Who Needs Medicare? Health Insurance Sources for Disability Insurance Recipients Before and After Medicare Eligibility

Social Security Disability Insurance (DI) recipients are the only individuals who qualify for Medicare, the universal health care program for retirees, before age 65. The two-year waiting period between the DI benefit award and Medicare eligibility offers an insight into the health insurance system in U.S. DI recipients are both constrained not to work and to be chronically ill or dying. Hence, this population is part of the most expensive users of the health care system but with greatly reduced access to the primary insurance provider (employer). Using the 2001 to 2008 panels of the Survey of Income and Program Participation, I document trends in the source of or lack of coverage during the waiting period, and the effect of Medicare eligibility on each form of insurance, as well as uninsurance. I estimate a measure of crowd out. This paper serves as a first-order characterization of pre-Affordable Care Act settings and offers a test for ACA effectiveness in the future.