While you’re taking your lunch break today, be sure to check out this Daniel Horowitz commentary on Conservative Review, titled, “The Curious Case of Exploding Disability Claimants.” He discusses the suspicious pattern of cost increases out-growing enrollment increases in the federal Social Security Disability Insurance program. (A government program that costs more than it should cost… shocker!)
Here is a quick preview:
“Federal Government Overpays $17 billion in Disability Payments.” Most people probably never bothered to click on articles with headlines like this; after all there is nothing new, this is a federal program and we’ve come to expect nothing less than rampant fraud and abuse. However, the disability program is particularly rife with waste and a recent report by the Office of the Inspector General offers a great opportunity for conservatives to demand reforms. The Social Security Disability Insurance program (SSDI) is the basket case of all federal programs. What’s worse? The waste and abuse has knowingly continued unfettered by any real attempt to address the problem over the years.
In 1956, Congress created the Social Security Disability Insurance (SSDI) program. Even though workers were originally promised that their payroll taxes would be exclusively purveying retirement benefits, a percentage of that tax revenue was diverted towards the disability program. Throughout the ensuing decades the scope of eligibility for the program expanded from those over 50 years old to all ages plus children and spouses of disabled workers. Eligibility standards were also consistently liberalized.
By 1998, there were 6.3 million individuals receiving disability benefits, at the cost of $47.7 million a year. By the end of 2014, the program had exploded to $141 billion, servicing almost 11 million individuals with an average monthly payment of $1,165 per disabled worker. Disability insurance now accounts for 17% of the cost of Social Security. The cost for SSDI also dramatically affects Medicare. All SSDI recipients are automatically eligible for Medicare after two years. According to CBO, the Medicare cost for those on disability is more than 80% of the underlying program. That would mean Medicare costs could exceed $112 billion a year for those on disability.
The obvious question is how can enrollment in a disability program increase by 72% in just 15 years? The fact that there were several deep economic downturns doesn’t explain the increase in disabilities as it would the increase in food stamps and unemployment benefits. Workers don’t have more of a propensity to incur permanent disabilities during bad economic times.
Moreover, how is it that the cost of the program has increased by almost 200% if enrollment *only* increased by 72%?