Showing papers on "Disability insurance published in 1989"

The health and earnings of rejected disability insurance applicants.

Abstract: Applicants for Social Security disability benefits who fail to pass the medical screening form a natural "control" group for beneficiaries. Data drawn from the 1972 and 1978 surveys of the disabled done for the Social Security Administration show that fewer than 50 percent of rejected male applicants work. Typical earnings of those that do are less than 59 percent of median earnings for other men their age. These data cast doubt on recent econometric work that suggests that the disincentive effects of the Social Security Disability Program have been substantial. Copyright 1989 by American Economic Association.

The taxes of sin. Do smokers and drinkers pay their way

Abstract: We estimate the lifetime, discounted costs that smokers and drinkers impose on others through collectively financed health insurance, pensions, disability insurance, group life insurance, fires, motor-vehicle accidents, and the criminal justice system. Although nonsmokers subsidize smokers' medical care and group life insurance, smokers subsidize nonsmokers' pensions and nursing home payments. On balance, smokers probably pay their way at the current level of excise taxes on cigarettes; but one may, nonetheless, wish to raise those taxes to reduce the number of adolescent smokers. In contrast, drinkers do not pay their way: current excise taxes on alcohol cover only about half the costs imposed on others. ( JAMA . 1989;261:1604-1609)

The external costs of a sedentary life-style.

Abstract: Using data from the National Health Interview Survey and the RAND Health Insurance Experiment, we estimated the external costs (costs borne by others) of a sedentary life-style. External costs stem from additional payments received by sedentary individuals from collectively financed programs such as health insurance, sick-leave coverage, disability insurance, and group life insurance. Those with sedentary life-styles incur higher medical costs, but their life expectancy at age 20 is 10 months less so they collect less public and private pensions. The pension costs come late in life, as do some of the medical costs, and so the estimate of the external cost is sensitive to the discount rate used. At a 5 percent rate of discount, the lifetime subsidy from others to those with a sedentary life style is $1,900. Our estimate of the subsidy is also sensitive to the assumed effect of exercise on mortality. The subsidy is a rationale for public support of recreational facilities such as parks and swimming pools and employer support of programs to increase exercise.

The Health and Earnings of Rejected Disability Insurance Applicants

Abstract: Applicants for Social Security Disability Benefits who fail to pass the medical screening form a natural 'control' group for beneficiaries. Data drawn from the 1972 and 1978 surveys of the disabled done for the Social Security Administration show that fewer than 50% of rejected male applicants work. Typical earnings of those that do are less than 50% of median earnings for other men their age. These data cast doubt on recent econometric work which suggests that the disincentive effects of DI have been substantial.

Projected outcomes and length of time in the Disability Insurance program.

Abstract: This article reports on the first phase of a longitudinal analysis of a random sample of 18,816 Social Security beneficiaries who were first entitled to disabled-worker benefits in 1972. These individuals were observed from the time of benefit entitlement to January 1981. This phase examines the first event of interest after entitlementthat is, recovery, death, or retirement. Mathematical models are used to project these events beyond the observation period and to calculate the proportion of beneficiaries who ultimately leave the program rolls for these reasons. Average length of time in the program is also estimated. The analysis relates these outcomes to a set of covariates that includes primary diagnosis, educational level, past occupation, primary insurance amount (PIA), sex, race, and age at entitlement. The second phase of the project analyzes the postrecovery period of the same cohort. The results appear in the second article of this issue. This study projects that 11 percent of the beneficiaries will ultimately leave the Disability Insurance program because they recover, 36 percent will have their disabled-worker benefit terminated at death, and 53 percent will have their benefits converted to retired-worker benefits at age 65-that is, they retire. Mean length of time in the program is estimated to be 9.3 years. Considerable variation was found in the outcomes and mean number of years in the program by primary diagnosis, educational level, PIA, age, and sex.

Lack of correlation between the steinbrocker staging of hand radiographs and the functional health status of individuals with rheumatoid arthritisx

Abstract: We evaluated the correlation between destructive changes seen on hand radiographs and disability in 54 patients with definite or classic rheumatoid arthritis. No statistically significant correlation was found between radiographic findings and patient disability as determined by patient and physician assessment or by the patient's score on the Arthritis Impact Measurement Scales questionnaire. These findings call into question the appropriateness of using hand radiographs as a determinant of disability or as a criterion for disability insurance benefits.

