Disabled face steep benefit cuts as federal program runs out of cash

The Social Security Disability Insurance (SSDI) program will run dry in 2016 and 14 million disabled Americans could face a benefit cut of nearly 20 percent, if lawmakers don’t make drastic changes.

Despite continued talk about reforms, little has been done so far to head off the impending disaster. But last week the Social Security Administration (SSA) announced it will seek public input about how changes in technology and factors such as age, education, and work experience should affect eligibility decisions.

Six decades ago, lawmakers designed the SSDI program as a safety net for those who cannot work due to a disability, but the program has become rife with inaccuracies and fraud, Sen. James Lankford, R-Okla., wrote in a recent opinion piece.

In 1978, Congress added non-medical factors such as age, lack of education, and inability to speak English to the eligibility criteria. Today, 43 percent of SSDI awards are based on these factors, Rachel Greszler, senior policy analyst in economics and entitlements at The Heritage Foundation noted in a recent blog post.

But the factors are out of date, Lankford argues.

“Because of technological advances, many more people today can perform remote, mobile, or technology-based jobs that could not be done decades ago,” he wrote. “Additionally, advances in treatments and therapies have improved the quality of life for Americans with medical conditions.”

Lankford is calling for Congress and the SSA to completely overhaul the SSDI program to protect legitimately disabled people who depend on benefits and the taxpayers who fund it.

Rather than make drastic changes to keep the program solvent, President Barack Obama wants to reallocate a portion of taxes devoted to the Old-Age and Survivors Insurance for retirees, a program distinct from SSDI with separate payroll taxes and trust funds. But such a reallocation would rob the retirement benefits program of about $330 billion in tax revenue and force it into even earlier insolvency than expected, Greszler warned.

Greszler suggests the SSA should develop incentives to help disabled people return to work, establish needs-based disability periods, offer private disability insurance as part of the public program, update eligibility criteria, implement more effective and regular reviews, apply a flat benefit structure, and improve the efficiency and integrity of the appeals process.

Lankford advocates changes that would allow judges to consider all relevant medical opinions, institute standardized eligibility criteria across the appeals process, conduct video hearings with judges who have no ties with the local hearing office in order to reduce hometown bias, and give judges access to claimants’ social media accounts.

“The people hurt the most are the truly disabled who wait, in some cases for years, for benefits they need,” Lankford said.

Where did the government disability program go wrong?

According to Sen. James Lankford, R-Okla., numerous causes have combined to break the Social Security Disability Insurance (SSDI) system, many of them related to the appeal process.

The Social Security Administration (SSA) makes eligibility determinations based on a certain set of criteria. The same criteria are used if the claimant is denied benefits and appeals the decision. But if the claimant is denied again and appeals a second time, the case usually goes to an administrative law judge who can use a different and more subjective set of criteria. As a result, judges often deny benefits to many truly disabled people or award them to able-bodied claimants.

A significant number of judges also appear to simply rubber-stamp people onto disability programs and don’t look thoroughly at the medical evidence, Lankford wrote in a letter to SSA commissioner Carolyn Colvin.

Judges routinely reverse 80 to 90 percent of denials.

Even when judges do their best to make fair decisions, they often do not have complete or accurate information. Some illnesses, such as some types of mental illness and chronic pain, have subjective diagnostic criteria based mainly on the patient’s report of symptoms—conditions claimants can easily fake. Attorneys and claimant advocates frequently make it a point to learn which physicians in the area are quick to diagnose such conditions with little or no collaborative evidence and refer their clients to them, Lankford said. Also, claimants are not required to submit medical evidence adverse to their claim. And claimants may submit evidence that supports their case even after the hearing is completed, a policy that makes it impossible for judges to question them about the information during court hearings.

The appeals process can drag on for a year or two, and attorneys have a vested interest in drawing it out as long as possible. While a case is appealed, backpay benefits based on the time the claimant first became disabled accumulate. If the claimant wins the appeal, the attorney charges a percentage of the backpay, which increases the longer the process takes.

Other program failures involve claimants who are not disabled but continue to receive benefits. Claimants whose disability could be temporary are supposed to have case reviews every three years to determine whether they are still disabled. But the SSA has a backlog of 1.3 million reviews. For every dollar spent on reviews, SSA recovers $11. From 1980 to 1983, reviews showed 40 percent of beneficiaries were no longer disabled.

And if the SSA erroneously determined a claimant qualified for benefits, it is nearly impossible to revoke them later. The law says benefits cannot be discontinued unless the person has made significant medical improvements. But if the claimant was never disabled in the first place, no improvements exist to legally justify terminating benefits.