Disabled workers face painful benefits gap

WASHINGTON — Master toolmaker John McClain built machine parts with details so small they couldn't be seen with the naked eye. Then a lump on his neck turned out to be cancer.

Shalonda Frederick managed a bakery and decorated cakes for special occasions. One day her face and hands, and her arms and legs, started clenching up. Then she fell off a ladder at work. It turned out to be multiple sclerosis.

McClain, 56, and Frederick, 33, are unlucky enough to have gotten seriously ill in their most productive years. Theirs is a daily struggle against life-changing circumstances.

As if that weren't enough, after years of counting on employer medical benefits, they are uninsured — and trapped in one of the most troubling gaps in the nation's health-care system.

After reviewing their cases, the government declared McClain and Frederick too sick to work and started issuing them monthly Social Security disability checks. Then they found out they'd have to wait two years to get health care through Medicare. Even though workers and their employers pay the payroll taxes that fund Medicare, federal law requires disabled workers to wait 24 months before they can begin receiving benefits.

McClain and Frederick are not alone. About 1.8 million disabled workers are languishing in Medicare limbo at any given time. Up to one-third of those waiting are uninsured. About one in eight dies waiting.

Frederick needs an expensive injection to control her symptoms; McClain, a scan of a new — and potentially problematic — spot. Neither can afford it. Instead, they fend off creditors, sink deeper into debt and fume that a system they paid into all those years isn't available when they need it.

"The government is the screwiest insurance company I ever saw," said McClain, of Allen, Texas. "What is it that I was paying for out of my check every pay period? They have taken the charge for Medicare out of my paycheck, and now that I need it, I can't have it."

Repeal at hand?

With President-elect Obama promising to guarantee health-care coverage for all, advocates for the disabled are hoping that repeal of the Medicare waiting period is finally at hand.

"The current law is really indefensible," said Sen. Jeff Bingaman, D-N.M. "There is no logic behind requiring people who are determined to be disabled to wait two years before they become eligible for Medicare." Bingaman introduced a bill to phase out the waiting period, and as a senator Obama co-sponsored it.

It turns out there is a simple explanation for the waiting period: cost.

In 1972, Congress and President Nixon agreed to expand Medicare to cover not only seniors but the disabled. They created a waiting period to minimize costs and discourage people from gaming the system.

Consequences grow

Over time, the consequences of the waiting period and the costs of repeal have grown.

In the 1970s, there wasn't a lot medical science could do for many cancer patients. Now cancer is thought of as a manageable disease.

But as drugs and treatments for serious illnesses have improved, the cost of closing the Medicare gap has ballooned. Estimates range up to $12 billion a year. And that gives lawmakers pause.

"When it comes to people dying of cancer, you can't help but be sympathetic," said Sen. Charles Grassley, R-Iowa. "But at a time when we have a big downturn in the economy, it may be questionable what can be done in a lot of these areas." Grassley, the senior Republican on the Senate committee that oversees Medicare, said he hadn't made up his mind about a repeal of the waiting period.

A compromise that could save taxpayers money would be to subsidize a continuation of employer coverage for disabled workers during the 24-month wait. Many can keep their benefits now, provided they pay the full premium, which not all can afford.

But that wouldn't help those without job-based coverage.

The government already exempts people who need kidney dialysis and those with Lou Gehrig's disease from the waiting period.

Nearly 7 million disabled people younger than 65 are covered through Medicare.

Of those waiting for coverage, about 60 percent manage to hang on to private insurance. Many draw down their retirement savings to pay premiums through a previous employer's health plan. Others fall into poverty and are picked up by Medicaid. Up to one in three, like McClain and Frederick, wind up uninsured.

McClain was diagnosed with cancer — a tumor on his left tonsil — a little more than two years ago.

His cancer treatment has been arduous: Chemotherapy. Radiation. A feeding tube. Bouts of depression and anxiety. His weight dropped from about 150 pounds to 116. But the cancer seems to be retreating.

McClain has begun to feel his energy come back, yet he is worried about a small area in his throat. And he can't afford to pay for a scan because he lost his insurance at the end of October.

"I think I have around $22 in savings," he said.

Slipping into bankruptcy

Like McClain, Frederick, the former bakery manager, is spiraling toward bankruptcy.

Multiple sclerosis (MS) is a progressive disease in which the immune system attacks the protective covering around the nerves. It can lead to paralysis. Frederick was diagnosed in 2002.

"My MS affects my mobility," said Frederick, of Glen Burnie, Md.

She had to leave the bakery because her hands shook too much to decorate cakes. In fall 2007, she lost her fallback job as an event planner. Even with her disability check, she is behind on rent and utilities. Without health insurance, she can't afford an injection that costs about $3,000 each time and helps control her MS. She is supposed to get a treatment every three months. Her last was in July.

"They tell you to go to school and graduate and get a career," Frederick said. "I was employed from when I was 15 to when I was 32. I worked my whole life and I paid into this fund."