Showing papers on "Disability insurance published in 2006"

The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding

Abstract: The U.S. Social Security Disability Insurance (DI) program has grown dramatically over the last 20 years in size and expense. This growth poses significant risks to the finances of the DI program and the broader Social Security system, and raises troubling questions as to whether the program is being misused by claimants. This article first provides an overview of the Disability Insurance program, describing who qualifies for the program, how an individual applies for benefits and how the level of benefits is determined. Next, we summarize the factors responsible for the growth in the DI rolls and discuss how the characteristics of DI recipients have changed as a result. We then explore the extent of moral hazard in the DI program and the effectiveness of the screening process in distinguishing meritorious from nonmeritorious claims. Finally, we identify the challenges that the DI program creates for Social Security finances and Social Security reform, and discuss potential reforms to the DI program.

Designing Optimal Disability Insurance: A Case for Asset Testing

Abstract: We analyze an implementation of an optimal disability insurance system as a competitive equilibrium with taxes. An optimum is implemented by an asset‐tested disability system in which a disability transfer is paid only if an agent has assets below a specified maximum. The logic behind this result is that an agent who plans to falsely claim disability (a) finds doing so unattractive if he does not adjust his savings and (b) cannot collect disability insurance if he does adjust his savings in the desired direction (upward). For a calibrated economy, we find that welfare gains from asset testing are significant.

Benefits contract providing a bundle of benefits

Abstract: According to one embodiment of the invention, a benefits contract includes an agreement to provide a plurality of benefits for at least one person. The agreement provides for an account including a plurality of units. Each unit is associated with multiple benefits. For example each unit may be associated with multiple benefits such as life insurance, health insurance, supplemental health insurance, long-term care insurance, short-term disability insurance, long-term disability insurance, prescription drug insurance, a plurality of income payments, a withdrawal benefit, an annuity, a property and casualty benefit, or other similar benefits. The agreement is such that a person associated with the benefits contract may choose to exercise a particular unit, or fraction thereof, to receive only one of the three or more benefits; and such that the benefits account (or plurality of units) may be purchased tax-free using funds from a tax-deferred retirement account.

Optimal Taxation and Social Insurance in a Lifetime Perspective

Abstract: Advances in information technology have improved the administrative feasibility of redistribution based on lifetime earnings recorded at the time of retirement. We study optimal lifetime income taxation and social insurance in an economy in which redistributive taxation and social insurance serve to insure (ex ante) against skill heterogeneity as well as disability risk. Optimal disability benefits rise with previous earnings so that public transfers depend not only on current earnings but also on earnings in the past. Hence, lifetime taxation rather than annual taxation is optimal. The optimal tax-transfer system does not provide full disability insurance. By offering imperfect insurance and structuring disability benefits so as to enable workers to insure against disability by working harder, social insurance is designed to offset the distortionary impact of the redistributive labor income tax on labor supply.

Induced Entry Effects of a $1 for $2 Offset in SSDI Benefits

Abstract: This paper predicts the budgetary, behavioral, and welfare effects of a proposed change in the Social Security Disability Insurance (SSDI) program known internally within the Social Security Administration (SSA) as the "$1 for $2 benefit offs et", i.e. a reduction of $1 in benefits for every $2 in earnings an SSDI be neficiary earns above the "substantial gainful activity" (S GA) ceiling, currently equal to $860 per month. Currently SSDI beneficiaries lose 100% of their benefits if their earning exce ed the SGA ceiling after a nine month trial work period. Disability advocates argue that lowering this tax to 50% would significa ntly increase the incentives for SSDI beneficiaries who have full y or partially recovered from their disabilities to return t o work, and could actually reduce the cost of SSDI via induced exit from the program. However the U.S. government was concerned that the $1 for $2 offset makes SSDI more generous, and thus could actually increase costs via a combination of reduced exit from SSDI and induced entry into SSDI. A 1999 law signed by President Clinton, the Ticket to Work and Work Incentives Improvement Act, mandated the Social Security Security Administration (SSA) to undertake a demonstration project to evaluate whether the $1 for $2 offset would have a significant induced entry effect . The current SSA Commissioner, Jo Anne B. Barnhardt, cancelled the demonstration project, perhaps in response to high costs and serious methodological problems associated with implementing it. This paper provides an alternative a model-based evaluation and prediction of the impact of the $1 for $2 offset using a detailed, empirically calibrated version of the "life-cyc le model." The model's predictions are consistent with the p redictions of the disability advocates, namely under the $1 for $2 offset a large fraction of SSDI beneficiaries eventually return to work. However, the model predicts that this work is only temporary and part time, and few of these beneficiaries will actually le ave the SSDI rolls. Furthermore the model predicts that induced entry will occur, although our estimates of the induced entry effect are lower than previous estimates by the SSA's Office of the Ac tuary, which predicted that SSDI rolls and costs would increase by approximately 6%. Our model predicts that the number of SSDI applications would increase by 2.2%, and SSDI rolls would increase by 3.2%. The mean duration of a typical beneficiary o n SSDI would also increase, from 12.7 years to 13 years, and the overall cost of the SSDI program would increase by approximately 4%.

