Disability MEDICARE and COBRA

As caregivers, we need to investigate whether other benefits are available if our loved one is legally disabled.

I have received many questions about disability coverage and Medicare coverage. A disability of 24 months will make a person eligible for Disability Medicare under most circumstances.

Different states will have slightly different coverage based on a state’s additional coverage for Medicare. My discussion is based on Nebraska Medicare coverage that does not have any additions.

One of the questions I received started the discussion below.

1. I am 55 and have a disability. I have been on disability Social Security for 24 months. I then purchased an Advantage Plan as I am eligible for Part A and B. I would like to buy a supplement plan instead of Advantage. My goal was to purchase a better Plan D than I have with my Advantage Plan.
2. Nebraska does not require a Medicare Supplement Plan to sell to disabled Medicare beneficiaries if under the age of 65. Some states do. (Source: https://doi.nebraska.gov /consumer/ship-brochures-and-cms-resources)

Typically, there are a number of supplements plans as well as cost plans sold in each state. Some may also sell to younger Medicare (pre-65) beneficiaries. Unfortunately, there isn’t a central repository for this information.

Advantage plans are available for sale to disabled beneficiaries, regardless of age, as the plans include Part A, B, and D coverage. As an additional benefit, the plans may include dental, vision and hearing coverage.

Disability Medicare requires the beneficiary to re-enroll in Medicare upon turning 65. You can decide to enroll in Original Medicare A and/or Part B, Advantage, buy a Supplement, or Part D without a penalty.

You also have the option of remaining on your employer’s plan through your group or COBRA insurance while disabled until you turn 65. You may be able to receive Social Security disability benefits depending on your particular circumstances. Typically, the COBRA plan will require a switch to Medicare when turning 65.

Here is where it gets complicated.

We need to remember COBRA coverage may be used concurrently with Medicare. However, COBRA cannot extend our initial enrollment periods (IEP).  Failure to enroll timely may trigger premium penalties.

COBRA is not considered creditable coverage. Future premium penalties (up to 10% each year) hinge on timely enrollment, our creditable coverage and type of coverage we buy. Remember, creditable coverage is insurance equal to or better than Medicare.  As an example, indemnified coverage is not creditable. It may be credible but not creditable.

Supplemental insurance has an IEP of six months following our Part B sign-up. COBRA insurance does not change these timelines. (Source: https:// www.medicare.gov/basics/get-started-with-medicare/medicare-basics/working-past-65/cobra-facts). The Medicare and You 2025 book is also a good reference.

I recommend reading the DOI SHIP brochures and visit the Medicare.gov website. We need to understand how disability, retirement and age affect our health coverage.

We may unexpectantly find ourselves in different health statuses due to chronic debilitating disease prior to age 65. Or our younger spouse requires insurance until they turn 65. Or recovery from an accident will take months or years and a ‘leave of absence’ from work.

All this being said, our primary goal is to ensure we have adequate health insurance that provides the necessary coverage at a reasonable price as we age, particularly with a disability.

Glossary

*DOI (Department of Insurance)

*SHIP (Senior Health Insurance Program)

*CMS (Centers for Medicare and Medicaid Services)

*COBRA (Consolidated Omnibus Budget Reconciliation Act that defined post-employment insurance)

Wanda Cantrell, RHIA, CCS, CCS-P, LPN

The column is based on Medicare guidance and reflects the views of the writer.