Demographic and economic factors explain much of the increase in the number of people receiving Social Security disability benefits in recent decades. But that’s not the impression you’d get from some alarmist recent reports. Senator Tom Coburn (R-OK), a member of the President’s fiscal commission, told the commission that disability payments were “out of control,” and authors of a new Brookings Institution report described the program as a “rapidly growing expense” that has “largely escaped the scrutiny of policymakers.”
This month, 8.2 million people will receive disabled-worker benefits from Social Security. (Payments will also go to some of their family members: 160,000 spouses and 1.8 million children.) The number of disabled workers has doubled since 1995, while the working-age population — conventionally described as people age 20 through 64 — has increased by only about one-fifth. But that comparison is deceptive. Over that period:
* Baby boomers aged into their high-disability years. People are roughly twice as likely to be disabled at age 50 as at age 40, and twice as likely to be disabled at age 60 as at age 50. As the baby boomers (people born in 1946 through 1964) have grown inexorably older, disability cases have risen.
* More women qualified for disability benefits. In general, workers with severe impairments can get disability benefits only if they’ve worked for at least one-fourth of their adult life and for five of the last ten years. Until the great influx of women into the workforce that occurred in the 1970s and 1980s, relatively few women met those tests; as recently as 1990, male disabled workers outnumbered women by nearly a 2 to 1 ratio. Now that more women have worked long enough to qualify for disability benefits, the ratio has fallen to just 1.1 to 1.
* Social Security’s full retirement age rose from 65 to 66. When disabled workers reach the full retirement age, they begin receiving Social Security retirement benefits rather than disability benefits. The increase in the retirement age from 65 to 66 has delayed that conversion for many workers. This month, over 300,000 people between 65 and 66 are collecting disability benefits; under the rules in place a decade ago, they would be receiving retirement benefits instead.
The Social Security actuaries express the number of people receiving disability benefits using an “age- and sex-adjusted disability prevalence rate” that controls for these factors. Over the 1995-2010 period, that rate rose from 3.5 percent of the working-age population to 4.4 percent. That’s certainly an increase, but not nearly as dramatic as the alarmists paint
Not surprisingly, the rate crept upward during periods of economic distress. Anecdotally and statistically, we know that many workers who can’t find jobs and who exhaust their unemployment benefits turn to disability insurance.
Here’s an entertaining fact for you: My brother-in-law Vincent receives toe and toenail care at the podiatrist. No he doesn’t wear toenail polish like Frank Burns did on M*A*S*H. A combination of skin issues, chronic obesity, and intellectual disability create mundane but important foot problems for Vincent that require serious attention.He’s unlucky enough to require Medicaid. Luckily for him, though, he doesn’t live in South Carolina (h/t Diane Meier’s valuable tweets), since that state will no longer cover these mundane but important services. As today’s WYFF4 news puts it:
Starting in February 2011, Medicaid will no longer cover podiatry services, routine eye exams or dental services for anyone older than 21. Routine circumcisions for newborns, diabetic equipment and services and some wheelchair accessories are on the list. Hospice care services will also be eliminated.
You read that last one correctly. The state will no longer provide Medicaid coverage for hospice care.
Like an anxious investor watching a crashing stock market, I’m seeing what’s happening with Medicaid and wondering when states will finally hit bottom. One might think Arizona’s transplant policy provides a credible floor (listen here if you haven’t been following this). But maybe not. Here’s what is coming later to South Carolina:
In April, Medicaid will eliminate services under the state’s Community Long-term Care Program, which provides services to people at their home. That includes chore and appliance services, nutritional supplements, adult day health care nursing services and respite service. There will also be a reduction in the number of meals delivered to the home each week.
That’s a new one. Meals on wheels will apparently reduce its weekly meal deliveries from fourteen to ten.
I don’t quite know what to say, except to hope that this is some budgetary game of chicken, and these cuts don’t actually happen. Given what is happening around the country, there’s little reason to be hopeful.