Showing papers on "Disability insurance published in 1997"

Insuring Consumption Against Illness

Abstract: One of the most sizable and least predictable shocks to economic opportunities in developing countries is major illness, both in terms of medical care expenditures and lost income from reduced labor supply and productivity. As a result, families may not be able to smooth their consumption over periods of illness. In this paper, we investigate the extent to which families are able to insure consumption against major illness using a unique panel data set from Indonesia that combines excellent measures of health status with consumption information. We focus on the effect of large exogenous changes in physical functioning. We find that there are significant economic costs associated with these illnesses, albeit more from income loss than from medical expenditures. We also find a robust and striking rejection of full consumption insurance. Indeed, the deviation from full consumption smoothing is significant, particularly for illnesses that severely limit physical function; families are able to smooth less than 30 percent of the income loss from these illnesses. These estimates suggest large welfare gains from the introduction of formal disability insurance, and that the large public subsidies for medical care typical of most developing countries may improve welfare by providing consumption insurance.

Social Security and Retirement in the Netherlands

Abstract: Compared to other industrialized countries, the labor force participation of the elderly in the Netherlands is very low. Moreover, it has fallen very fast over recent years. We discuss the incentives for employees to retire, arising from public schemes such as social security and disability insurance, and from private arrangements, such as early retirement and occupational pensions. In general, the generous replacement rates offered by these schemes act as powerful stimuli for retirement. Although Dutch research into the retirement effects of the earnings replacing schemes for the elderly was limited until the early nineties, there is now a fast growing literature on this. This literature confirms the findings in the current paper.

Factors affecting the work efforts of disabled-worker beneficiaries.

Abstract: John C. Hennessey* Congress is currently placing considerable emphasis on returning disabledworker beneficiaries to work. However, going back to work is only the first step in the complex process of program termination due to work and trust fund savings. Not only must the beneficiary get a job, but also the work effort must be sustained at what is considered a substantial gainful activity (SGA) level by the disability program (so that an SGA termination will result) and a reasonable living condition must be achieved by the beneficiary (so that the person is motivated to continue working and lose benefits). This article focuses on those factors that affect the ability of the beneficiary to sustain such a work effort. Combined with previous findings about returning to work, we begin to see the overall effect of the factors on work efforts. Beneficiaries who have physical therapy rehabilitation have a higher tendency to start working and a lower tendency to stop. Those with vocational training or general education have a higher tendency to start working, but these factors do not help to sustain the effort. Beneficiaries who were helped with job placement have a higher tendency to start work, but they also have a higher tendency to stop. If beneficiaries knew about the trial-work period, but not about either the extended period of eligibility or Medicare continuation, then they had a higher tendency to start work and a higher tendency to stop. However, if they knew about all three work-incentive provisions, then the tendency to work was not affected. Introduction Long-term financing of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) program has in recent years commanded much attention from the public, Congress, and the Social Security Administration (SSA). This issue was addressed in the 1996 Annual Report of the Board of Trustees of the Federal Old-Age, Survivors, and Disability Insurance (OASDI) Trust Funds, which concluded: In view of the lack of close actuarial balance in the OASDI program over the next 75 years, we again urge that the long-range deficits of both the OASI and DI Trust Funds be addressed in a timely way. Because the DI Trust Fund is expected to be depleted several years earlier than the OASI Trust Fund, and because DI program growth has fluctuated widely in the past, it is essential that the DI program's future experience be monitored closely. It is important to address both the OASI and DI problems soon to allow time for phasing in any necessary changes and for workers to adjust their retirement plans to take account of those changes. We believe there is ample time to discuss and evaluate alternative solutions with deliberation and care. The size of the long-range deficit is such that long-range balance could be restored within the framework of the present program. Nonetheless, the magnitude of any required changes will be smaller the sooner they are enacted. Part of the growth in the DI program mentioned above can be explained by the demographic shift of the DI population to younger beneficiaries' and an increase in primary diagnoses that have longer mean times in the DI program.2 Two ways that DI beneficiaries leave the program are by a substantial gainful activity (SGA) termination or a medical recovery. A medical recovery occurs when the medical condition improves to a point where the beneficiary is no longer considered disabled. An SGA termination occurs when, although currently disabled, a person is able to adjust to the disability and to establish a work pattern that is considered SGA. Therefore, it is possible that savings to the trust funds could be realized by encouraging more SGA terminations, especially among younger beneficiaries. Congress is currently placing considerable emphasis on returning DI beneficiaries to work. Several recent proposals provide examples of this trend. SSA has proposed to Congress a program that would replace the current SSA Vocational Rehabilitation (VR) Reimbursement Program with the implementation, on a phased-in basis, of the "Ticket to Independence" program for beneficiaries with disabilities. …

Tax Rates and Work Incentives in the Social Security Disability Insurance Program: Current Law and Alternative Reforms

Abstract: The Social Security Disability Insurance (SSDI) Program has long been criticized by economists for its apparent work disincentives stemming from the imposition of 100-percent tax rates on earnings. However, the program has been modified in recent years to allow recipients to keep some of their earnings for fixed periods of time. Moreover, additional proposals have been made for lowering the tax rate further and for providing various additional financial work incentives. We use the basic labor supply model to show the expected effect of these reforms on work effort. In addition, we provide a numerical simulation that shows the magnitude of the monetary incentives provided by the reforms for different categories of individuals. We find that the proposed reforms have ambiguous effects on work effort and could, contrary to perceived wisdom, possibly reduce work effort and increase the number of SSDI recipients. However, the simulations show that reforms based on earnings subsidies for private employers are more likely to increase work effort and to lower the caseload.

