Editor – President Obama’s discussion of disability reform usually becomes reduced to a discussion of fraud. This five part series from the New York Times, looks at the issues from the viewpoint of experts.
Third in a five part series – previous article Welfare Reform as a Model
Identifying Who Is Disabled
Gary Burtless, a former Labor Department economist, is a senior fellow at the Brookings Institution.
One of the most difficult administrative tasks faced by the Social Security Administration is distinguishing between disabled and nondisabled workers.
In 2006 slightly more than 2 million workers applied for Disability Insurance benefits. About 550,000 applicants were found to be disabled and were awarded a benefit in that year. Almost the same number were initially denied benefits because they were not deemed to be medically disabled. Many other applicants were denied benefits for nonmedical reasons, and about 300,000 applicants did not receive an immediate ruling on their application.
A little more than half the applicants for federal disability insurance ultimately succeed in getting benefits.
Many applicants who are initially denied benefits file an appeal. A large percentage of these appeals are ultimately successful. A little more than half of applicants ultimately receive benefits. The appeals process is both time-consuming and costly. Many applicants who are eventually successful in their appeals may wait for years before receiving a favorable ruling.
The cost of the application and appeals process stems from the inherent difficulty of determining who is too disabled to work. Many disabled workers are initially judged to be nondisabled, and of course some nondisabled applicants end up collecting benefits. Statistics published by the Social Security Administration suggest that the standards for determining disability vary greatly from one state to the next.
The federal government can certainly reduce the disability rolls and the cost of the disability program by conducting more frequent and tough-minded reviews of recipients’ disability status. There will be collateral damage, however. The reviews will impose real hardship on some disabled workers whose cases are reviewed.
It makes sense to conduct the reviews, but it would be sensible to focus reviews on workers with medical conditions that are most likely to improve. Resources should also be concentrated in parts of the country where statistics suggest that error rates are highest.
Next in the series – Federal Money, State Control