The Facts About Disability Insurance

March 25, 2013 at 4:02 pm

National Public Radio (NPR) is running a series of stories about the Social Security Disability Insurance (DI) program.  Its first was extremely unbalanced and repeated some of the oft-claimed myths about DI.  Here’s the truth.

DI provides modest but vital benefits to workers who become unable to perform substantial work due to a serious medical impairment, as I testified last week before a House subcommittee.

Most of the recent rise in DI’s rolls stems from demographic factors:  the aging of the baby boom generation, the growth in women’s employment, and Social Security’s rising retirement age.  In fact, when you adjust for these factors, the program has grown only modestly (see chart).  Other factors — including the economic downturn — also have contributed to the program’s growth, but its costs and caseloads are generally in line with past projections.

The typical DI beneficiary is in his or her late 50s — 70 percent are over age 50, and 30 percent are 60 or older — and suffers from a severe mental, musculoskeletal, circulatory, respiratory, or other debilitating impairment.  His or her earnings fell sharply in the years before applying to the program.  Only a minority of beneficiaries can do any work, and even fewer are able to do substantial work (enough to support themselves without help), studies generally conclude.

The Social Security trustees project that the DI trust fund — which is legally separate from the Old Age and Survivors Insurance (OASI) trust fund for the Social Security retirement and survivors’ programs — will become insolvent in 2016; the Congressional Budget Office concurs.  If policymakers do not bolster the fund, beneficiaries’ checks will have to be cut by about one-fifth after that.  But the fund’s anticipated insolvency should come as no surprise; when policymakers last changed the allocation of taxes between DI and OASI in 1994, they expected the DI fund to run dry in 2016.

Policymakers should address DI’s pending depletion in the context of overall Social Security solvency.  Both DI and OASI face fairly similar long-run shortfalls; DI simply requires action sooner.  Key features of Social Security are similar or identical for the two programs, and most DI recipients are near or even over Social Security’s early-retirement age.

Tackling DI in isolation would leave policymakers with few — and unduly harsh — options, and lead them to ignore the strong interactions between the disability and retirement programs.  A balanced solvency package would also be an opportunity to make sorely needed improvements in the needs-tested Supplemental Security Income (SSI) program, which is distinct from Social Security but has important intersections.

If policymakers don’t agree in time on a sensible solvency package, however, they should reallocate taxes between the retirement and disability funds — a traditional and noncontroversial action that they’ve taken often in the past.

And policymakers should give the Social Security Administration enough money to weed out beneficiaries who’ve recovered from their impairments — an important effort that legislators have consistently underfunded.

We’ll take a closer look at some of NPR’s other misguided claims about disability in future posts.

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More About Kathy Ruffing

Kathy Ruffing

Kathy Ruffing is a Senior Fellow at the Center on Budget and Policy Priorities, specializing in federal budget issues.

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5 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. been there #

    I have been on disability for several years. I don’t know that anything has changed but when they were trying to look me up at the local ssi office they couldn’t find me and after looking further said I am on RSDI- retirement,survivors,disability insurance. While my medications cost more than $17,000 per month, I absolutely hate hearing the excuses for disability being financial only. I was excited about obamacare making it possible for me to get private insurance finally only to find out that my condition had progressed to an all downhill state so I have to give up all hope of working again. I unfortunately do meet a lot of people who are lazy & trying to get ssi by scamming, I have even known people lazy enough to poison themselves or injur themselves to try to collect. My mother had rheumatoida arthritis and even though they owned a business, she could not get insurance and also her kids were blackballed for insurance through the business too. Finally Obamacare forces insurers to give policies, the republicans have blocked the public option making the insurers able to charge more than is affordable for an average person to be able to afford- over $1500 per month. We have to get the public option ( let us all buy into medicare) back into the healthcare law and we need a better way to police the disability system. Unfortunately I have met many people who just choose to not work because they can’t get an easy job that pays a high salary.

  2. Snoopy Black #

    I have been on disability for 20 years. Every day when I hear the NPR disability story I am incensed by the accusations.
    On Monday the NPR story WRONGLY STATED that it is impossible to be thrown off of SSDI. Social Security regularly reassesses SSDI recipients. Every 3 years (or sooner) they send out an extensive form asking in great detail ALL of my medical appointments, Rx plus refill dates, they want EVERY doctor, PT, MRI, CT Scan, date and reason for the appointment, going in reverse order for at least 3 years, sometimes 5 or more years. Most disabled people have many, many appointments. If somebody cheated the system this is where they will be found out and thrown off. Because it is not only the form that is filled out, but you have to sign a form releasing ALL of your medical records, from all the doctors and clinics you have received services from over those years.
    When abled body people see someone and immediately say, “They aren’t disabled,” because they aren’t using a wheelchair or other outwardly device, they know NOTHING. There are many severe disabilities that aren’t obvious when briefly meeting somebody. They don’t know the excruciating pain and suffering people are hiding during their brief time in public. That disabled person may have been in bed for weeks, because of their disability, and on their rare “good day,” they were outside and “looked” normal, to an able bodied person.

    The level of ignorance based in this NPR disability series is astounding.

    • been there #

      I am also on disability and fill out these forms. If you are seeing a doctor for treatment, all the info is easy to keep track of. As for the safeguard, there really isn’t one. These forms are done on the honor system and there is nobody to check on them. The only way someone ever gets flagged is if they don’t send the form in. I have met a lot of people trying to scam for disability and will be questioning me for my symptoms so they can copy. I always tell them to just tell the truth and what will happen is what is supposed to happen. they still press me for info and I lie and make up stuff. When I see them again and ask how it went, they always say the doctor said he would not make another appointment and that they need to see a psychiatrist. I can only hope that these people are weeded out in the hearing process because I sure meet a lot of them. I do worry with the culture of “poor me” and “everybody owes me” that we are living in. Perhaps if the republicans weren’t so successful in keeping generations from getting a good education or from stacking the deck against them by for example targeting the poor for crack to buy guns and elections. I pray for this country and wonder if it is too late for any of us.

  3. Noni Mausa #

    I have a relative on DI. His total income after taxes (yes, it is taxed) is $740 per month. Reducing his income by 20% would take it down to $592.

    He cannot work for multiple reasons, chief of which is that his medications cost well over double what he receives in benefits. He would need to clear around $30k a year simply to continue his current poverty level life. Plus, who will line up to hire a man in his 50s who’s been disabled since his early 20s and has no recent work history, for $30k a year?

    To CUT his income, when he has no alternative, would be unspeakable cruelty.

    • been there #

      I am also on disability and if he is being taxed it is because there is another income. especially at the income you list, ssi on it’s own is not taxable. he has to have another income or a spouse who’s income is combined. If not, he is lying to you, that information is easily found on the irs website. If he is being taxed, he would have been one of the lucky ones to have gotten the bush2 payoff checks(stimulous)$1200 , $800 , to pretend he wasn’t destroying the country. If the man’s only difficulty is experience and medication costs, there is big help in obamacare and drug companies have discount programs. There is nothing wrong with working a job in gas stations, resturants, walmart, telemarketing, medical billing etc. None of these jobs require vast experience or extensive work history. If the only trouble was medication costs, every state has programs where the gov. trains a person with health issues to work a job that will bring a liveable salary and now obamacare will make sure the medical need are fulfilled. Take with a grain of salt when people are making excuses to not work. My condition is terminal but I would gladly work if possible and did until I was forced onto ssi. It is a shame so many people are willing to live this lifestyle instead of having a real life even if difficult by going to work every day and earning a living.

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