions apply for children of military parents assigned to permanent duty outside the US and certain students temporarily abroad)

Other factors may also affect eligibility, including the income and resources of certain household members, such as a spouse or a parent of a minor child.

SSI is administered by the US Social Security Administration (SSA) but is not paid for by Social Security taxes. It is important to note that SSI is different from Social Security Disability Insurance (SSDI), which provides monthly payments to people with disabilities that limit their ability to work and is based on work history.

In addition to SSI, individuals with disabilities may also be eligible for other programs that provide additional support, such as the Supplemental Nutrition Assistance Program (SNAP) and Medicaid. These programs can help with basic needs, including healthcare coverage, which is required under the health care law to cover pre-existing conditions from the first day of coverage.

Disability insurance

People with disabilities have several options for health coverage. These include government-funded programs, private insurance, and employer-sponsored health plans.

Government Programs

The US government offers several programs to provide health coverage for people with disabilities. These include:

• Social Security Disability Insurance (SSDI): SSDI provides monthly payments to people whose disability stops or limits their ability to work. The payment amount is based on the individual's work history before their disability. SSDI recipients are also eligible for Medicare coverage, but there is a two-year waiting period for these benefits.
• Supplemental Security Income (SSI): SSI provides benefits to people with low incomes, limited assets, and an impaired ability to work due to old age or disability. SSI recipients are typically eligible for Medicaid coverage, either automatically or through a separate application process.
• Medicare: People under 65 who have received SSDI benefits for 24 months, have End-Stage Renal Disease (ESRD), or have Amyotrophic Lateral Sclerosis (ALS) are eligible for Medicare coverage. This includes coverage for hospital, nursing home, home health, physician, and community-based services, regardless of whether they are related to the beneficiary's disability.
• Medicaid: Over 10 million people qualify for Medicaid based on disability. Eligibility pathways include SSI, income levels, and state-specific criteria. Medicaid covers primary and acute care, as well as long-term services and supports (LTSS) that are often required by people with disabilities.

Private Insurance

Private health insurance is also an option for people with disabilities. Since the passing of the Affordable Care Act (ACA), health insurance companies are prohibited from denying coverage or charging higher rates due to a disability. People with disabilities can choose from any ACA health plan that suits their individual needs and finances.

Employer-Sponsored Health Plans

Frequently asked questions