Dilemmas of anonymous predictive testing for Huntington disease: privacy vs. optimal care.

Abstract: Some persons at risk for Huntington disease (HD) seek predictive testing under the protection of anonymity to reduce the risk of insurance discrimination for themselves and their families. While Canadian and European health care systems seem to limit insurance discrimination to life and disability insurance, U.S. residents do not have national health insurance and are concerned about health insurance discrimination. Two persons residing outside Canada requested predictive testing anonymously. Their primary reason for doing so was to avoid the risks of medical insurance discrimination. After a detailed preparatory session and agreement to counselling and to receipt of results in person, we agreed to provide anonymous testing to these persons. One participant, whose psychological assessment was unremarkable, coped well with the predictive testing process and did not have the CAG expansion. The other participant had considerable emotional problems prior to testing, which necesitated postponement of discussion of results and referral for psychiatric assessment and support. Both participants had difficulty maintaining anonymity. The provision of anonymous predictive testing raises several problems. With anonymous testing, clinicians cooperate with participants to exclude insurance companies from information. This may invalidate the contract with insurance companies. A policy response by insurance companies or a universal health care system to protect individuals is preferable. Individuals who request anonymous testing may be precisely those most vulnerable and in need of additional support and counselling. However, the preservation of anonymity is a burden to participants and may frustrate the clinicians' ability to establish rapport in counselling and to provide appropriate follow-up typically available through genetic counselling in predictive testing programs.

Is Actuarially Fair Insurance Pricing Actually Fair? A Case Study in Insuring Battered Women

