Eliminating the Medicare waiting period for Social Security disabled-worker beneficiaries.

Abstract

Medicare eligibility for Social Security Disability Insurance beneficiaries begins no earlier than 24 months after entitlement to cash benefits. The original purposes of the 24month waiting period were to limit costs to the Medicare trust funds at a time when many workers might have other health insurance coverage and to ensure that Medicare protection is extended only to persons whose disabilities are severe and long lasting. Some policymakers have advocated shortening or eliminating the waiting period to improve access to medical services and to alleviate the burden of very high medical expenses. Using a unique file of longitudinal data from Social Security and Medicare records, Medicare costs during the waiting period have been estimated for a randomly selected cohort of 18,782 disabledworker beneficiaries first entitled to disability benefits in 1972. The estimates suggest that the lo-year cost to Medicare of this cohort would have increased by about 45 percent if the waiting period had been eliminated and if Medicare were the primary payer during that time. Thirty percent of the increase in expenses would have been for persons who died within 2 years of entitlement to disability benefits. Data from the New Beneficiary Survey indicate that in 1982 about 27 percent of disabled-worker beneficiaries had no health insurance coverage in the last 6 months of their waiting period. These beneficiaries and others without insurance who died in the first 18 months of eligibility for Disability Insurance would benefit the most from elimination of the waiting period. Other data show that providing timely Medicare coverage might be difficult for some beneficiaries because of the retroactive nature of many disability program entitlements.