Managing depression-related occupational disability: a pragmatic approach.

Abstract: 76 Objective: To identify the crucial issues that arise for psychiatrists and other physicians when dealing with occupational disability in their patients with depression and to suggest practical strategies for responding more effectively to the challenges of this aspect of patient functioning. Method: We identify fundamental concepts in the occupational disability domain and draw crucial distinctions. The wider context for occupational disability is articulated, involving the workplace environment and the disability insurance industry. Research with direct relevance to clinical decision making in this area is highlighted. We make pragmatic suggestions for effective management of occupational disability in patients with depression. Results: To successfully manage issues of occupational disability, psychiatrists and other physicians must understand the distinction between impairment and disability. To make this decision fairly and accurately, the adjudicator requires particular types of information from the physician, with requirements varying across short-term or long-term disability claims; failing to provide relevant information may cause substantial stress or financial harm to the patient. Balanced and collaborative decision making regarding whether and for how long to take work absence will greatly help to maintain occupational function in the long term. Realistic expectations and support of the patient’s sense of personal competence foster recovery of occupational function. Conclusion: Management of depression-related disability is challenging. Thoughtful evaluation of the patient’s functional status, careful response to the requirements of disability determination, and a focus on functional recovery yield substantial benefits. (Can J Psychiatry 2006:51:76–83)

Disability Insurance and Unemployment Insurance As Substitute Pathways: An Empirical Analysis Based on Employer Data

Abstract: In this paper, we estimate the degree of substitution between enrolment into Disability Insurance (DI) and Unemployment Insurance (UI) in the Netherlands. Starting in the 1990s many policy measures aimed at reducing DI enrolment, and increase labour force participation. We quantify whether these policy measures have led to a reduction in hidden unemployment in DI. A side effect of the reforms may be increased pressure on UI. Therefore, we simultaneously estimate reverse substitution, that is, hidden disability in UI. To this end, we employ a sample of firms in the Dutch AVO database from the period 1993-2002. Using instrumental variables in a bivariate Tobit specification, we identify the hidden components in both respective schemes. The estimation results indicate that about 3% of all dismissals took place through DI, which implies that about one quarter of the DI enrolments observed in our sample in fact consists of hidden unemployment. We find no evidence for reverse substitution of disabled persons ending up in UI. CPB 70

Health insurance and access to care among Social Security Disability Insurance beneficiaries during the Medicare waiting period.

Abstract: For most Social Security Disability Insurance (SSDI) beneficiaries, Medicare entitlement begins 24 months after the date of SSDI entitlement. Many may experience poor access to health care during t...

The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding

Abstract: More than 80 percent of nonelderly U.S. adults are insured against the risk of disabling physical or mental illness by Social Security Disability Insurance (SSDI). This article evaluates the causes of the extraordinary growth in SSDI enrollment, considers its fiscal ramifications, and discusses potential policy responses. While aggregate population health has improved by most measures in recent decades, the rate of SSDI receipt among nonelderly adults has nearly doubled since 1984. We project that SSDI receipt will rise by an additional seventy percent before reaching a steady state rate of approximately 6.5 percent of adults between the ages of 25 and 64, with cash benefit payments exceeding $150 billion annually (excluding Medicare). We trace the rapid expansion of SSDI to: (1) congressional reforms to disability screening in 1984 that enabled workers with low mortality disorders such as back pain, arthritis and mental illness to more readily qualify for benefits; (2) a rise in the after-tax DI income replacement rate, which strengthened the incentives for workers to seek benefits; (3) and a rapid increase in female labor force participation that expanded the pool of insured workers. Notably, the aging of the baby boom generation has contributed little to the growth of SSDI to date. Among several avenues for reducing SSDI growth, we suggest that the most promising are revamping the disability appeals process - in which the Social Security Administration currently loses nearly three-quarters of all appeals - and reducing the attractiveness of DI benefits for work-capable disabled individuals by providing additional access to public health insurance. By contrast, previous efforts to reduce the SSDI rolls by discontinuing benefits or by providing stronger return-to-work incentives have proved remarkably unsuccessful.