Abstract: In 1995, the public, the bar, and the legislators of several states began to respond to a 1988 survey of insurers that indicated that internal policy guidelines of approximately half of the nation's largest insurers instruct that health, life and disability coverage be denied to domestic abuse victims. The response: public outcry and legislative and industry action. Some of these insurers voluntarily modified their policies in an effort to stave off regulation. Nonetheless, laws have been enacted in sixteen states that limit the ability of insurers to use abuse victim status in underwriting and rating decisions-ten of these sixteen since February of 1996. Similar bills have been introduced in twelve other states and in both houses of Congress. While some industry representatives have adopted the viewpoint of their critics, others continue to defend this policy as a principled and fair response to the actuarially documented fact that victims of domestic abuse are more likely to be victimized in the future than are others with otherwise similar risk profiles, thus drawing disproportionately on health, life and disability insurance pools. Mean­while, critics of the practice decry what they see as a double victimiza­tion-first at the hands of the batterer, then at the pen of the insurer. This Article examines the claims of both the industry and its critics. In order to determine whether the proposed legislation is necessary to prevent unfair treatment of abuse victims by insurers, we need to ascertain whether the practice it forbids is fair. Insurers maintain that use of the "abuse victim" classification is no different from use of other classifications employed in insurance pricing. On that basis, insurers claim that use of this classification is both consistent with current practice and fair. Insurers routinely charge more for health insurance coverage, or even deny coverage, to potential insureds with poor medical histories and to potential insureds who work in jobs that are more hazardous than aver­age. Even where a potential insured's medical history does not warrant denial of coverage, that coverage is often limited by a policy that either denies coverage for a particular medical condition (an exclusionary waiver) or denies coverage for any unnamed condition present at the date of purchase (a preexisting condition clause). While these last two practices have recently come under attack in the political arena, the focus of such attacks has been the effect on job mobility rather than fundamental fair­ness. Insurers justify these underwriting and pricing practices on the basis of a principle known as "actuarial fairness." A pricing scheme is "actu­arially fair" if each insured pays a price for coverage that is equivalent to the risk she poses of drawing from the insurance pool, given available information. Those in poor health pay more for health insurance because they are more likely to draw from the pool created by premium payments than those in average health. Using this method of pricing, the private insurance industry is. unable to offer an economically viable insurance product to those in the worst health, termed "uninsurables" by the indus­try, because their likelihood of drawing large sums from the pool is so great that the price that would have to be charged for "actuarially fair" coverage is not affordable to those needing such coverage. Part I of this Article examines the question whether the use of the classification "abuse victim" by insurers in pricing insurance is similar to the use of other classifications such as "person with high blood pressure," which the legislation would not prohibit. It looks at arguments for and against the use of the abuse victim classification that are analytically independent of the justifiability of the underlying practice of risk rating. For example, I examine the claim that when a person is accountable for the condition that makes her a poor health insurance risk (the recreational bungee jumper, for example), she may justifiably be charged an actuarially fair rate. Although the above argument would not justify the use of risk rating in most cases of illness or disability, it may justify risk rating the abuse victim. If the abuse victim, like the bungee jumper, is accountable for the fact that she faces a higher than average risk of injury, then risk rating on the basis of abuse status may be justified. The key word here is "like." Part I of this Article examines the strength of this analogy. In order to do so, it is necessary to unpack the claim that it is fair to charge insureds more for those conditions for which they are accountable. By under­standing if, when, and in what circumstances one may justifiably be charged more for actions one takes that affect one's health, we are able to see if this defense of the abuse victim classification is successful. Alternatively, one can argue that when an insured is at great risk because she is a victim or likely future victim of a crime, it is not fair for her insurance rates to reflect this risk. This argument, like the argu­ment from accountability, examines the similarity between the abuse victim classification and classifications based on health status, such as high blood pressure, used by insurers in risk rating. If the abuse victim clas­sification is different from these others, the legislation can be supported or rejected without examining the justifiability of risk rating itself. How­ever, Part I begins the larger project by teasing out some basic princi­ples-the role of accountability for health, the importance of community responsibility for risk-that play important roles in determining when risk rating generally is ethically permissible. After looking at these arguments, I conclude that the differences between the abuse victim classification and others used by insurers provide a justification for the proposed legislation. Interestingly, supporters of the legislation go to great lengths to defend it as necessary to provide abuse victims with equal treatment rather than as necessary because of differences between the use of that classification and others. Insurers are depicted as singling out abuse vic­tims as if that in itself were unfair. But the practices of underwriting and risk rating operate by singling out traits of persons or classes of persons with selected traits and adjusting rates and coverage accordingly. Any defense of the legislation must provide a reason why the abuse victim in particular ought not to be singled out by insurers. One can also offer a more far-reaching argument for the proposed legislation. The discussion in Part I assumes the justifiability of risk rating. It asks whether differences between the abuse victim classification and other insurance classifications make its use more or less justifiable than use of these others. But perhaps the strong outcry against this insur­ance practice taps a deeper intuition about the fairness of health insurance underwriting itself. If so, the case of the abuse victim-which has a shock-the-conscience quality-helps us to see what is troubling about risk rating in health insurance more generally. The proposed legislation should thus be supported as an important first step toward a fairer system of health insurance pricing. Part II of the Article looks at this system of risk-rated health insur­ance pricing. Its goal is modest. Rather than provide an attack on or defense of the current actuarially based rating methods, Part II aims to uncover the moral commitments that ground prevailing views about health insurance pricing. Part III looks at the proposed federal and state legislation in light of the arguments advanced in Part I. The Article concludes by endorsing the stronger of the enacted and proposed laws as necessary for the fair treat­ment of abuse victims and as an important first step toward treating the misfortunes of poor health and disability as communal responsibilities.

Work while receiving disability insurance benefits: additional findings from the New Beneficiary Followup Survey.

Abstract: This article uses the New Beneficiary Followup Survey to describe the characteristics of beneficiaries who work after award of benefits and examines some aspects of the process by which work attempts come about. It also addresses questions of why beneficiaries work, how postentitlement jobs differ from those held prior to award of benefits, and the relationship between health status and work. Most of the beneficiaries who worked did so for reasons of financial need and worked without attributing this decision to an improvement in their health. Those most likely to work were young and had higher levels of schooling. The likelihood of working was the same across the range of disabling health conditions. Many different approaches led to job offers, and most beneficiaries who worked did not return to their previous employer. The first postentitlement job had less exertion, fewer hours, and lower pay than did the job held immediately prior to award. by Evan S. Schechter* Disability Insurance (DI) benefits are awarded to persons whose medically determinable physical or mental impairment is expected either to result in death or to last for a continuous period of not less than 12 months. While persons awarded benefits have impairments that often make it difficult for them to return to a level of substantial gainful activity (SGA), the Social Security Administration (SSA) has formally encouraged the return to work by establishing several work incentives. Among these incentives are the trial work period, extended Medicare eligibility, and limited funding of rehabilitation services for DI beneficiaries through State Vocational Rehabilitation (VR) agencies. Beneficiaries may make use of DI program work incentive provisions or they may seek and obtain employment after award without recourse to these program features. The decision to try to work, and the mechanisms of job search, job attainment, and sustained employment can follow channels that differ in their approach and rate of success. This article describes the characteristics of beneficiaries who work and some aspects of the process by which the return to work comes about. Beneficiaries who attempt some postentitlement work are likely to be of special interest in disability program analysis. Over the period beginning in 1989 and ending in 1994, the number of DI-disabled worker beneficiaries grew from about 2.8 million to nearly 4 million, a 40-percent increase. Benefit payments for the DI total program grew from about $23 billion in calendar year 1989 to nearly $38 billion in 1994, an increase of 65 percent. This program growth is the result not only of increases in the number of applications and awards, but also the declining rate of persons leaving the DI rolls due to either medical recovery or return to work. An earlier report cited an estimate that, "...fewer than 3 percent of all beneficiaries terminate from the DI program due to a work recovery."1 Clearly, identifying factors associated with work resumption and a description of job search mechanisms can directly inform SSA's work incentive policies. New Beneficiary Data System Sections of the New Beneficiary Data System (NBDS) provide information on postentitlement labor-force activities of disabled beneficiaries. Its initial phase was the New Beneficiary Survey (NBS) conducted in 1982. There were 5,188 persons sampled. These persons were awarded disability benefits from mid-1980 to mid-1981. In 1992, the New Beneficiary Followup (NBF) reinterviewed the NBS sample persons who were still living. To augment the total number of the disabled in the NBDS, an additional 3,000 beneficiaries (entitled in the 1980-81 period) whose administrative record indicated some postentitlement work experience were incorporated into the NBF. These persons comprise the disability addon sample. The population for this article consists of all DI beneficiaries who were first entitled between June 1980 and June 1981, were awarded benefits before May 1982, survived up to June 1992, and personally participated in their interviews. …

