By Kevin Bambury
One of the oldest financial rules of thumb is that everyone should have three month’s salary saved in case of job loss or debilitating illness or injury. In reality, according to a recent poll by the Associated Press, the majority of Americans don’t have ready access to $1,000 in an emergency.
Further, if these workers are depending on America’s social safety nets – Social Security Disability Insurance (SSDI) and Medicare – they need to think again. Both programs are set up to help people who become disabled and can no longer work (SSDI recipients are eligible for Medicare before retirement age), but neither is set up for a quick rescue.
When a worker becomes disabled and applies for SSDI benefits, the first application is usually denied and the applicant applies for a hearing before an administrative law judge. Currently, the wait time for a hearing is 730 days in Buffalo and 624 days in Rochester. When benefits are awarded (with a few exceptions) there is a five-month waiting period before the first check arrives, and a 24-month wait for eligibility for Medicare.
Even with an emergency fund, most disabled workers can’t afford to continue their employer-sponsored health insurance under COBRA, nor do most qualify for Medicaid. The result is nearly 39 percent of SSDI claimants go without medical coverage for extended periods, and 24 percent have no coverage at all.
It is estimated 1.8 million people with disabilities are without health insurance due to the waiting period for Medicare. Many of them forgo treatments and stop medications, further compromising their health.
The organization medicarerights.org reports individuals who have gone without health insurance and are newly enrolled in Medicare require 20 percent more hospital visits, with treatments costing 1.87 times more than they would for those who have had regular medical care.
Stating “no one with disabilities severe enough to qualify for SSDI should be without health insurance,” former Sen. Jeff Bingaman and Rep. Gene Green sponsored the Ending Medicare Disability Waiting Period Act of 2009, which would have phased out Medicare’s two-year waiting period. However, the bill was not passed.
There is no question Americans should save more money in anticipation of setbacks; however, even the recommended three-month emergency fund won’t cover the cost of health insurance or the medical care of a disabled person for 24 months.
Eliminating the wait for Medicare is not only the compassionate way to go for workers who are disabled and can no longer work, it is the financially responsible way to go for the taxpayers of this country.
Kevin Bambury is a senior attorney with Jeffrey Freedman Attorneys at Law, PLLC.