Attempts by Congress to cut Social Security Disability
Future attempts by Congress to boost employer-sponsored private disability insurance may not be such a great idea, particularly if, in so doing, the attempt is made to either cut Social Security Disability benefits or simply not rescue the fund which, like Social Security retirement, is headed for future shortfalls. Cuts in the neighborhood of 20 percent-plus for Social Security retirement are projected to become a reality by approximately 2034 (two years after I have started drawing my own Social Security retirement).
According to the GAO, the goverment accounting office, some individuals have proposed expanding employer-provided PDI, or private disability insurance, and GAO was asked to conduct an analysis to determine if this expansion might result in savings to the disability insurance fund, a.k.a. Social Security Disability.
Here are a few things that stand out--
1. SSDI, or Social Security Disability Insurance, covers 96 percent of workers while employer sponsored disability insurance is available to only 33 percent of workers.
2. Private disability insurance tends to be more routinely offered to people who work only in certain jobs and industries (business management and finance, respectively, to use a couple examples).
Here's something else that stands out: the review of both SSDI and private disability insurance sponsored by employees found "...some PDI policies may pay benefits for medical conditions that SSDI would not. However, these PDI policies may time limit payments for mental health and musculoskeletal disorders, while SSDI does not."
Private disability insurance is NOT the same as SSDI. Private disability insurance is provided by for-profit companies that have every incentive to minimize costs (i.e. benefits) and get people off their payment rosters asap, however possible. SSDI and SSI claims are subject to review, but for a person to lose their benefits it must be shown that they have had medical improvement. Private disability insurance simply puts a time limit on how long benefits can be drawn in many cases. Private disability insurance, in other words, is not even remotely a safety-net program for individuals who worked and are now disabled. Profit incentive has more than a little to do with that. Which is why the Social Security and Social Security Disability systems should never fall prey to any sort of privatization.
The danger, of course, would come to pass if bolstering private disability insurance was used as a smokescreen to allow for effective cutbacks in SSD under the guise of trying to come up with savings to Social Security Disability. Given how Congress often operates, that would not be surprising in the least. Sort of like tax cuts for the rich that are supposed to trickle down...but never do.
About the Author: Tim Moore is a former Social Security Disability Examiner in North Carolina, has been interviewed by the NY Times and the LA Times on the disability system, and is an Accredited Disability Representative (ADR) in North Carolina. For assistance on a disability application or Appeal in NC, click here.
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