Bargaining for Social Rights: Unions and the Reemergence of Welfare Capitalism, 1945-1952

Abstract: The United States has long been distinctive among Western welfare states for its heavy reliance on private social policies. Private pensions, health, and disability insurance are not absent from other welfare states, but America has made a virtue of what many countries consider an unwanted stepchild. Even when compared to the less capacious welfare states of Britain or Australia, much less the comprehensive continental European or Scandinavian welfare states, American reliance on private social protection is anomalous. Payments to individuals for private or employer-provided social benefits accounted for 25 percent of total social welfare payments in 1985. The United States spends a higher fraction of GNP for private pensions (1.4 percent) than any other industrial society, and 57 percent of all U.S. health expenditures are private compared to an average of 20 percent in other welfare states.1 Most individuals receive private social benefits as an employee benefit, financed by employer supplements to wages and salaries. Entitlement to these benefits is based on employment rather than citizenship. This private safety net has mostly benefited unionized workers and middle class citizens with steady, white collar jobs. Workers not in unions or in low-wage industries have been excluded from this system of private social protection. Reliance on private health insurance has also served as one of the main impediments to the adoption of national health insurance. Yet today this system of private social protec-

Cash benefits for short-term sickness, 1970-94.

Abstract: This note has reviewed the extent of protection of workers against income loss during the first 6 months of illness or injury. National income loss in 1994 was $81.1 billion, of which $49.4 billion (60.9 percent) was replaced by income-protection programs, including sick leave, group insurance, temporary disability insurance under statutory State provisions, individual insurance, workers' compensation, and (during the 6th month) the Social Security Disability Insurance program. In 1994, wage and salary workers in the private sector lost $55.2 billion because of nonoccupational illnesses or injuries, of which $19.0 billion (34.5 percent) was replaced. Wage replacement rates are higher for full-time professional and technical employees with longevity in large or medium firms, and especially public employees. The lowest level of coverage is given to part-time employees with limited seniority who work in production and related areas in small, private firms. Approximately 70 percent of wage and salary workers in the private sector have some protection through their employment against earnings losses caused by short-term illness. Forty-four percent of these workers have short-term disability insurance,and only half have sick-leave coverage.

Incentives to disability in federal disability insurance and supplemental security income.

Abstract: Between 1989 and 1994, Disability Insurance and Supplemental Security Income, the 2 federal programs that provide disability benefits, expanded rapidly. The largest growth has been among recipients with mental disorders in the Disability Insurance program and among children with learning disabilities in the Supplemental Security Income program. The expansion was partly due to changes in eligibility rules and partly to other factors including outreach efforts by the Social Security Administration and a lack of funds to review and terminate cases. Factors that keep many of the disabled from seeking work include a fear of being unable to obtain health insurance, which is provided to beneficiaries under Disability Insurance and Social Security Insurance, and the fear of being unable to obtain and keep stable employment. Although children's Supplemental Security Income benefits have reduced poverty in families with disabled children, there is some evidence that parents are encouraging their children to behave poorly so they can qualify. Replacing present welfare and disability programs with national health insurance and a guaranteed annual income would eliminate the work disincentives, but such dramatic restructuring is unlikely in the context of present political debates.

Gender Differences in Social Security Disability Decisions

Abstract: This study analyzes gender differences in Social Security disability awards. Logit analysis is used to identify significant determinants of receiving a Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) award. The results show that, even after controlling for applicant characteristics and nature of impairment, women receive Social Security disability awards at a significantly lower rate than do men. An analysis of the process whereby eligibility for SSDI is determined shows that men and women are equally likely to satisfy medical criteria for awards, but women, particularly women over age 55, are more likely to be rejected on the basis of vocational criteria.

