Big news for Hoosiers under 65 on Medicare
/I know what you are probably thinking, “Wait. Don’t you have to be at least 65 to be on Medicare?” In general, the answer is yes. However, those on Social Security disability are automatically enrolled in Medicare after two years, regardless of age. And according to the Annual Statistical Report on the Social Security Disability Insurance Program, 2023 report, somewhere between 4% and 4.9% of Hoosiers are disabled and receiving Social Security payments.
To this point, only Medicare Advantage plans were available to this group, but that changed effective July 1, 2024, because of SEA 215, a new law passed this year. Now, new Medicare enrollees under age 65 in the state of Indiana have the option to sign up for a Medigap policy under traditional Medicare.
A special guaranteed issue right enrollment period for existing Advantage policy holders runs 1/1/25 through 6/30/25. The 6-month guaranteed enrollment period for future individuals newly starting on disability opens at their Medicare eligibility. After this initial guaranteed enrollment period, medical underwriting is necessary to make the move from an Advantage plan to a Medigap policy, making a change unlikely.
During this enrollment window, premiums for plans A, B and D are capped at no more than the age 65 rate for the same gender, zip code and tobacco use. Premiums for other Medigap plans are capped at 200% of the age 65 rate.
The opportunity to switch from an Advantage plan or change Medigap plan letters comes back around at the normal age 65 guaranteed enrollment period.
Although there are many benefits to an Advantage plan, the flexibility of traditional Medicare warrants serious consideration. With a Medigap policy, insureds are free to see any doctor in the country that takes Medicare. That means those with an uncommon diagnosis can seek treatment from specialists nationwide rather than the limited network available through an Advantage plan. In addition, those who spend a material amount of time out of the state can seek treatment without fear of out-of-network expenses.
As many of you may know, my husband had a stroke 10 years ago resulting in his disability, so he is one of the many Hoosiers that this new law may benefit. We will be reviewing his coverage and considering the Medigap route. If you know someone under age 65 on Social Security disability, I encourage you to alert them to this big change. My experience has shown that most Medicare insurance agents are not yet aware of this opportunity, so it won’t likely be considered automatically.
- Juli Erhart-Graves, CFP®, Worley Erhart-Graves Financial Advisors
