With all the news about the trials and tribulations of ObamaCare and the seriously-underfunded Social Security retirement fund, it seems that serious problems with an important part of our social safety net is being overlooked by those reporting on such topics – the Social Security Disability Insurance (SSDI) program. I’m writing the post not from the point of view of fixing the program, because this seemingly-unsolvable task is way above my pay grade. I’m writing it from a “sky is falling” point of view, so you will look at private individual disability insurance as a necessity, rather than a luxury.
Media outlets that I know of that are reporting on the subject include CBS’ 60 Minutes and NPR’s Planet Money. The 60 Minutes show, titled Disability USA, which aired on October 6, 2013, claims that a significant number of people are exploiting the system which, if this behavior continues unchecked, will lead to the ultimate collapse of the program. It would be the first government program in the U.S. to run out of money.
According to 60 Minutes, the Federal Disability program serves nearly 12 million people – up 20 percent in the last six years, and has a budget of $135 billion. That’s more than the government spent last year on the Department of Homeland Security, the Justice Department and the Labor Department combined. That’s a far cry from the program founders’ original intention when they established it in 1950. It wasn’t originally set up to be the massive program it is today, but rather one that would assist people who were truly unable to work due to injury or illness.
The program has been growing in leaps and bounds. Since the early 1990′s, the number of people has nearly doubled, growing to about 8.5 million. Add in children and spouses who also receive checks and the numbers swell to about 11.5 million. According to NPR’s Planet Money’s piece, Unfit for Work, more than 5 percent of all eligible adults are now receiving benefits, up from about 3 percent twenty years ago. Where is this growth coming from? Are there that many more people disabled today than there were 20 years ago? Are we sicker today, even with all the advances in modern medicine?
The Social Security Administration, which runs the disability program, says that the explosive surge is due to the combination of aging baby boomers and the lingering effects of a bad economy. Part of the problem, according to Senator Tom Coburn of Oklahoma, is this program has been turned into a “de facto welfare program” for middle aged, blue collar workers.
There are certainly many people receiving disability benefits who deserve them and I have no problem with people receiving benefits who should be. However, what has happened is a perfect storm of sorts – qualifying for disability benefits has become much easier at a time when getting and holding a job has become more difficult.
Recipients must now only prove that they are too physically or mentally impaired to perform any kind of work. Therefore, it’s no wonder that self-reported health problems, such as “back pain” and mental disorders, which require only subjective diagnosis (no blood tests or x-rays, etc. are needed as proof) have become the leading claims for Social Security Disability Insurance.
According to the 60 Minutes report, the weakness in the system is being exploited by folks with marginal claims and attorneys pumping out advertising to these people, in order to help them beat the system. Many of these firms are making millions of dollars from fighting Social Security Disability claims. Please note that I am not speaking of the many fine attorneys out there who help people fight legitimate claims. I’m talking about those that have found out “legitimate” ways to beat the system.
The system is obviously broken and I don’t have any great hopes that our government can fix it. It’s moving like a runaway train and, at this point, the brakes aren’t going to stop it. As I advise people not to count on Social Security for their retirement, I do the same regarding disability insurance – protect your income from illness or injury with a good individual disability policy from a solid insurance company. If you need some assistance with that, ProtectYourIncome.com is here to help.
Original article: The Social Security Disability Insurance Safety Net is Ripping
©2013 ProtectYourIncome.com. All Rights Reserved.