Reliability of expert assessment in disability evaluation within the scope of disability insurance

Abstract: With the introduction of the law on the statutory nursing care insurance in Germany ("Pflegeversicherung") in 1995, new benefits are provided for the most severely disabled people. Provision of benefits is contingent on a standardised examination performed by the medical service of the German statutory health insurance system (MDK). Results of the first study on the inter-rater reliability of this standardised examination are presented in this paper. The study population consisted of 218 elderly people (age range 60-99) living in 4 nursing homes in Munich. They were assessed by 2 senior medical students and 2 nurses using the standardised questionnaire of the MDK. Inter-rater reliability was assessed by means of kappa coefficients. Reliability was assessed with regard to the summary judgement of disability and the rating of single items (with regard to limitations in activities of daily living, mental status or the prognosis). Inter rater reliability was higher for the overall assessment of disability (kappa = 0.71 between medical students, kappa = 0.66 between nurses) than for most of the single items of the questionnaire such as "need of assistance with dressing" (kappa = 0.57 between medical students, kappa = 0.66 between nurses) or "ability to move" (kappa = 0.58 between medical students, kappa = 0.67 between nurses). Kappa-coefficients were particularly low for variables concerning prognosis of participants and for the mental status item "self-disorientation" (kappa = 0.19 between medical students, kappa = 0.23 between nurses). These patterns were consistently observed for the 2 rater groups (student-student, nurse-nurse). Between the 2 rater groups there was no substantial difference in reliability. However, there was a trend for higher agreement within the group of nurses. Although the overall reliability of the assessment of disability is relatively high in comparison to many other diagnostic procedures (such as x-ray readings), efforts should be made towards further improvement of this standardised examination.

Case Management at Work for SSA Disability Beneficiaries: Process Results of the Project NetWork Return-to-Work Demonstration

Abstract: This article presents the results of the process analysis of the evaluation of the Project NetWork demonstration, a Federal demonstration undertaken by the Social Security Administration (SSA) in 1991 to test alternative methods of providing rehabilitation and employment services to SSA's Disability Insurance beneficiaries and Supplemental Security Income disabled and blind applicants and recipients. The major findings are: (1) from an operational standpoint, it is feasible to expand access to vocational rehabilitation (VR) services to a broad spectrum of SSA beneficiaries, and (2) roughly similar results are achieved, in terms of client intake and provision of services, when case management services are provided by SSA staff, contracted out to State VR agencies, or contracted with private VR providers. Later evaluation reports will trace demonstration impacts on earnings and disability benefits and report the overall benefits and costs of return-to-work services for this population. by Valerie Leiter, Michelle L. Wood, and Stephen H Bell* Introduction Project NetWork was a Federal demonstration project initiated by the Social Security Administration (SSA) in 1991 to test alternative methods of providing rehabilitation and employment services to SSA's Disability Insurance (DI) beneficiaries and Supplemental Security Income (SSI) disabled and blind applicants and recipients. The ultimate objective of the demonstration was to return disabled beneficiaries to work, thereby helping them to improve the quality of their lives and lessen their dependence on government income support. The demonstration project was conducted in eight locations nationwide between 1992 and 1995, using a case management approach to broker services and to encourage and facilitate movement into the labor force. In addition to testing the feasibility and efficacy of the case management approach, the demonstration represents the first time SSA has provided employment services directly to its client population. The policy innovations tested by Project NetWork address many of the issues confronting decisionmakers, both inside and outside SSA, seeking to expand rehabilitation and employment options for people with severe disabilities. Many of these issues have been explored in earlier writings on the project (Rupp and others 1994; 1996). The current article focuses on the administrative and operational questions that arise in providing return-to-work services to a diverse range of clients using a case management approach. In particular, it asks: Is it feasible, from an operational standpoint, to increase participation in services among people with severe disabilities, such as SSA's DI beneficiaries and SSI applicants/recipients? What processes can be used for broad, large-scale outreach to a population of this sort, when the goal is to inform and encourage as many disability beneficiaries as possible to consider a return-to-work effort? What range of services will need to be provided when working with clients of such diverse circumstances and employment goals? Is it possible to always formulate advance plans for service delivery that identify vocational goals and the steps for achieving them, given the great variety of disability types and interests represented among SSA beneficiaries? Is it feasible to access needed services from the existing VR provider community, given the many, highly varied requirements likely to emerge in an individualized case management approach? In dealing with each of these challenges, does it matter what type of organization provides the case management services-SSA, State VR agencies, or private sector providers? Can less resource-intensive strategies such as referral management get results similar to case management, in terms of client intake and service delivery? In total, this analysis provides a number of practical lessons on the strategies available to those seeking to implement innovative approaches to helping people with severe disabilities return to work. …

Degree of disability of demented patients as judged by relatives and experts (disability insurance)

Abstract: Health insurance companies commission medical expert opinions rating the severity of clinical improvement in order to provide adequate nursing support. We compared these ratings on 28 demented patients with the ratings from carers and with our own examination. The results indicate that the expert opinions underestimated the severity of improvement and adequate support in some of the cases. We discuss whether these discrepancies may be due to the peculiarities of dementia.

