Disability in America
America's problem is the freeloaders that live off your taxes. America's problem is that we are not doing enough for our disabled and poor. What really is America's problem? I found myself wrestling with this very question recently. National Public Radio (NPR) recently aired Unfit for Work, a report by Chana Joffe-Walt about the rise of disability in America and its growing cost. This inspired me to look deeper into the "disability problem" or lack there of.
What is Disability?
Social security programs started out as limited financial support for poorhouses, an early solution to one of young America’s early problems. According to the Social Security Administration(SSA) these houses were purposefully kept unpleasant as possible in order to discourage dependency. With the arrival of the Great Depression an increasing amount of people were crying out for the government to provide support for those stricken with poverty. . The government was split between providing more support and risking an America dependent on welfare programs or providing nothing and for those in need. The answer finally came August 14th, 1935; the Social Security is signed into law. Roosevelt’s Social security program did not cover medical expenses or disabilities but was the first step to becoming the program it is today. It was not until 1954 that disability insurance program was added to the Social Security program. At this time it did not provide any cash benefits but prevented the reduction of retirement benefits due to disability. The first cash pay out for disability benefits came in 1960 when 559,000 people received a check for an average of 80$ a month. When compared to 2003, $100 from 1960 would be worth $502.09 today, which amounts to less than half of today's current monthly benefit payments without medical insurance (GDP- Calculations). The current solution to this never-ending social security problem is the Social Security Income program SSI. While on disability claimants receive a monthly check and Medicare coverage.
Social security and the government define disability as the inability to do gainful work due to an impairment (Griffin, 147). This is confirmed by a five-step analysis. The first four steps are done at the state level the final fifth step is analyzed by the federal program the SSA. Step one determines if the claimant is doing gainful (physical or mental) work for pay. If so for most wages above the national minimum the claimant will not receive disability. The second step determines the severity of the impairment. This step usually involves a doctor recommending the claimant for the disability program as evidence. If the disability is severe the next step is to check the SSA's Listing of Impairments. If the impairment is listed equals or exceeds the impairment of the claimant, they are found to have a disability. Contrary if the impairment is not listed step four will determine if the claimant can no longer perform past relevant work. For the final step a Commissioner will attempt to prove that the claimant can perform gainful work, if the Commissioner cannot the claimant is entitled to disability benefits (Griffin, 147). Even after all five steps the claimant may attempt a review in court. For more detailed information this pamphlet produced by the SSA was really helpful in explaining the process.
NPR’s Unfit for Work paints a grim picture of rapidly increasing disability claims and states that the program leads to cyclical poverty. The report states that 14 million people receive a monthly disability check. According to the Social Security Administration (SSA) for the month of February this year, 65,929,000,000 dollars were spent on Social Security Income (SSI) 41.4 percent of which went to disability benefits. Those benefits paid for disability insurance payments, checks for disabled workers, spouses, and children. That mind numbingly large number amounts to just 1,129.81 dollars a month on average for a disabled workers check. The average cost of a one-bedroom apartment is 700$ according to (Living Cost), this leaves little room for expenses.
“The reserves in the disability insurance program are on track to run out in 2016, Steve Goss, the chief actuary at Social Security” (Unfit for Work). We have seen a rapid increase in the growth of the Disability Insurance enrollment over the past twenty years, seventy percent from 1983 to 2005(MIT Journal), and it logical to assume that as the baby boomer generation gets older the rate of increase will continue to go up.
The cost is not the only issue. Those on disability are not factored into the unemployment statistics, making the unemployment rate seem lower than it is in actuality. As well as those that are on disability are doomed to a life of poverty and many that do get on disability never get off. In 1983 persons who exited the disability program was 12.1% in 2004 this statistic was just 7.2% (MIT Journal). In the Unfit for Work report by Chana she recounts an interview with a lady named Ethel Thomas. Thomas suffers from severe back pain, which is why she cannot work jobs that require her to stand on her feet. Chana asks Ethel if she tried to find a job that would not require her to stand. Thomas is unable to think of a job that would not cause her back pain. This excerpt gets an essential problem with the current disability program, that it does not encourage or provide tools for people to get off of the program.
The appeal for a denied disability claim is held in a courtroom. The appeal is a judge who represents the government against a claimant who is usually accompanied by an attorney. The likelihood of the claimant gaining benefits from the government goes from 46% to 73% just by having an appeal (Benitez-Silva , 147) . An entirely new field of litigation has sprung up for representing disabled clients. You may have seen a commercial for Binder and Binder; they are the largest firm for representing clients in these appeals. The claimant does not pay the lawyer when they gain disability status, the government does. Disability lawyers are paid in “back pay.” Back pay is benefits that should have been paid to the claimant had they received disability on their first attempt. The lawyer’s pay is limited to 25% of the total or $6000 of the back pay. The claimant pays no out of pocket fees (for more info).
The Disability program has grown too expansive, it is imperative that the program shorten the average length of time benefits are available to encourage claimants to seek employment. A tightening of the screening process to eliminate fraud and discourage those that can work from the program is necessary.
Many people rely on monthly checks and health benefits from the government, if this well runs dry a large amount of people will be without basic necessities. President Obama approved a 689.8 billion dollar defense budget to congress in 2012 (Defense Budget). America’s defense budget is larger than the next ten largest defense budgets of other countries combined. Perhaps just some of this money could go to the ever-growing disability program.
The Ticket to Work program is the latest solution to increasing the percentage of those exiting the disability program. The goal is to reduce the reliance on disability benefits and support the re-entrance into the workforce. The program allows the claimant to go to work without losing benefits and or healthcare for a determined amount of time. It is a win-win solution, because it allows the claimant to gain a foothold financially while costing the government and the taxpayers less in the long run. The government’s overview of the program can be found here. Currently this program is inefficient; fewer than 1,140 claimants have achieved successful workforce integration (MIT Journal). I believe if it were paired with a rehabilitation effort it would be successful at increasing the exit rate.
More rigorous screening will slow the growth of the Disability for hard to prove impairments such as mental disorders and pain. Pain and mental disorders represent a wide range of impairments; a more defined list of what does and does not count will lower fraud and enrollment. The reason for more stringent screening is to filter out cases mentioned in NPR's report of unemployed persons using disability as an unemployment safety net.The counter to this is that stricter screening will bring political strife and may not be a feasible law reform.
Currently there is not an attorney at claimant appeals for disability benefits that represents the Social Security Administration. An entire industry of disability litigation has risen to represent the claimant in these appeals. The SAA losses nearly three fourths of all the cases brought against it. The image below is from the report by Hugo Benitez-Silva backs up the (MIT Journal) statistic. An attorney representative is needed to represent the interest of the government (MIT Journal).
Call to action
It should be obvious that something must be done to protect the taxpayers while insuring a future for those that cannot insure a future for themselves. There needs to be new laws to motivate those on disability to find jobs and rehabilitation, instead of trapping them in cyclical poverty. As a society we need to support those that cannot support themselves but it makes no sense if we do not have a plan. We need to appropriate money to programs that make sense and improve or remove the ones that do not. I do not believe lazy people are bogging us as a society down. I believe that with proper litigation, legislation, and motivation we can create a better America. Please if you also feel that there is room for improvement of the current Social Security laws contact your local congressman.
Benı́tez-Silva, Hugo ; Buchinsky, Moshe ; Chan, Hiu Man ; Rust, John ; Sheidvasser, Sofia [Peer Reviewed Journal]
Griffin, Oren R. Law and Psychology Review, Annual, 2012, Vol.36, p.147(44) [Peer Reviewed Journal]