It is possible we will see a tightening in the eligibility criteria.  More than 8.8 million workers now collect Social Security disability insurance (SSDI) a new high.

There is one view which indicates the disability insurance trust fund is slated to run dry in 2016. Without congressional action, that will require an immediate 19% cut in benefits.

Historically, when jobs decline SSDI claims increased.  The Social Security Administration chief actuary Stephen Goss explained to Congress, “when employment is good, when employers are trying to employ lots of people, people with impairments, like everyone else, find it easier to find a job.”

There are 4.8 million long-term unemployed, WITH the average length of unemployment is 40 weeks, according to the Bureau of Labor Statistics. the number of people who are no longer in the labor force has climbed by more than 8 million.

Data released Friday by the Social Security Administration indicates almost 90,000 workers signed up for federal disability benefits in December which represents the country’s largest increase in its history. — the biggest increase for that month in the program’s history.

There are roughly 88.9 million people in the U.S. are now out of the labor force and of those 2.4 million have been out for more than a year.

There was a 1.27 million increase in the number of disabled Americans without jobs from November 2011 to November 2012.

The ratio of those in the labor force and those workers receiving Social Security disability payments is roughly 18-to-1.

There are currently 48.6 million uninsured Americans and this number will decline with the 2014 healthcare law. 

Seventy percent of workers receiving disability assistance fall into three large diagnostic groups:

  • Mental disorders (about 32 percent)
  • Musculoskeletal system and connective tissue (29 percent) and
  • Nervous system and sense organs (about 9 percent)

The growth in these conditions explains more than 80 percent of the rise in disability payments since 1996.

Mental Disorders Account for 32% of Disability Assistance Awards

This country does not provide adequate mental health care, consequently we find a significantly high number of mental disorder claims.  The large group of uninsured Americans enhance the lack of treatment of the mentally disabled as well.

Increase in Disabled Americans

The number of Americans covered by Medicare continues to rise, as more baby boomers entered retirement age.  Medicare and Medicaid are filling the gap with the erosion of employment-based insurance.  Disability benefits after two years include Medicare insurance.

Data reviewed by The Washington Times showed that the Social Security Administration (SSA) conducted fewer reassessments of claimants’ financial situations last year than it did in every year prior to 2006.

Claims Rise, Medicine Improves, Jobs Safer – What’s Up?

It can be expected that the SSA may tighten standards based upon the steady rise in disability claims which may be attributable in part to the high number of medically uninsured Americans. Medicine improved substantially in the last thirty years and there are fewer employed in dangerous industrial jobs. This is reflected in the fact that deaths due to injuries has substantially decreased.

This can partially be explained by the expanding number of uninsured Americans.  It will be important to watch whether an increased number of insured Americans will mean a decrease in disability claims.

The aging of the baby-boom generation explains roughly 15.5 percent of the growth.

In 2010 alone, the program paid out $40 billion and overpayments exceeded $3.3 billion. The government collected on less than half the new debts it detected that year.

SSI is a different and smaller program than Social Security Disability Insurance, which requires recipients to have paid into the system by working in the past, though many people collect from both. It requires persons to certify that they, including spouses, do not make more than $1,048 and have less than $3,000 in the bank. Under-reporting income or assets accounted for nearly 40 percent of the overpayments last year.

The SSA is able to obtain timely information on SSI recipients’ financial institution accounts and wages and periodically obtain recipients’ account balances from major banks to use in occasional reviews.