Social Security Privatization: Balancing Efficiency and Fairness

Abstract: rowing public awareness of future pressures on Social Security is eroding many Americans' confidence in this key retirement program These pressures are nearly certain in the next century, stemming from the retirement of the large baby-boom generation, longer average life spans, and lower projected fertility rates To meet such pressures, various reforms of Social Security have been proposed, ranging from simple repairs to the current system all the way to full privatization In this context, privatization usually means moving the public retirement system toward a set of individual accounts with the workers' funds invested partly in private securities and with workers having some measure of control over investment allocations Choosing among the competing reform proposals is a daunting task Supporters of privatization believe such reforms would boost economic efficiency, resulting in higher real output per worker and helping the nation cope with the future pressures from population aging Supporters also believe privatization would produce a retirement system that treats different generations more fairly Critics fear, however, that the privatization of Social Security would produce a more unequal income distribution for retirees and expose them to greater investment risks This article examines these fundamental issues of economic efficiency and fairness that should be weighed when considering Social Security privatization The first section summarizes the challenges to the current system and outlines various options for reform The second section explains how privatization could improve economic efficiency, and briefly considers the difficult issue of the transition costs in moving from the current system to full privatization The third section discusses important issues of fairness within and across generations Any decision to privatize Social Security will require balancing the likely gains of greater real output and fairer returns to younger generations with the possible adverse effects of a more unequal income distribution among retirees and greater investment risks This balancing must occur through the political process because fairness is a matter of values rather than economic analysis I THE GROWING INTEREST IN PRIVATIZATION The many achievements of Social Security should not be forgotten in discussing possible reforms Social Security has provided a secure retirement income for millions of Americans, lowering poverty rates among the elderly and protecting working families against the disability or premature death of a breadwinner Moreover, such Social Security benefits are not currently in jeopardy because the system faces no immediate problem in meeting its financial obligations Recent interest in privatizing Social Security comes, instead, from a growing awareness of the pressures that will emerge in the early decades of the next century, along with some long-standing issues about how to balance economic efficiency and fairness Financial challenges Social Security is essentially a pay-as-you-go retirement system in which most of the payroll taxes paid in by employers and current employees are immediately paid out as benefits to retirees An estimated 144 million people paid contributions to the old-age and survivors insurance and disability insurance (OASDI) trust funds in 1996, with the combined tax rate on employers and employees being 124 percent1 Benefits were paid to almost 44 million people at the end of 1996, with initial benefit levels depending on the workers' earnings histories and changes in national average wages After retirement, benefit levels are adjusted upward to reflect changes in the consumer price level Despite the existence of the OASDI trust funds as an accounting device, Social Security is really unfunded in the sense that there is no portfolio of private securities backing the program that could be sold to maintain future benefit payments …

Disability and Chronic Fatigue Syndrome: Clinical, Legal, and Patient Perspectives

Abstract: Because of the individual and varying symptoms of chronic fatigue syndrome, medical guidelines encompassing the needs of every patient simply do not exist. Through proven research and recommendations for future treatment, Disability and Chronic Fatigue Syndrome: Clinical, Legal, and Patient Perspectives discusses the difficult subject of how to diagnose disability in chronic fatigue syndrome patients, how to determine the severity of a patient’s disability, and how new disability guidelines would make more chronic fatigue patients eligible to apply for disability benefits. From this information, you will gain a clearer understanding of chronic fatigue syndrome, enabling you to more accurately assess a patient’s condition or decide if your client is eligible for disability benefits. Essential for clinicians, lawyers, patients, and medical insurers, Disability and Chronic Fatigue Syndrome provides an outline of disability guidelines established by the Social Security Administration (SSA), the Veterans’Administration, and the American Medical Association, as well as federal guidelines. While gaining information on the different types of disability insurance available to chronic fatigue patients, such as the Long Term Disability (LTD) policy, you will also learn how standard procedures such as psychiatric evaluation, neuropsychological testing, and physical capacity measurement can both help and hinder the process of determining disability in a patient. In addition, Disability and Chronic Fatigue Syndrome provides insight into: the symptoms of chronic fatigue syndrome, such as inability to work and level of stamina, in accordance with medical and legal definitions disability guidelines set by the SSA how patients’varying symptoms and conflicting findings affect disability diagnosis in chronic fatigue syndrome patients by SSA standards plans by the Chronic Fatigue Immune Dysfunction Syndrome (CFIDS) Association of America to work with the SSA concerning strategies to dissolve barriers to Social Security Disability Income Benefits for patients and to advocate for up-to-date information on CFIDS in the SSA’s Listing of Impairments. tips on applying for SSA benefits claims that insurance companies have used misleading surveillance videos and fraud to discontinue disability benefits to patients in need of coverage Since the Social Security Administration does not currently consider a CFIDS diagnosis enough to win a disability claim, Disability and Chronic Fatigue Syndrome also contains many recommendations for improving federal disability guidelines, such as using results from functional evaluations, neuropsychological testing, and exercise endurance testing as evidence of impairment. For less severe cases, this book provides you with suggestions for rehabilitation of CFS patients before disability claims are made, including patient training and education, dependency counseling, muscular conditioning, and occupational therapy. Whether you are a patient, clinician, lawyer, or medical insurer, Disability and Chronic Fatigue Syndrome will guide you through the complex issues surrounding disability and this intricate disease.