Displaced concern: the social context of the work-disability problem.

Abstract: The Social Security disability insurance program benefits were reduced in the early 1980s, in the belief that income supports induced people to stop working. The action failed to stem the number of program participants from rising, as older men with activity limitations due to chronic disease continued to withdraw from the labor force. Attention paid in this and other instances to work disability derives from the problem's social context, displacing concerns about work loss itself and its effects on workers' lives. While slow growth in the economy as a whole may be a root cause of the problem, policies to address the nature and scope of work disability directly remain adrift.

Eliminating the Medicare waiting period for Social Security disabled-worker beneficiaries.

Abstract: Medicare eligibility for Social Security Disability Insurance beneficiaries begins no earlier than 24 months after entitlement to cash benefits. The original purposes of the 24month waiting period were to limit costs to the Medicare trust funds at a time when many workers might have other health insurance coverage and to ensure that Medicare protection is extended only to persons whose disabilities are severe and long lasting. Some policymakers have advocated shortening or eliminating the waiting period to improve access to medical services and to alleviate the burden of very high medical expenses. Using a unique file of longitudinal data from Social Security and Medicare records, Medicare costs during the waiting period have been estimated for a randomly selected cohort of 18,782 disabledworker beneficiaries first entitled to disability benefits in 1972. The estimates suggest that the lo-year cost to Medicare of this cohort would have increased by about 45 percent if the waiting period had been eliminated and if Medicare were the primary payer during that time. Thirty percent of the increase in expenses would have been for persons who died within 2 years of entitlement to disability benefits. Data from the New Beneficiary Survey indicate that in 1982 about 27 percent of disabled-worker beneficiaries had no health insurance coverage in the last 6 months of their waiting period. These beneficiaries and others without insurance who died in the first 18 months of eligibility for Disability Insurance would benefit the most from elimination of the waiting period. Other data show that providing timely Medicare coverage might be difficult for some beneficiaries because of the retroactive nature of many disability program entitlements.

The Politics of Social Security Expansion: Social Security Disability Insurance, 1935–1986

Abstract: In 1956 President Eisenhower signed an amendment to the social security program that created disability insurance. His action marked the end of a sharp debate over disability insurance and the beginning of two decades of consensus concerning the program. Thirty years later, however, major issues have arisen in the disability insurance program that closely resemble the disputes that preceded its passage. Consensus no longer prevails about the goals and administration of the program. In this paper, we describe the history of the social security disability program in terms of an illusive search for a political consensus.2 We first examine the U.S. Senate's 1956 debate over disability insurance. This debate provides a convenient summary of the ingredients of the compromise that sustained the consensus of the next two decades. Then, in an effort to explain what was at stake in 1956, we review discussions about disability that had taken place previously in bureaucratic and professional circles. We next examine the post- 1956 expansion of disability insurance, and we conclude with the dissolution of the compromise.

Low Confidence in Social Security Is Not Warranted

Abstract: The public's low confidence in Social Security is unwarranted. Social Security as discussed here means the old-age, survivors, and disability insurance program (OASDI) but does not include Medicare. Its financial condition is excellent in the short range and sound in the long range, based on intermediate-cost estimates. Those who believe otherwise are too pessimistic about our demographic and economic future. The OASDI cost rates are expected to remain at today's level for the next three decades, and will rise starting about 2020. The cost rates are expressed as a percentage of taxable payroll. Because the taxable payroll as a proportion to total compensation is projected to decline, the cost rates in the future will rise even when benefit payments do not. This problem could be solved by a method that effectively taxes total compensation at a constant percentage rate. Another reason for cost rates to rise is population aging. It is possible to reduce the cost rates if educational and work environments are...

Rehabilitation Feasibility of Blind and Visually Impaired Disability Beneficiaries.

