Nancy Germond wrote a fascinating article about the dramatic increase in the number of Americans receiving Social Security Disability Income over the last twenty years. In two decades, the percentage of Americans on SSDI nearly doubled, and is continuing to increase. Nancy cites the National Bureau of Economic Research, which has recommended “reducing the attractiveness of DI benefits for work-capable disabled individuals by providing additional access to public health insurance.” After being on SSDI for two years, a disabled person qualifies for Medicare, which may be a factor in motivating people to apply for SSDI, especially if they have few other options for health insurance coverage.
Since access to Medicare for people with disabilities is dependent upon remaining disabled for at least two years, and then continuing to receive SSDI, there is little motivation for people with disabilities to return to the workforce, especially if they were working at a low paying job, or one that did not provide health insurance benefits. It will be interesting to see what effect the Patient Protection and Affordable Care Act has on the number of people receiving SSDI and Medicare coverage. Starting in 2014, health insurance will be guaranteed issue, with no exclusions or denials for pre-existing conditions. Currently, a person who qualifies for SSDI is very unlikely to qualify for an individual health insurance policy, simply because whatever condition is causing the disability is likely to also result in a decline from insurance underwriters. And if the person is unable to work because of a disability, employer sponsored health insurance is also unlikely to be available, unless the person has coverage through a spouse’s policy. So a sick or injured person currently has a lot of incentive to remain disabled and eventually qualify for Medicare. This is not to say that the disabilities are not genuine, but simply to note that there are few health insurance options for people with disabilities in our current system, and the promise of Medicare after two years is probably appealing to both the person with the disability and also to their family members and care givers.
The National Bureau of Economic Research recommendation that we increase access to public health insurance (which would include existing programs like Medicare and Medicaid) is an interesting proposal. Being in the workforce provides a general sense of wellbeing and productivity that is not replicated by simply receiving a check from the SSDI program. Would the number of people receiving SSDI decrease (and thus save money for the Social Security Administration) if sick and injured people were allowed to purchase subsidized access to Medicare and Medicaid? Will guaranteed issue health insurance – and subsidies to help pay for it – starting in 2014 also help to decrease the number of people receiving SSDI? If people had a way to obtain affordable health insurance without having to qualify as disabled, it stands to reason that there would be more incentive for people to return to work after a serious illness or injury.
Nancy’s article was included in the Cavalcade of Risk this week.