SSDI Beneficiaries' Medicaid Expenditures: During the Medicare Waiting Period and Beyond

The Medicare waiting period limits access to health care for Social Security Disability Insurance (SSDI) beneficiaries, and possibly affects their health status. To understand the consequences of eliminating the waiting period, policymakers need to know the health care expenditures of SSDI beneficiaries who are waiting for Medicare coverage to begin. Using a unique dataset of merged Medicaid claims data and SSA administrative data, we compare the Medicaid expenditures (overall and by type of service) of SSDI beneficiaries on Medicaid who were in the Medicare waiting period during the entire study period (the “full waiting period cohort”) to those who became eligible for Medicare during the study period (the “partial waiting period cohort”). For the full waiting period cohort, Medicaid expenditures per person per month enrolled averaged $1,108 during 1999 and increased to $1,285 per month in 2000. For the partial waiting period cohort, per person per month Medicaid expenditures dropped from $1,065 in 1999 to $797 during 2000, after individuals became eligible for Medicare. We estimate Medicaid spent nearly $500 per person per month on services that would have been covered by Medicare (such as hospital services) if there were no Medicare waiting period in 2000; if the waiting period were eliminated in 2007, Medicare Part D would also presumably cover most of the $277 per month that Medicaid spent on prescription drugs. Eliminating the waiting period would be costly to Medicare, but would reduce the burden on uninsured SSDI beneficiaries, and lead to a modest decrease in Medicaid expenditures.