Abstract: Rehabilitation Feasibility of Blind and Visually Impaired Disability Beneficiaries Major changes were made in Title II and Title XVI of the Social Security Act with the passage of the Omnibus Budget Reconciliation Act of 1981 (Public Law 97-35). This legislation changed the cooperative program between the Social Security Administration and state Vocational Rehabilitation (VR) agencies from a "trust fund" arrangement to an "entitlement" program whereby VR agencies are reimbursed on a case by case basis and only in instances when the individual beneficiary or recipient has performed a continuous nine month period of work at a "substantial gainful activity" (SGA) level. Given this reimbursement process, it is essential that VR administrators and counselors who serve blind and severely impaired adults have access to data that help reflect the prognosis for gainful employment for Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) beneficiaries. The SSDI program is a program of public employment -- disability insurance created by Congress to insure workers contributing to the Social Security Trust Fund against the risk of future unemployment caused by the occurrence of a physically or mentally disabling condition. In contrast, the SSI program is a social welfare program intended to provide basic income replacement for poor people unable to achieve sustained, compensated employment because of a physical and/or mental disability. State VR agencies provide a program of services that will prepare disabled persons to regain the status of productive members of society. However, some disabled persons who are enrolled in a rehabilitation program may be reluctant to take a job for fear of loss of disability benefits. This has resulted in disability benefits functioning as disincentives to rehabilitation, because it is not economically feasible for the disabled person to return to work. This study focused on the rehabilitation feasibility of blind and visually impaired clients who are disability beneficiaries. Many studies which shed light on rehabilitation feasibility have used rehabilitation outcome as the major criterion (Aiduk & Longmeyer, 1972; Ben-Yishay, Gertsman, Diller, & Hans, 1970; Gilbert & Lester, 1970). In these studies, clients usually were categorized as successful or unsuccessful closures and compared on various biographical variables included on available agency records. Significant differences among the groups served as the basis for the prediction of rehabilitation outcome of client groups selected for validation. Berkowitz (1980), Better, Fine, Simison, Doss, Walls, and McLaughlin (1979), Manus (1981), Schuermann and Hommertzheim (1979), and Walls (1982) conducted studies on rehabilitation outcome of disability beneficiaries. Other studies (Ammons, 1979; Crouse, 1974; McGowan, 1972) examined variables that predicted rehabilitation outcome and adjustment to blindness for blind clients; however, these studies did not focus specifically on blind and visually impaired disability beneficiaries. Studies in these areas differ in methodology. While some are concerned with the "general," "average," or "typical" client and use aggregate data and refined statistical techniques on a cross-sectional or time-series basis, others adopt a clinical approach, seeking to ascertain individual characteristics of clients and the effects of specified disincentives on them (Berkowitz, 1980). In a recent report to the Subcommittee on Social Security in the U.S. House of Representatives, the General Accounting Office (GAO) reported little success is being achieved in rehabilitating disabled beneficiaries (GAO, 1987). In fact, the GAO concluded that only a small minority of disability beneficiaries -- not more than 10 to 15 percent -- are realistic prospects for rehabilitation. This post hoc evaluation study examined blind and visually impaired disability beneficiaries after their cases were closed. …

Further reflections on actuarial recognition of nuclear holocaust hazard

Abstract: In a paper presented to the Twenty-Second Actuarial Research Conference, held in 1987 at the University of Toronto, a notation and mathematical model were developed to explore the impact of nuclear holocaust hazard on actuarial mathematics. The purpose of the present paper is to consider this hazard in relation to long-term income maintenance systems such as Social Security and retirement plans. The paper begins with a brief recollection of the notations used in the Toronto paper. It then highlights the actuarial projections of the 1988 Annual Report of the Board of Trustees of U.S. Old-Age and Survivors Insurance and Disability Insurance Trust Funds. This is a very large system with current annual outgo of $220 billion, and rapidly growing assets. Under the less optimistic of two intermediate projections, the combined trust funds are estimated to reach a level of $12 trillion by the end of 2030. Thereafter, the funds are projected to decline rapidly to exhaustion by 2050. A simple difference equation, in the notation of the Toronto paper, is examined as a possible means of controlling the upward and downward changes in the trust funds if Congress periodically adjusts OASDI financing to satisfy the equation. Next sections of the paper consider what recognition of nuclear holocaust hazard would mean for pension mathematics. The easiest situation to discuss is in regard to reserves for retired members and beneficiaries. A second matter is the calculation of optional retirement annuities, and could entail much numerical work. The funding for active members will bring up many questions, in particular, in regard to the actuarial assumptions. In concluding sections, the paper attempts to measure the scientific worth of recognizing nuclear holocaust hazard in our actuarial mathematics, and the consequences thereof. One keeps coming back to the idea that the only practical way to recognize such hazard is by a specific component of the interest rate. Thereby, long-term financial transactions can proceed quite logically even in the presence of the hazard. But one essential step for world progress is to minimize nuclear holocaust hazard. To aid this process, actuarial science should seek its truths, and communicate them widely.