There has been much discussion in the news recently as Congress has been debating reforms to healthcare. In just the last week, 50% of individuals I met with did not have healthcare coverage. These individuals had lost healthcare coverage because they were unable to continue to perform their jobs because of disability. They do not qualify for any State-Assisted Medical Coverage because of household income, and their spouse does not have a healthcare plan that they are eligible to enroll in. Due to limited income, severe pre-existing conditions, and lack of affordable healthcare coverage, these individuals are forced to go without medical coverage.
Why Change Anything, I Am Happy with My Health Insurance?
Most individuals I speak to regarding these issues are not worried about the healthcare debate because they are happy with the current coverage that they have. These individuals often ignore how easy it would be to lose this coverage. For the majority of Americans, healthcare coverage is linked to your job. If you lose your job, you also lose your medical coverage. Although this is not an issue for a healthy individual that is able to obtain a new job (and new coverage), if you have lost your job because of your medical condition, you may quickly find yourself without medical insurance coverage. Even if you are eligible for COBRA coverage, when the choice is paying your mortgage and buying groceries or paying for health insurance, most individuals choose the necessities. No one ever expects to be in a position that they will not have health insurance available to them.
Medical Coverage does not Begin Immediately with Social Security Disability
What is shocking to most people is that if they are found disabled by the Social Security Administration, they do not immediately qualify for healthcare coverage. Under the best-case scenario, an individual that is ultimately found disabled is not entitled to Medicare coverage until 29 months after they last worked. (This is assuming that the individual was found disabled on the first of the month that they stopped working, and that the Social Security Administration determined that the medical condition was severe enough that they were entitled to disability from the day that they stopped working.)
If you are found entitled to Supplemental Security Income payments, you are entitled to Medicaid coverage immediately. However in order to qualify for SSI, you must be able to establish that you have very little assets, and little or no income on a monthly basis. Your spouse’s income is considered when determining your eligibility for SSI. The majority of the time if you qualify for SSI, it is likely that you already had Medicaid coverage, because the Medicaid criteria are similar to SSI.
During the waiting period for Medicare, no assistance is provided for medical treatment. If you do not have health insurance, you are expected to pay for your treatment out-of-pocket. Due to the amount of your Social Security Disability Insurance, you normally do not qualify for any income-based assistance from your State. Although the government has determined that your condition is severe enough to prevent you from performing work, no help is provided to obtain the treatment you need. Once Medicare beings, these benefits are just extended to the disabled individual and are not available to a spouse or dependents.
The Importance of COBRA
The thing that surprises me about many of the uninsured people that I meet is that they had an opportunity to purchase COBRA. The individuals refused COBRA because of the cost of the coverage. These individuals were unaware of the wait time for Medicare coverage and did not realize that they would not qualify for Medicaid because of their household income. Their immediate concern was paying their existing bills. They rarely considered the impact that one hospitalization could have on them financially. Many of these individuals are later forced into bankruptcy because of the cost of required medical care.
Even though COBRA initially sounds like a expensive alternative, you must consider how much your treatment will cost without insurance coverage. I have several clients that have medications that would cost more than the monthly COBRA premium. They quickly find after they refuse COBRA coverage, that the cost of one hospitalization would have paid for 12 months of COBRA. These individuals also discover that when they are unable to pay for medical treatment, it becomes less likely that they can establish their eligibility for Social Security Disability. Since they are unable to work and they do not have medical coverage, their financial situation only becomes worse.
Alternatives for individuals without Healthcare Coverage
It is possible for individuals without healthcare coverage to purchase personal policies. However these policies are often expensive, and rates raise with age. Insurers are allowed to consider your pre-existing health conditions, and in certain situations even exclude coverage based on pre-existing conditions. Affordable personal healthcare policies for older individuals normally require high deductibles. A yearly deductible of $5000 or more may be enough to prevent an individual from obtaining treatment even though they have healthcare insurance.
Medicaid is available to individuals with financial need, but if you have any source of income or your spouse is employed, it unlikely that you will qualify for this program. If you do not qualify for Medicaid, Delaware Residents may qualify for the Community Healthcare Access Program (“CHAP”). CHAP is a network of physicians and healthcare centers in Delaware that agree to provide discounts for medical services. There are still financial eligibility guidelines, but CHAP extends medical coverage to an additional group of individuals that normally would not qualify for help.
If you do not qualify for Medicaid or CHAP, healthcare is also available through a sliding-scale healthcare center. These facilities determine your eligibility for their services based on financial criteria, and limit the number of patients that they can see. Households with higher incomes will still be required to pay out-of-pocket co-pays for healthcare treatment, but will receive a substantial discount off the normal cost.
Although all of these options are better than no treatment, you will still not receive the same level of care that you would with a traditional health insurance plan. It will be harder to obtain specialist treatment for your condition, and some tests and medications that are needed will be excluded. Since treatment will be limited, establishing disability will be harder.
Pay Attention to Healthcare Debate
The purpose of this post is not to advocate any specific plan for reform, but instead to raise awareness of unforeseen healthcare concerns. Most of the uninsured people that I meet never expected to find themselves uninsured. They are normally hard-workers that simply did not realize that if their job ended due to disability, they would also lose medical benefits. These are individuals that always had healthcare coverage, and now when the need it the most, no affordable option is available.
Because continuing treatment is important to the Social Security Disability determination, many of these people will be denied benefits that they deserve because they cannot obtain the medical treatment that they need. These people need to share their stories with elected officials, family, friends and the public. It is only through increased awareness of these problems that there will ever be support for meaningful reform.
Relevant Links:
- Delaware Low-Cost Healthcare
- Delaware Division of Medicaid & Medical Assistance Programs
- Community Healthcare Access Program (CHAP)
- Delaware Uninsured Resources
- Delaware Insurance Commissioner’s Health Insurance Guide
This article was written by Steven Butler. Steven is a partner at Linarducci & Butler, PA and his practice is limited to Social Security Disability/SSI claims. Steven offers free initial consultations for Social Security Disability/SSI claims to residents of Delaware, Maryland, New Jersey and Pennsylvania. To schedule a consultation with Steven, please use the Linarducci & Butler Contact Form or call 302-613-0707 to schedule an appointment.