Semi-Markov reward models for disability insurance

Abstract: A semi-Markov model for disability insurance is described. Statisticalevidences of relevance semi-Markov setting are given. High order semiMarkov backward reward models are invented. Applications o ...

Factors Associated with Workforce Participation among SSDI Beneficiaries

Abstract: The Social Security Disability Insurance (SSDI) program provides cash benefits and health insurance to approximately 6.8 million disabled workers and their families, at a total annual cost of about $66 billion (Social Security Administration, 2004). The program has grown rapidly, a trend attributed to various factors, including general population growth (Yeas, 1995), enrollment of workers at younger ages (Rupp & Stapleton, 1995), greater longevity of workers (Riley, Lubitz, & Zhang, 2003), SSA policy changes (Burkhauser, Butler, & Weathers, 2001), and dislocations and transformations of the u.s. labor market (Catalano & Kennedy, 1998; Khan, Gerdtham, & Jansson, 2004; Yelin & Katz, 1994). Once participants enroll in the SSDI program, they tend to stay in the program until they reach age 65 and receive regular retirement benefits. The U.S. General Accounting Office reports that only one-half of one percent of beneficiaries leave the program rolls and return to work (GAO, 2001). This persistently low rate of disenrollment is inconsistent with a growing political consensus, bolstered by survey data, that people with disabilities want to work and, with sufficient support services and adequate opportunities, can work (Kaye, 1997; National Council on Disability, 1997). In 1999, Congress passed the Ticket-to-Work and Work Incentives Improvement Act (TWWIIA, PL 106-170), which mandates a series of program changes to encourage employment among both SSDI beneficiaries and Supplemental Security Income (SSI) recipients. These changes for SSDI beneficiaries included vouchers for rehabilitation services, maintenance of Medicare coverage for working beneficiaries, and a streamlined re-enrollment process (SSA, 2001). The economic ramifications of such efforts are significant: doubling the small proportion of SSDI beneficiaries who return to work (e.g., from 0.5% to 1%) would return billions to the Social Security trust fund (GAO, 1999). Kennedy, Olney and Schiro-Geist (2004) using data from the 1994 and 1995 National Health Interview Survey (NHIS) disability supplement, found that about 9.2% of SSDI beneficiaries reported being employed, and another 1.3% reported looking for work. This paper uses data from the 2001 and 2002 NHIS to investigate the intensity (hours per week) and duration of employment among SSDI recipients, and identify factors associated with employment. While the SSA has regularly monitored work among SSI beneficiaries (SSA, 2000), little comparable data has been available for working SSDI beneficiaries. This study roughly mirrors the published SSA reports on working SSI beneficiaries. Prior research has identified a core set of person-level factors associated with workforce and program participation (e.g., Bound, Cullen, Nichols & Schimdt, 2001; Favreault, 2002; GAO, 1998; Gruber & Kubik, 2002; Kruse, 1997; Mitchell & Phillips, 2002; NASI, 1996; RTI, 2000; Schechter, 1999; Stern, 1989), including age, gender, race, education, income, marital status, health status, chronic condition, and severity of disability. In this study, working and nonworking beneficiaries are compared on each of these factors, and significant factors are included in a multivariate model predicting employment among SSDI beneficiaries. Methods This study is a secondary analysis of the 2001 and 2002 National Health Interview Surveys (NHIS). The NHIS is an ongoing household survey, conducted by the Centers for Disease Control's National Center for Health Statistics (Adams & Benson, 1991; Massey, Moore, Parsons, & Tadros, 1989). Such national surveys offer a timely and cost-effective approach for studying program participation (Apfel, 2000), and have played a crucial role in informing SSA policy. All population estimates were weighted using U.S. decennial census data. Because of the relatively low rates of workforce participation among SSDI beneficiaries, two panels of the NHIS (2001 and 2002) were merged, and the weights were adjusted accordingly. …

Effect of Social Security payments on substance abuse in a homeless mentally ill cohort.

