Publications
Tracking health insurance and financial security of disability applicants
2025
Kaufman, J., Manalel, J., Tipaldo, J.F., Finkelstein, R., & Yin, N. (2025).Tracking health insurance and financial security of disability applicants. New York Retirement and Disability Research Center R-NY2405-010425F.
Jennie Kaufman, Jasmine Manalel and Ruth Finkelstein
Social Security Disability Insurance (DI) and Supplemental Security Income (SSI) offer crucial support after disability onset, but the application process is lengthy and complex, including a 24-month Medicare waiting period after DI eligibility. SSI beneficiaries are eligible for Medicaid without a waiting period. Without insurance while they wait, applicants may face worsening health and financial insecurity, exacerbating pre-existing disparities. This study asks: How do health insurance and financial security change before and after disability application or rejection? What role do disability benefits play in health outcomes and medical costs? Using panel data from the Health and Retirement Study (HRS) linked to Social Security Administration disability records, this study examines DI and SSI applicants aged 51-64 (N = 1261). It tracks health insurance coverage, health status, poverty, and out-of-pocket medical expenses across three waves of the HRS, from up to two years before the disability decision to up to four years after the decision. The study also examines coverage status before and after the Affordable Care Act (ACA).
We find that by the third wave, more than 90% of individuals receiving disability benefits had insurance, compared with 75% of those whose applications were rejected. Up to two years before the disability decision, the percentages were much lower, ranging from 38% of those later accept ed to SSI to 68% of those later accepted to DI. Given the importance of health insurance following the onset of disability, this is a notable gain. We find that insurance rates before and immediately after the decision were substantially higher in the post-ACA period compared with the earlier period, suggesting that the ACA mitigated the lack of insurance. Disability decisions had few significant associations with self-reported health or poverty levels. Out-of-pocket medical expenses varied more by disability program than by time; costs were significantly higher for the group accepted to DI than for the other groups, spiking within two years of the decision, during the Medicare waiting period. Overall, disability benefits were effective in their role as a safety net as far as health insurance is concerned, particularly by providing Medicaid eligibility.