Incentives to Disability in Federal Disability Insurance and Supplemental Security Income : Chronic pain, secondary pain, and somatization

Abstract: Between 1989 and 1994, Disability Insurance and Supplemental Security Income, the 2 federal programs that provide disability benefits, expanded rapidly. The largest growth has been among recipients with mental disorders in the Disability Insurance program and among children with learning disabilities in the Supplemental Security Income program. The expansion was partly due to changes in eligibility rules and partly to other factors including outreach efforts by the Social Security Administration and a lack of funds to review and terminate cases. Factors that keep many of the disabled from seeking work include a fear of being unable to obtain health insurance, which is provided to beneficiaries under Disability Insurance and Social Security Insurance, and the fear of being unable to obtain and keep stable employment. Although children's Supplemental Security Income benefits have reduced poverty in families with disabled children, there is some evidence that parents are encouraging their children to behave poorly so they can qualify. Replacing present welfare and disability programs with national health insurance and a guaranteed annual income would eliminate the work disincentives, but such dramatic restructuring is unlikely in the context of present political debates.

The work incapacity and reintegration study: results of the initial survey conducted in the United States.

Abstract: The United States and six other countries (Germany, Denmark, Norway, Sweden, Israel, and the Netherlands) are participating in a cross-national study of work incapacity and reintegration under the auspices of the International Social Security Association. The purpose of the study is to identify those medical and nonmedical interventions that are most successful in helping persons disabled due to a back condition return to work. The study involves a baseline survey and two follow-up surveys over approximately 2 years. This article reports on the findings from the baseline survey conducted in the United States. It compares the responses of persons from four study groups (the Social Security Administration's Disability Insurance (DI) beneficiaries and Supplemental Security Income (SSI) recipients, and temporary disability insurance (TDI) recipients from two States--California and New Jersey). The article discusses the potential influence of certain characteristics on the capacity for work reintegration. Study findings suggest that the characteristics of TDI recipients with back disorders may differ in some respects from those of recently entitled DI or SSI beneficiaries with similar impairments, and that there may be some correlation between work resumption and factors such as education occupation, work-related demands, and the presence of other chronic diseases.

Negotiating the Maze of Disability Insurance

Abstract: (1997) Negotiating the Maze of Disability Insurance Journal of Chronic Fatigue Syndrome: Vol 3, No 4, pp 99-109

Research and politics in policymaking for Social Security.

