Evaluating all Medicare plan options can reduce healthcare costs

Nearly 8 million former workers have disabilities so severe that they rely on Social Security Disability Insurance (SSDI) benefits, and an estimated 3.3 million more will apply for disability benefits this year. For these people and others suffering from serious conditions and disabilities, taking the right steps quickly to manage costs is essential for their financial and health well-being, according to Allsup, a nationwide provider of Social Security disability representation and Medicare plan selection services.

“Evaluating all Medicare plan options, including Medicare Advantage plans, can help people reduce healthcare costs”

“Most provisions in proposed healthcare reform are years away,” said Paul Gada, personal finance director for the Allsup Disability Life Planning Center. “Someone who has suffered a debilitating stroke, was in a catastrophic accident or has a chronic and worsening disease, such as Parkinson’s or diabetes, can’t wait two, three or more years for potentially improved healthcare coverage. They need to act now.”

Gada added that decisions people with disabilities make after they must stop working—including how to pay for and receive healthcare—have a significant impact down the road. He said people with disabilities should consider the following steps:

1. Keep COBRA or other health insurance coverage. If you can no longer work because of a disability and had insurance through an employer, it’s important to consider COBRA coverage. “During this time, you don’t want to go without health insurance, if possible,” he said. “You also want to make sure your coverage continues over time, avoiding a gap that might trigger a pre-existing clause and keep you out of a health plan in the future.”

Former employees (and their immediate families) may be eligible for COBRA coverage under their former employer’s group health plan if it covers 20 or more employees. COBRA is available for up to 18 months after an individual leaves the organization. This time period can be extended 11 more months if the former employee is determined by the Social Security Administration (SSA) to be disabled within the first 60 days of COBRA continuation coverage. Note: SSDI recipients become eligible for Medicare health coverage — but not until 24 months after the SSA awards them disability benefits.

Historically, COBRA coverage has been very costly, with the former employee required to pay up to 102 percent of the premium cost. However, workers who were involuntarily terminated no later than March 31, 2010, and remain with their former employer’s group health plan may be eligible for a premium price subsidy for up to 15 months. If enacted, a bill approved by the Senate on March 10 would extend the subsidy to workers involuntarily terminated through the end of 2010. Employees qualifying for the subsidy only pay 35 percent of their COBRA premiums while employers will be subsidized for the remaining 65 percent.

If COBRA or private insurance is too costly, you may qualify for Medicaid. Eligibility varies by state, but you should apply if you have limited resources and have a permanent disability based on SSDI standards or are blind. Additional coverage options include veterans assistance, and state and local health services.

2. Reduce prescription costs with drug assistance programs and generic drugs. Many people cut their health costs by not taking medication, but this can lead to additional health risks. If you are in this situation, you may be eligible for drug assistance in your state. Many drug companies and states offer assistance to lower-income individuals. Find more information on Allsup.com about drug company assistance programs and state pharmaceutical assistance programs. Switching to generic drugs also is worth investigating as it can provide a 50 to 70 percent savings, according to the U.S. Food and Drug Administration. While generic drugs have the same active ingredients as their brand-name counterparts, the inactive ingredients can differ. It’s important to first ask your doctor before using generic drugs.

3. Negotiate for reduced healthcare costs. Most individuals are reluctant to check their doctors’ charges for treatment, let alone try to receive a discount. Doing so, however, can possibly save you money. Some states offer cost-comparison information, allowing you to check the cost for a procedure offered by several providers. Ask about layaway payments or extended-payment options to give you more time. Consider shopping around for your services—check with two or more treatment centers to compare costs. “People with disabilities often have greater healthcare needs and limited income,” Gada explained. “It’s important to discuss your situation with your healthcare providers early on and explore possible help.”

4. Apply for SSDI to secure future Medicare coverage. People with disabilities who determine they will not be able to return to work should apply for Social Security disability benefits as soon as possible. Social Security disability provides regular monthly income, Medicare coverage after a 24-month waiting period, as well as other financial and healthcare benefits. Individuals who are Medicare eligible can find additional savings through their choice of plans and select Medicare Savings Programs run at state or local levels.

“Evaluating all Medicare plan options, including Medicare Advantage plans, can help people reduce healthcare costs,” said Gada, who also oversees the Allsup Medicare Advisor^®, a Medicare plan selection service for people with disabilities and seniors.

SOURCE Allsup