Abstract: Possession of a large amount of money is a well-recognized relapse trigger (O'Brien et al. 1990; Wallace 1992), and several highly publicized reports have suggested that Social Security Administration (SSA) benefit payments to patients disabled by psychiatric illness result in greater use of alcohol and drugs of abuse (Satel 1995; Shaner et al. 1995). Other studies have specifically focused on the increased prevalence of substance abuse and related harm around the beginning of the month, the so-called “check effect” (Grossman et al. 1997; Phillips, Christenfeld, and Ryan 1999; Catalano et al. 2000; Halpern and Mechem 2001). However, no differences in drug use were observed in a comparison of homeless persons who received public support payments over a 3-month period and those who did not (Rosenheck, Lam, and Randolph 1997) and no increased substance use was found among homeless veterans awarded supplemental security income (SSI) or Social Security Disability Insurance (SSDI) compared with veterans whose applications were denied (Rosenheck et al. 2000). A cross-sectional analysis of 2,474 veterans enrolled in an outreach program also found no greater substance use among those receiving disability payments than among those not receiving them (Frisman and Rosenheck 1997). It is thus possible that while receipt of disability payments alters the timing of substance abuse so that substance use increases when checks are received, it does not alter the total amount of abuse. Longitudinal studies are needed to better elucidate whether receipt of disability payments is associated with increased overall substance use. The most informative longitudinal studies of the effect of disability payments on substance abuse have focused on participants in the SSA's drug addiction and alcoholism (DA&A) program (Swartz, Tonkin, and Baumohl 2003), which provided SSA benefits to beneficiaries specifically disabled by substance use until it was discontinued in 1996 (Hunt and Baumohl 2003). Two important studies have compared outcomes between DA&A beneficiaries who lost their benefits and those who continued to receive benefits for a disabling condition other than substance abuse. In one study, outcome toxicology screens did not differ between those whose benefits ended and those whose benefits were renewed (Swartz, Hsieh, and Baumohl 2003b). In the other, self-report data appeared to suggest that continued receipt of SSA benefits was associated with more severe drug problems, although the authors did not come to this conclusion (Guydish et al. 2003). The current study is a longitudinal analysis of the relationship between receipt of Social Security benefits and subsequent substance use among participants in the access to community care and effective services and supports (ACCESS) demonstration, a 12-month outcome study involving over 7,000 homeless persons with severe mental illness in 18 U.S. communities. It differs from previous studies in that it involves a larger sample with longer follow-up, is not restricted to beneficiaries who receive disability as a result of substance abuse (the DA&A studies), and utilizes administrative Social Security records to corroborate benefit status. Homeless people with serious mental illness desperately need disability payments but are also at high risk to use such payments for alcohol and drugs. We hypothesized that participants newly awarded SSI or SSDI during the 12 months would have more subsequent drug and alcohol use over time than those not awarded SSA benefits, as evidenced by a significant group-by-time interaction.

Early Retirement and Public Disability Insurance Applications: Exploring the Impact of Depression

Abstract: This paper investigates the impact of depression on labor force participation among older workers Empirically, we use two analytic strategies and rely on a sample drawn from the Health and Retirement Survey Depression directly and indirectly increases individuals%u2019 probability of retiring early and applying for DI benefits, after accounting for other predictors of labor force exit Accounting for the independent effects of depression, disability associated with physical illness may be smaller than the official statistics suggest There may be great economic gains in increasing depression treatment awareness and access to treatment for individuals, employers and society

Breaking the Cycle of Poverty: Asset Accumulation by People with Disabilities.

Abstract: In this article the authors argue that equality for people with disabilities is contingent on economic equality and financial independence. They discuss the use of asset accumulation strategies, such as Individual Development Accounts ("IDAs"), by people with disabilities who utilize Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), Temporary Assistance to Needy Families (TANF) and Medicaid. The major federal IDA programs, Assets for Independence (AFIA) IDAs and TANF IDAs, are compared in their use by people with disabilities. Further, the authors examine the income and resource limitations of SSI, SSDI, TANF and Medicaid and show how these often operate as barriers to asset accumulation by people with disabilities. Work incentives that operate within these programs are discussed in relation to asset development. Finally, the article concludes with proposals to encourage asset accumulation by people with disabilities.