Abstract: BRIAN Gratton's article (1997) in this issue gives us the unsurprising news that there is a politics of statistics — that research is not a neutral form of fact-gathering but rather a political weapon. His article vividly indicates that the Social Security Board used tainted data to support its efforts to establish the constitutionality of the program in 1937. Indeed, Mr. Justice Cardozo's opinion provided an eloquent defense of the program, arguing that the purpose of Social Security was "to save men and women from the rigors of the poorhouse as well as from the haunting fear that such a lot awaits them when journey's end is near" (Cardozo, 1937/1985, p. 33). To my knowledge, the defenders of Social Security never regretted their tactics in gathering data for the Supreme Court brief (Berkowitz, 1995). On the contrary, they often celebrated the decision, just as I am sure that Thurgood Marshall had reason to celebrate the Court's 1954 decision in the school desegregation cases. That case, too, rested on social science research that was subject to challenge. The strategy of using social science in a legal brief went back at least as far as the Brandeis brief that was used in wage-andhour cases at the turn of the century (Goldmark, 1953). In all of these cases, legal advocates never doubted the justice of their causes. They simply employed social science theory as a forensic weapon. Does that mean that research done by the Social Security Administration comes from a tainted tradition and is inherently suspect? I think not. The Annual Statistical Supplement of the Social Security Bulletin contains page after page of reliable program statistics, reflecting a practice that began in large part with Ida Merriam who, for many years, ran the Office of Research and Statistics. She helped to train such outstanding practitioners in the field of health and social welfare statistics as Dorothy Rice, who remains one of the world's experts on disability statistics. The actuaries at Social Security also come from a long line of dedicated people who have tried to make reliable estimates of future program expenditures in the face of many political inducements, in some cases from inside the agency but more often from outside political advocates in Congress, to shade the numbers one way or the other (Derthick, 1979). Recently, for example, the actuaries accepted a challenge to help prepare cost estimates for a plan advocated by members of the Social Security Advisory Council who favored the privatization of the program. In this case, the actuaries were simply doing their jobs, even though their jobs conflicted in some sense with the political sentiments of their immediate superiors. Nonetheless, the history of Social Security illustrates that advocacy and objectivity are often antithetical to one another. The times of greatest conflict come during eras of political uncertainty in which, as in Dr. Gratton's example, the program is struggling for its survival or in which program advocates are attempting to move the program into new realms. Disability insurance, first proposed in 1938 but not adopted as part of Social Security until 1956, serves as a good case in point. In 1938 an open rift developed within the Social Security Board (as it was then called) over the cost of adding disability insurance to the program. The head of the research and statistics department wanted the agency to announce a definite cost estimate for disability protection, but the chief actuary refused to give a single figure. The actuary said he could not possibly give one estimate and "maintain his professional integrity" (Cohen, 1938). A decade later another actuary warned against the use that the agency was making of disability cost estimates. He said the issue was not the initial cost of the program, which would be quite low, but rather the fact that all restrictions would have to be removed, and "costs will hence become very large" (Myers, 1948). The actuary's words went unheeded. When the program passed in 1956, it initially cost very little and then experienced huge cost increases in the 1970s and again in the 1990s (Mashaw, 1997). Here was a case of the agency ignoring its own research in favor of making what it perceived as an important social advance. More recently, the effort to preserve Social Security in the face of calls for its retirement has led to renewed controversy over the use of statistics. Here we might consider the events leading to the 1983 amendments. Created by President Ronald Reagan in 1981, the National Commission on Social Security Reform eventually produced the deal that led to these program-saving amendments. In the

Disability and Health Care Reform: Principles, Practices, and Politics

Abstract: The magnitude of change in health care policy within the United States is parallel to the evolution of computer technology during the last decade. The changes have been swift, extensive, radical, and unprecedented. The reform in health service provision has completely reshaped the landscape of medicine and the allied professions. Persons with disabilities have not been spared the effect. For example, public funded medical providers such as Medicare, Medicaid, and worker's compensation are increasingly being privatized through contractual agreements between the states and health care providers (Hagglund & Frank, 1996). Oftentimes, these agreements result in economic limits on services for recipients such as persons with disabilities. The aforementioned change in health care policy is being fueled by the public and private sector's concern for cost control. Private industry has experienced double-digit inflation annually in the cost of employee health benefits. Kongstvedt (1989) stated that corporations have addressed the escalation in cost by reducing coverage and/or offering creative benefits packages such as managed care arrangements (e.g., health maintenance organization [HMO], preferred provider organizations [PPO], and independent practice associations [IPA]). Rising cost for local, state, and federal agencies has been more rapid than in the private sector. Treatment cost at county clinics and hospitals have encouraged both the state and federal government to consider reducing payments to physicians, increasing premiums paid by Medicare beneficiaries, allowing states greater control over Medicaid, and persuading enrollment in private sector managed care plans (Bellamy, 1995). Although passage of a comprehensive reform package failed in the 104th Congress, states such as Oregon and Tennessee have made major reforms by focusing on managed care. According to Cavaliere (1995), at least twelve states have been granted 1115(a) waivers from the Health Care Financing Administration (HCFA). The waivers enable the states to mandatorily enroll Medicaid recipients in managed care service delivery systems. The significance of adequate health care coverage for all Americans is indisputable. However, it is particularly crucial for persons with disabilities because of special health care needs, greater risk for higher health care costs, and tougher approvals for private insurance coverage (Reno, 1994). Uninsurance and underinsurance is a prevalent and severe problem for persons with disabilities (Watson, 1993). Although the common belief is that Medicare and Medicaid cover all persons with disabilities, nearly 16 percent (2.1 million) of working-age individuals in 1984 with an activity-limiting disability had no insurance (Watson, 1993). A typical private health insurance plan covers acute care hospitalization and physician expenses, yet it rarely provides for long-term needs such as medical equipment, supplies, rehabilitation, or personal assistance services. Watson (1993) reported that in 1991 a woman with multiple sclerosis indicated in testimony to the National Council on Disability that she spent $8,000 of her $20,000 annual salary on health-related needs, even though her full-time employment provided health insurance. The perceived importance of medical coverage for recipients of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) is so great that the risk of losing coverage is a larger rehabilitation disincentive for employment than is the loss of their cash benefits (Quinn, 1995). Thus, secure medical coverage for persons with disabilities is paramount to developing stable health care policies that facilitate entry or return to employment following rehabilitation. Watson (1993) noted that persons with disabilities have been conspicuously absent from the debate regarding health care, yet they have much at stake. Moreover, many of the conventional proposals of reform ignore the varied and group specific needs of persons with disabilities. …