In 2021, approximately 13 million individuals under the age of 65 were enrolled in Social Security disability programs, which include Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). These programs supply monthly income to individuals who cannot work due to disabilities. A significant yet often overlooked advantage of qualifying for these programs is the potential access to health insurance through Medicare and Medicaid. Typically, SSI recipients automatically qualify for Medicaid, while SSDI recipients become eligible for Medicare after receiving benefits for two years. Many beneficiaries qualify for both Medicare and Medicaid, commonly referred to as dual-eligible individuals.
An analysis of Social Security Administration data from 2002 to 2022 explores enrollment trends in disability programs and the associated health coverage options through Medicare and Medicaid. Key findings from 2021 indicate that 12.9 million people qualified for Medicare or Medicaid because of their disability benefits, with approximately 4.5 million, or 35%, being dual-eligible. Additionally, about 4.8 million SSI recipients had Medicaid only, while 3.6 million SSDI recipients were covered by Medicare only.
In 2022, there were 13 million individuals under 65 receiving disability benefits, with 7.8 million relying on SSDI, 4.2 million on SSI, and 1 million on both. The enrollment of working-age adults in these programs has been on a decline since 2014, likely influenced by changes in U.S. demographics and the economy, as well as enduring effects from Social Security office closures due to the COVID-19 pandemic. This reduction in SSDI enrollment correlates with fewer individuals under 65 qualifying for Medicare based on disabilities.
Mental disorders constitute the largest segment of disabling conditions across both SSDI and SSI programs. Within the SSDI program, 30% of disabled beneficiaries have musculoskeletal conditions, followed by 16% with other mental disorders and 14% with intellectual or developmental disorders. For SSI beneficiaries, intellectual and developmental disorders are the most common (33%), followed by other mental disorders (19%) and musculoskeletal disorders (12%).
In 2022, the average monthly benefit was notably higher for SSDI recipients, nearing $1,500, compared to SSI beneficiaries, who received around $650.
In 2021, the majority of working-age adults with disabilities lacked employer-provided health coverage, emphasizing the importance of SSDI and SSI in providing access to Medicare and Medicaid health insurance. Among those 12.9 million individuals eligible for these programs based on disability benefits, more than one-third were dual-eligible, with additional breakdowns revealing that 4.8 million were SSI beneficiaries with Medicaid only, and 3.6 million were SSDI beneficiaries with Medicare only.
Individuals under 65 typically qualify for Medicare after receiving SSDI for 24 months. As of 2021, 8.3 million individuals under 65 were on Medicare due to disabilities, with the majority qualifying through SSDI. The Medicare waiting period can lead to coverage gaps, particularly affecting those awaiting SSDI benefits.
Research indicates varying levels of satisfaction among Medicare beneficiaries, with younger individuals with disabilities expressing lower satisfaction compared to older adults. Factors contributing to these disparities may include the original design of Medicare, which catered to older adults, and the health challenges faced by those under 65.
In 2021, 6.5 million people qualified for Medicaid through SSI, with states having the discretion to impose stricter eligibility criteria.
The differences between SSDI and SSI are noteworthy, as SSI is income-based and available to individuals without prior work history, while SSDI requires a qualifying work record.
Enrollment in the SSDI and SSI programs rose from the early 2000s until 2014 but has since declined, reflecting shifts in demographics and labor force participation rates. The application process for these programs is complex and lengthy, with many applicants experiencing initial rejections but pursuing further appeal processes for approval. Recent initiatives by the Biden-Harris Administration aim to boost the Social Security Administration’s budget to enhance service delivery, reduce wait times, and streamline the application processes.
Common conditions leading to qualification for Social Security disability benefits include diseases of the musculoskeletal system and mental disorders. The average monthly SSDI benefit significantly surpasses that of SSI recipients, highlighting disparities in income among beneficiaries. Furthermore, many beneficiaries are currently facing reductions due to overpayment issues, prompting new policies to alleviate the financial impact on disabled individuals.