Computerized medical underwriting of group life and disability insurance using medical claims data

Abstract: A method of underwriting group disability insurance for a policy period includes collecting medical claims data for the group to be underwritten, where each medical claim being related to a particular employee of the group. Morbidity categories are provided that categorize the medical claims in the medical claims data. A conditional probability model is developed and applied to the morbidity categories for each employee in the group using his medical claims, thereby calculating the expected conditional probability for each employee of incurring a disability during the policy period. A further statistical model of the estimated cost of the disability is developed and applied based on the employees' morbidity categories from the medical claims data. For each employee, an estimate of the expected cost of incurring a disability given their morbidity categories is derived from his medical claims data. Combining the expected conditional probability for each employee incurring a disability during the policy period with the estimate of the expected cost of that disability gives an estimate of the group's total disability exposure. Thereby, the expected disability exposure is used to determine a premium amount for disability insurance coverage during the policy period for the group.

Clinical and social predictors of application for social security disability insurance by workers' compensation claimants with low back pain.

Abstract: Objective: The objective of this study was to identify clinical and social predictors of application for Social Security Disability Insurance (SSDI) in workers’ compensation claimants with low back pain. Methods: Archival and interview data were analyzed for 1372 Missouri claimants who were, on average, nearly 42 months postinjury. Results: Two hundred sixty-five (19.3%) claimants were receiving SSDI (8.0%) or had applied for SSDI (11.3%). Logistic regression indicated that black race, older age, herniated disc diagnosis, surgery, and longer time since injury were associated with increased odds of SSDI. Higher preinjury wage, more education, and higher satisfaction with medical treatment and/or treatment by employer were associated with decreased odds of SSDI. Conclusions: Application for SSDI among claimants with occupational low back pain is associated with social factors like race, satisfaction, and socioeconomics as well as clinical factors like diagnosis and surgery.

Social Security and the "D" in OASDI: The History of a Federal Program Insuring Earners Against Disability

Abstract: Today it is widely recognized that the acronym "OASDI" refers to the Old- Age, Survivors, and Disability Insurance program of the Social Security Administration (SSA). However, the program that began in 1935 originally did not contain provisions for disability insurance. In fact, the "D" in OASDI was implemented more than 20 years later, on August 1, 1956. This is the date that President Dwight D. Eisenhower signed into law the 1956 Amendments to the Social Security Act establishing the Social Security Disability Insurance program. At first the program provided monthly benefits only to disabled workers between the ages of 50 and 65 who met certain requirements for insured status. Even though the program later significantly expanded its coverage, its implementation in 1956 represented the historic culmination of an effort by Social Security planners that began in the 1930s. This year-2006-the Social Security disability program celebrates its 50th anniversary. In February of this year, this program administered by the Social Security Administration paid benefits to more than 8 million disabled individuals and their dependents. Although SSA still faces challenges in administering the program, it has succeeded in accomplishing what planners had envisioned: the provision of social insurance to one of the neediest groups in the United States. There had been much resistance to the introduction of disability benefits. Major concerns then underscore the same operational issues that challenge the program today: the difficulty in determining whether a disabled individual has lost the capacity to work and the concern over managing program costs. Opponents of implementing cash disability payments had legitimate concerns, and Social Security planners recognized this. However, historically, as well as currently, planners believed that problems encountered were surmountable and that the need for disability benefits was so great that the federal government had an obligation to address the issue. This article explores the efforts of Social Security planners to establish a disability program in the United States and the history of the program over the past 50 years. It describes how the program has evolved and the internal and external influences that have affected its development. This historical narrative concludes with a discussion of the 2001 report of the Social Security Advisory Board. Released in the same year that Jo Anne Barnhart was confirmed as the Commissioner of SSA, this report predicted that the projected growth in the disability programs would overwhelm the policy and administrative infrastructure of the programs unless fundamental changes were made. Commissioner Barnhart had been a member of that Advisory Board. Upon taking the reins at SSA, Commissioner Barnhart initiated a series of changes to address many of the concerns expressed in that report. A description of the Barnhart initiatives and their implementation are described in this issue of the Social Security Bulletin in a companion article, "Addressing the Challenges Facing SSA's Disability Programs." The Creation of Social Security and the Debate Over Disability Insurance State-sponsored insurance against job-related injuries, sickness, old age, and unemployment were common in Europe before 1930. Progressive Era social workers and social scientists in the United States had long advocated the introduction of social insurance programs similar to those that existed in many European countries.1 However, reformers had made little progress during the 1920s. They were hampered not only by the opposition of some business interests but also the skepticism of organized labor, which was suspicious of government intervention and the motives of middle-class reformers. But the political climate became more favorable with the arrival of the Great Depression. Foundation for the Disability Program: 1935 Report of the Committee on Economic Security One factor that influenced the establishment of Social Security in the United States was the Townsend Old-Age Revolving Pension Plan movement in the early 1930s. …

