Disabled and Uninsured: Why Obamacare Has Not Solved the Problem in Texas

When it comes to medical insurance, disabled Texans are in a tough spot. While most employers are required to offer COBRA medical insurance coverage to departing employees, COBRA premiums are not “subsidized” and therefore allow the employer to charge the departing employee the full cost of the extended medical insurance. Over the years I have been astounded at the high monthly premiums my clients indicate are required to access COBRA extended benefits. Invariably when I talk with a potentional social security disability client in Dallas Texas who has declined COBRA medical insurance benefits they indicate the premiums were “too expensive”. While I wish I had been able to talk with them before they declined COBRA, as I am sure most Texas disabled workers do not understand how important medical treatment is to winning a social security disability case, it is clear that COBRA is usually not affordable for those out of work.

Medical insurance for disabled Texans is a classic “Catch 22”. Catch 22 is a wonderful term originating with Joseph Heller’s book Catch-22 depicting the absurbities and contradictions of life.  Wikepedia gives the following example of a Catch 22: “losing something is typically a conventional problem; to solve it, one looks for the lost item until one finds it. But if the thing lost is one’s glasses, one can’t see to look for them.”  In the case of social security disability, medical treatment for the disabling condition is necessary in order to win a social security disability claim. Medical insurance is the primary means of accessing today’s expensive medical treatment. Social security disability recepients are entitled to Medicare after 24 months of entitlement to social security disability benefits. Many that I speak with daily in Dallas Fort Worth tell me their primary goal in seeking social security disability is to secure Medicare. The problem is that they are without medical insurance because they not working, and therefore cannot succeed in their disability case. In other words, they need medical insurance to secure medical insurance (Medicare)!

I was hopeful when the Affordable Care Act rolled out that many of my uninsured clients could secure medical insurance, and many did. But the ACA has not solved the problem I see here in Dallas Texas, and these are my thoughts on why:

  1. General Texas hostility to “Obamacare”  Texas is about as red as state as there is, and we carry a deep suspicion of “big government”. Some have told me they did not apply for ACA medical insurance because of this distrust. One person I spoke with last year told me he abandoned the application for ACA coverage when the online application asked him whether he owned any guns. He reasoned this information would allow the government to come for his guns! I have not verifed this question is indeed asked on the healthcare.gov website, but if it is I suspect this information is sought to examine any correlation between gun ownership and health. In any event it would be a stupid question to ask, and indeed support those “red staters” who see the federal government as too intrusive.
  1. The “Coverage Gap”. This is not, I think, a “Catch 22”: more like a cluster…well you get my drift. The above infographic by the Henry Kaiser Foundation is helpful to understand this problem unique to states – like Texas – that rejected the expansion of Medicaid under the ACA. The ACA provided for the expansion of Medicaid by states above current income levels and therefore provided for federal medical insurance subsidies only for those at the federal poverty income level and up to 400% of that amount. Medicaid was supposed to cover those under the federal poverty level. But the US Supreme Court struck down the ACA provision that required states to expand Medicaid and ruled that states were free to reject Medicaid expansion. Texas governor Rick Perry wasted no time in rejecting Medicaid expansion under the ACA. The result? Adults that fall into the “coverage gap” of having incomes above Medicaid eligibility limits but below the lower limit for Marketplace premium tax credits get no help! Because ACA intended for state Medicaid to help this segment of the population, this group of Texans make too little, not too much, to get ACA premium subsidies. Kaiser estimates that  948,000 Texans are in this “coverage gap”. 
  1. High deductibles and copays.   ACA premiums that are subsidized have been described as “dirt cheap”. The above chart, however, indicates that ACA rates for 2015 in Dallas Fort Worth are likley to increase up to 10%. The state of Texas has elected not to expand Medicaid under the ACA. Therefore even Texans earning above the federal poverty line of $11,670 for an individual may also receive subsidies to purchase insurance on the ACA marketplaces. Yet despite these subsidizes, there are still deductibles and co-pays to deal with. ACA coverage for 2015 provides for an out-of-pocket limit of $6,600 for an individual, and $13,200 for a family. For someone with a serious medical condition (i.e., a person unable to work due to a medical condition) it is easy to spend up to the out-of-pocket limit. Few disabled Texans that are unable to work can afford to spend over $6000 a year in out-of-pocket medical expenses.

