Medicare Supplement Coverage for Disabled Beneficiaries

What Triggers Medicare Eligibility?

Most people first qualify to become a Medicare beneficiary when they turn age 65.  Upon approaching that magical age, they may have images of a retirement spent relaxing on a beach and receiving free healthcare dancing through their minds!

But of course, this isn’t everybody.

There are many people who begin receiving Medicare benefits prior to age 65. These folks gain access to Medicare benefits through three main channels:

1.     They’ve been receiving Social Security disability benefits for the past 24 months;

2.     They’ve been diagnosed with End-Stage Renal Disease (“ESRD”) and have been undergoing dialysis treatment for the past 3 months (or received a kidney transplant); or

3.     They’ve been diagnosed with Amyotrophic Lateral Sclerosis (“ALS”) and have begun receiving Social Security disability benefits.

According to MedPac[1], the Under 65 beneficiaries account for approximately 13% of all Medicare beneficiaries and about 21% of all Medicare spending.

[1] https://www.medpac.gov/wp-content/uploads/2024/07/July2024_MedPAC_DataBook_SEC.pdf  Section 2 includes details on Medicare Beneficiary Demographics.

Is Medicare Supplement Coverage Widely Available?

As noted above, the Under 65 class of Medicare beneficiaries account for a disproportionate share of Medicare spending.  In other words, they have higher average health care expenses than individuals that qualify for Medicare coverage when they turn age 65.

Because of these higher health care expenses many insurance companies would prefer to not cover them on their Medicare Supplement plans if they don’t have to (or if they aren’t able to charge an adequate premium for the coverage).

There currently is no federal rule or regulation that requires companies to offer Medicare Supplement coverage to Under 65 Medicare beneficiaries, so the decision to implement coverage requirements rests with each state.

The following map shows Medicare Supplement coverage requirements as of September 2024.  Currently:

• 23 states require carriers to offer their Medicare Supplement plans to the Under 65 population.

• 13 states require carriers to offer some minimum set of plans.

• In addition, several states have legislation pending to either implement or expand coverage requirements.

Are Premiums Affordable?

Another consideration when looking at the Under 65 Medicare Supplement market is the rate level at which the plans are available.  Often, just because coverage is available doesn’t mean that it’s also affordable.

Just as states have taken varied approaches at which plans are required to be made available, there are also different ways that states have sought to make coverage affordable. Some states will implement caps on the premiums within their regulations and some have softer rules they follow when reviewing proposed rate filings.

Within the table below we’ve grouped the states based on their application of rating rules that result in the Under 65 premiums being less than 250% of the Age 65 premiums.  There are currently 22 states that have this type of restriction on at least one of the required Medicare Supplement plans and 14 states that allow carriers to charge higher rates on their plans.

In addition to plan availability and rate limits, there are other operational items that companies should consider when making their plans available to the Under 65 market.  You will want to have solid payment processing practices in place and be paying compensation that is both compliant and in-line with other market participants.


If you have any questions about managing your Under 65 Medicare Supplement plans don’t hesitate to contact us at info@telosactuarial.com.

And don’t forget to download any of our Medicare Supplement market reports from the Telos Actuarial store.