Quality of care for Medicare beneficiaries with disabilities under the age of 65 years.

Abstract: Social Security Disability Insurance provides cash benefits to disabled workers and certain others under the age of 65 years. These individuals become eligible for Medicare 24 months after Social Security Disability Insurance cash benefits start. In 2001, 13.9% of Medicare's approximately 40 million beneficiaries were adults under the age of 65 years with disabilities, and they generated 15% of total program costs. Medicare beneficiaries with disabilities under the age of 65 years are much more likely than elderly beneficiaries to be minority race and ethnicity, impoverished, and to report fair or poor health. They are clinically diverse, with 53.4% reporting mental health conditions. Although Medicare provides essential coverage of acute medical services and selected rehabilitative and long-term care services, by law, Medicare does not reimburse important items and services essential to daily living for many people with disabilities, including mobility aids for use outside the home, physical and occupati...

Screening Disability Insurance Applications

Abstract: This paper investigates the effects of intensified screening of disability insurance benefit applications. A large-scale experiment was setup where in 2 of the 26 Dutch regions case workers of the disability insurance administration were instructed to screen applications more intense. The empirical results show that intense screening reduces long-term sickness absenteeism and disability insurance applications. This provides evidence both for direct effects of the more intensive screening on work resumption during sickness absenteeism and for self-screening by potential disability insurance applicants. We do not find any spillover effects to the inflow into unemployment insurance. A cost-benefit analysis shows that the costs of the intensified screening are only a small fraction of its benefits.

Early Retirement and Public Disability Insurance Applications: Exploring the Impact of Depression

Abstract: This paper investigates the impact of depression on labor force participation among older workers. Empirically, we use two analytic strategies and rely on a sample drawn from the Health and Retirement Survey. Depression directly and indirectly increases individuals%u2019 probability of retiring early and applying for DI benefits, after accounting for other predictors of labor force exit. Accounting for the independent effects of depression, disability associated with physical illness may be smaller than the official statistics suggest. There may be great economic gains in increasing depression treatment awareness and access to treatment for individuals, employers and society.

Employer-paid nonmedical costs for patients with diabetes and end-stage renal disease.

Abstract: INTRODUCTION Disease conditions such as end-stage renal disease (ESRD), which have severe consequences of disability and mortality, can generate substantial costs for large employers providing life insurance and disability insurance benefits. This study is the first to examine such disease-related nonmedical costs for employers and models the following employer-paid costs for ESRD in patients with diabetes: 1) life insurance benefits, 2) disability benefits, and 3) cost of replacing a worker. METHODS We simulated a hypothetical cohort of 10,000 individuals with the age and sex distribution of a typical employee population in the United States. Data sources for the model parameters included the United States Renal Data System and proprietary life insurance and disability insurance claims databases. In addition, we used published information to identify the structures of typical employee benefits programs and annual salary information and to estimate the cost of replacing lost workers. RESULTS The study estimated that employers may incur life insurance costs of 55,055 dollars per ESRD-related death, disability insurance costs of 31,671 dollars per ESRD-related disability, and worker replacement costs of 27,869 dollars per ESRD-related lost worker. Overall, the total monthly cost per employee with ESRD and diabetes was 5439 dollars. CONCLUSION Our study finds that, other than the large direct medical costs documented in literature, ESRD onset also results in substantial nonmedical costs for employers. As employers continue to debate changes in the structure of future health plan benefits to reduce health care costs, they should consider potential indirect cost savings of providing affordable access to medical care that prevents or delays disability and mortality in their workers.

