Disability

Late last week, the New York Times carried an article discussing Senate inquiries into whether disability insurers were gaming their financials by obliging claimants to apply over, and over, and over, and over… for SSDI.

Sick and injured people must often wait more than a year before their claims can be decided by one of Social Security’s administrative law judges, a delay Mr. Grassley called “abominable.”

“The last thing those who rely on Social Security need is for insurance companies to be clogging up the system by forcing ineligible applicants to apply,” he said.

Mr. Grassley told the insurers to report on how many of their claimants they had compelled to apply for Social Security in the last five years; how many appeals they had required people to file; and what methods they had used to screen the people beforehand to make sure they truly had a chance of qualifying for the government benefits.

The New York Times reported in April that disability insurers were making claimants apply for Social Security even when they did not qualify and were cutting off insurance checks if the claimants failed to do so.

I’m not in a position, myself, to comment on those allegations from an insurance point of view – it’s outside my area of expertise.

However, I have had the misfortune of experiencing the mess that is Social Security from the viewpoint of helping my disabled wife through the process.

I don’t think the problem is (or “is just”) disability insurers clogging the system.  Our experience was that if you weren’t obviously disabled (paralyzed, comatose, missing eyes or limbs) or weren’t near retirement age, your objective was to get through the initial review and the second review as quickly as possible, so that you could hire a disability lawyer and join the 2-3 year long queue to get in front of a judge.

The Social Security Disability standards are rather arcane, and one has a tendency to wonder about some of the civil servants involved.  For example, the first denial my wife received included a regurgitation of her doctor’s opinion about her condition…reversed.  “Cannot bend and pick up 25 pounds” became “is able to bend an pick up 25 pounds”, for example.

Look, if disability insurers have knowingly been forcing non-qualifying claimants into the SSDI system repeatedly, I agree that needs to stop.  However, given private disability insurance is always secondary to Social Security, it’s understandable that insurers would want eligible folks to claim those benefits.

The likely problem arises from Social Security’s definition of “eligible” being so fuzzy in practice, and the SSDI claim process being so onerous that no one in their right mind would want to go through the process, but for desperation, masochism, or duty to a private insurer.

I don’t know whether disability insurers actually aggravate the mess of Social Security Disability.  However, I think there are plenty of other potential areas of improvement in the process that could be tackled which would improve the process tremendously.

One of the more popular articles in Tuesday’s New York Times was an article entitled, “Insurers Faulted as Overloading Social Security”.

The Social Security system is choking on paperwork and spending millions of dollars a year screening dubious applications for disability benefits, according to lawsuits filed by whistle-blowers.

Insurance companies are the source of the problem, the lawsuits say. The insurers are forcing many people who file disability claims with them to also apply to Social Security — even people who clearly do not qualify for the government program.[...]

[D]isability insurers tell many of their claimants to appeal Social Security’s rejections again and again, until some are finally accepted. Then the insurers can take those people off their rolls, shifting the cost to the government.

I have the misfortune to have experience on both sides of the subject here. One of the programs I work with in the day job offers LTD cover. Also, my wife was disabled in a car accident six years ago. Last year, we finished a 3-year struggle to get Social Security to recognize her disability (after signing away a large chunk of her back benefits check to get a lawyer to represent us).

I’m rather disappointed in the one-sidedness of the NYT article.

Whether the aggressiveness of some LTD providers in encouraging claimants to pursue SSDI claims is deliberate manipulation of the system, or just a reflection of the random nature of the Social Security disability determination process, I cannot say.

I can support the idea that the Social Security claims intake process is painfully slow and overloaded. Some of that is clearly lack of resource on Social Security’s part, and some of that is probably a large number of applications from ineligible claimants which Social Security is required by law to give appropriate consideration to.

However, a fair amount of the burden on Social Security disability also has to be it’s random nature. With my wife’s claim, we encountered some of the most idiotic denials, and had to permit poking-and-prodding by doctors who didn’t normally specialize in my wife’s ailments. In fact, when we were in the process, the guidance we were given was “grin and bear it” through the random rejections of initial application and request for reconsideration, so that we could get into the long queue to go before an ALJ who would actually give consideration to my wife’s condition.

There has to be a more efficient, reasonable way to screen SSDI applicants. The current bureaucratic mess has also got to be a significant drain on the system.

If Social Security disability applications could be processed more efficiently, more reasonably, and with more predictable results (other than a presumption of “deny twice, and let a judge handle it the rest of the way”), presumably the “get back in line and try again, until you get a favorable answer” strategy that LTD insurers are alleged to pursue wouldn’t be needed.

The aftermath of my wife’s accident almost six years ago has been a most…educational process. For example, we learned (the hard way) to not count the availability of Social Security disability benefits, even though my wife had been paying the premiums (via taxes) for years. So, this article in the New York Times strikes a chord with me:

Two-thirds of those who appeal an initial rejection eventually win their cases.

But in the meantime, more and more people have lost their homes, declared bankruptcy or even died while awaiting an appeals hearing, say lawyers representing claimants and officials of the Social Security Administration, which administers disability benefits for those judged unable to work or who face terminal illness.

The agency’s new plan to hire at least 150 new appeals judges to whittle down the backlog, which has soared to 755,000 from 311,000 in 2000, will require $100 million more than the president requested this year and still more in the future. The plan has been delayed by the standoff between Congress and the White House over domestic appropriations.

There are 1,025 judges currently at work, and the wait for an appeals hearing averages more than 500 days, compared with 258 in 2000. Without new hirings, federal officials predict even longer waits and more of the personal tragedies that can result from years of painful uncertainty.

In my wife’s case, it took two appeals, and signing over 25% of the back payments to a lawyer to get disability benefits started 62 months after that driver scrambled her brain.

It could be worse, I suppose. For example, a few months ago, we finally got a trial date in the lawsuit associated with the accident. The trial will come not quite 80 months after the accident.

Thankfully, we were able to adapt to being a one income family, and fortunately actuarial employers tend to have pretty good health insurance. However, I can definitely empathize with those who were the sole breadwinner prior to their disability.

My wife’s disability attorney mentioned that the SSDI bureaucracy isn’t quite as bad as all the above would suggest—the bureaucracy is set up to move the “visibly disabled”, or folks for whom it seems obvious to a casual observer will be disabled until retirement age. Where the system breaks down is in the bureaucracy involved in differentiating the folks pretending disability to get free money from those whose long-term disability is less obvious (i.e., younger victims or those with “invisible” conditions).

While I do regularly profess a desire that Congress be deadlocked to avoid engaging in real mischief…there are times that inaction in the District is annoying. The playing of politics while the resolution of an identified resource need is sidelined troubles me.

Of course, despite the implications of the NYT article, I’m not sure that simply throwing more judges at the backlog is the issue. You’d think that something could be done about the initial triage process, to reduce the number of cases entering the formal appeal queue.