Open enrollment for the ACA in 2015 starts today. Despite the limitations of the ACA, I encourage all disabled Texans without medical insurance to examine their options well before ACA enrollment closes on February 15, 2015. The individual mandate penalty for those not securing medical insurance is unlikely to affect the disabled as there are a number of exemptions for those with very low incomes.


Top 5 Surprising and Puzzling Facts about Social Security Disability

  1. Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) based upon disability.

    There is widespread confusion about these 2 major programs for disabled Americans. The confusion may arise because they are completely different in some areas, and exactly the same in other areas. First the differences. It helps to know that SSDI is an “entitlement” program whereas SSI is a welfare program. SSDI is not “needs based”, but a right based upon payroll tax contributions. SSDI does not consider income or resources in determining benefit payment amounts, but SSI benefits are not available to those with more than $2000 in “resources” and is reduced dollar-for-dollar because of any income. In short SSI is limited to the “indigent”. But if Dallas billionaire Mark Cuban became disabled he could collect SSDI benefits. There are more odd differences between SSDI and SSI: Medicaid benefits are available to SSI recipients, and Medicare is available to SSDI recipients. But the definition of a disability for SSDI and SSI is exactly the same.

  2. 12 month duration requirement.

    If you listen to much ultra-conservative media you might think qualifying for social security disability is a piece of cake. Many are surprised that in order to qualify for disability benefits you must have been disabled for at least 1 year or your disability is expected to last at least 1 year. This requirement often discourages those recently out of work due to a disability from filing, choosing unwisely to wait until 12 months have passed. The problem with this choice is that it takes a long time to qualify for disability benefits. The odd reality is that disability applications within a year of leaving work due to a disability are routinely denied based upon the “duration requirement”. Due to the lengthy approval time, however, it makes sense to file a claim for social security disability unless your doctor expects a swift recovery and return to work.

  3. 24 month waiting period for Medicare.

    For many disabled workers applying for SSDI benefits, the entitlement to Medicare can be as if not more important as the monthly benefit checks. Yet Americans are surprised to learn that there is a 24 month waiting period for Medicare benefits. This unfortunate feature of the law seems counterproductive, as early medical treatment can often mean a return to work. What is even odder is that Medicaid eligibility under the SSI program has no waiting period.

  4. 5 month waiting period for SSDI benefits.

    There are no disability benefits payable for the first 5 months of disability. This feature can be analogized to a medical insurance deductible, and is certainly not consistent with the Fox News portrayal of disabled Americans “living large” on the program.

  5. Offset for Worker’s Compensation Benefits.

    As pointed out above, SSDI benefits do not take income or resources into account in determining monthly benefits. The one odd and puzzling exception is when an SSDI applicant is receiving state Worker’s Compensation benefits. Worker Compensation over a given amount -an amount which is determined in relation to the claimant’s projected SSDI benefit amount- reduce the SSDI benefit payable on a dollar-for-dollar basis. This often leads disabled Americans workers to wait to file for social security disability until the Worker’s Compensation has ended. Just like the decision to wait for 12 months mentioned above, this is an unwise strategy. A better choice is to have disability entitlement “in place” (i.e., secure an approval of disability benefits) while continuing to receive Worker’s Compensation. Though no disability benefits are being paid due to the Worker’s Compensation, once the latter benefits stop, payment of social security disability benefits can begin. Unfortunately, because social security disability attorney payment is based upon past due benefits, it is harder for those getting Worker’s Compensation to retain an attorney on their social security disability case.

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