Estimated payments to employment service providers for persons with mental illness in the Ticket to Work program

Abstract: Objective: The Ticket to Work and Work Incentives Improvement Act of 1999 removes work disincentives and promotes access to vocational services for people with disabilities. This study calculated the amount of payments that would have been made to employment service providers if study participants had been enrolled in the Ticket program. Methods: Data were from 450 Social Security Disability Insurance beneficiaries with psychiatric disabilities enrolled in a multisite study of supported employment. Earnings over two years were used to calculate provider payments under two reimbursement formulas used in the Ticket program. Results: Only a quarter of service recipients (26 percent) reached earnings levels that would have triggered provider payments under the first reimbursement formula. Only 4 percent would have completed their trial work period and left the rolls, generating payments under the second formula. Conclusions: The current provider payment systems of the Ticket to Work program do not reflect the reality of rehabilitation for individuals with severe mental illness. Reforms should take into account outcomes of return-to-work services for this population.

The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding

Abstract: More than 80 percent of nonelderly U.S. adults are insured against the risk of disabling physical or mental illness by Social Security Disability Insurance (SSDI). This article evaluates the causes of the extraordinary growth in SSDI enrollment, considers its fiscal ramifications, and discusses potential policy responses. While aggregate population health has improved by most measures in recent decades, the rate of SSDI receipt among nonelderly adults has nearly doubled since 1984. We project that SSDI receipt will rise by an additional seventy percent before reaching a steady state rate of approximately 6.5 percent of adults between the ages of 25 and 64, with cash benefit payments exceeding $150 billion annually (excluding Medicare). We trace the rapid expansion of SSDI to: (1) congressional reforms to disability screening in 1984 that enabled workers with low mortality disorders such as back pain, arthritis and mental illness to more readily qualify for benefits; (2) a rise in the after-tax DI income replacement rate, which strengthened the incentives for workers to seek benefits; (3) and a rapid increase in female labor force participation that expanded the pool of insured workers. Notably, the aging of the baby boom generation has contributed little to the growth of SSDI to date. Among several avenues for reducing SSDI growth, we suggest that the most promising are revamping the disability appeals process--in which the Social Security Administration currently loses nearly three-quarters of all appeals--and reducing the attractiveness of DI benefits for work-capable disabled individuals by providing additional access to public health insurance. By contrast, previous efforts to reduce the SSDI rolls by discontinuing benefits or by providing stronger return-to-work incentives have proved remarkably unsuccessful.

Disability insurance: can underwriting criteria for the self-employed be based on predictors used for disability amongst employees?

Abstract: OBJECTIVE: This study aims to trace risk factors for disability amongst the self-employed. Knowledge about these risk factors can contribute to more evidence-based underwriting criteria for disability insurance. BACKGROUND: The trend towards privatization of social disability services in certain insurance markets creates a need to consider the appropriateness of underwriting criteria in applications for individual private disability insurance. METHODS: The authors performed a literature study and undertook a consultation amongst experts. RESULTS: More than 350 articles were traced. Only one article precisely matches the field of research: risk factors in underwriting disability insurance for the self-employed. Risk factors and medical characteristics in long-term disability are not identical between the employed and self-employed populations. Relevant risk factors for the self-employed are gender, age, occupational class, socioeconomic status, medical consumption, lifestyle, coping behavior, previous sick leave, replacement ratio and policy terms. CONCLUSIONS: The scarce amount of research on risk factors for disability amongst the self-employed forces insurers to rely on the limited statistical data available and pragmatic interpretation of this data. Underwriting criteria for the self-employed can partially be based on predictors for disability for employees. Whether the self-employed and employees are exposed to different risk factors or are basically different populations needs further research. The holistic approach of the International Classification of Functioning, Disability and Health model as a framework for developing a risk assessment model, with a strong focus on personal and environmental factors, will bring the current medical model at the underwriting stage more in line with the social model at claim stage

The functional IME: A linkage of expertise across the disability continuum.

Abstract: Disability assessment remains a significant challenge especially in welfare systems like workers' compensation and disability insurance. Many of today's managed care strategies do not impact on the seminal issue of return to gainful employment. Employers, insurers, attorneys and case managers routinely request independent medical examinations (IMEs) as a means of determining degree of disability, functional limitations, work restrictions and "estimated" physical capacities. However, this approach is limited because physicians are not trained in the functional model of disability assessment. IMEs address pathology and impairments which represent a portion of the disability continuum described by the World Health Organization, Nagi, Guccione and others [e.g. pathology-impairment-disability-handicap]. Functional capacity evaluations or FCEs are often performed by physical and occupational therapists who are trained in a function-based model of disability assessment. Unlike an IME physician who completes "Estimated Physical Capacities", therapists measure actual physical functioning. The value of both IMEs and FCEs can be enhanced through a "functional IME" that combines both models; medical-based examination and a function-based disability evaluation. This combination enhances the assessment of the relationship of pathology to impairment and impairment to disability status especially, in musculoskeletal disorders which tend to drive costs in workers' compensation.

Re-entry to recovery: A promising return-to-work approach for certain offenders with mental illness

Abstract: A demonstration project being designed by the Social Security Administration (SSA) and Rutgers University may provide an effective option for assisting eligible offenders with mental illness in obtaining employment during re-entry to their communities. The project, Early Intervention (EI), will provide temporary cash stipends, immediate Medicare, and innovative employment services and supports to eligible applicants for Social Security disability insurance (DI). The EI project is a broad departure from previous SSA employment initiatives in both philosophy and structure, addressing a host of commonly cited barriers to employment for persons with disabilities in new and different ways. Should the demonstration project prove successful and be adopted into a national program, EI has the potential to provide an important source of support to eligible offenders with mental illness who are transitioning back to their communities.

Disability Insurance Adjudication Criteria and the Incidence of Hard-to-Diagnose Medical Conditions

Abstract: I examine the effects of a change in Canada Pension Plan disability program adjudication criteria on individual reports of medical problems. The estimates from this paper suggest that more stringent screening requirements are associated with a statistically significant decline in the reports of hard-to-diagnose conditions, such as low back pain. On the other hand, my estimates also indicate that changes in adjudication requirements do not have a statistically significant effect on the reports of easier to diagnose conditions.

Disability insurance and optimal income taxation

Abstract: This paper studies the design of disability insurance scheme when agents differ in their privately known productivity. We extend the Diamond and Mirrlees (1978) two period model to allow for agents differing ex-ante in their productivity and characterize the optimal nonlinear tax transfer that maximizes a utilitarian welfare function when per-period earnings and age are observable while individuals’ productivity and health status are not observable. We show that the induced tax/benefit scheme should exhibit a marginal income tax that decreases with age for some agents. A marginal subsidy on the young high productive income may be desirable. While the disability scheme always involves the old low productive agents to be indifferent between working and claiming disability benefits, this result is not always true for the old high productive agents.

The point of view of the insurance company

Abstract: The message behind this quote is right up-to-date. However, it dates back almost 40 years – it is taken from the statement by the Council of Ministers to the Swiss parliament in 1958. This formed the basis for the introduction of disability insurance in Switzerland. It introduced a new approach; previously the task of helping the disabled was primarily seen as ensuring a minimum living income for the disabled by means of public and private welfare.

Focus on Personal Finance: An Active Approach to Help You Develop Successful Financial Skills

Abstract: Chapter 1 Personal Financial Planning in Action Chapter 2 Money Management Skills Chapter 3 Taxes in Your Financial Plan Chapter 4 Financial Services: Saving Plans and Payment Accounts Chapter 5 Consumer Credit: Advantages, Disadvantages, Sources, and Costs Chapter 6 Consumer Purchasing Strategies and Wise Buying of Motor Vehicles Chapter 7 Selecting and Financing Housing Chapter 8 Home and Automobile Insurance Chapter 9 Health and Disability Insurance Chapter 10 Financial Planning with Life Insurance Chapter 11 Investing Fundamentals and Bonds Chapter 12 Investing in Stocks Chapter 13 Investing in Mutual Funds Chapter 14 Starting Early: Retirement and Estate Planning Appendix A Education Financing, Loans, and Scholarships Appendix B Developing a Career Search Strategy Appendix C Consumer Agencies and Organizations Appendix D Daily Spending Diary Index