UNDERSTANDING SOCIAL SECURITY: Why Disability Claims Are Soaring

BY MICHAEL P. BOYLE, ESQ./ This week I will address recent testimony given by Kathy A. Ruffing, a Senior Fellow at the Center on Budget & Policy Priorities, before the Subcommittee on Social Security in the US House of Representatives.

According to Ruffing, “the bulk of the rise in federal disability rolls stems from demographic factors: the aging of the US population, the growth in women’s employment, and Social Security’s rising retirement age.”

Ruffing told the Subcommittee “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.” Ruffing noted the increase in full retirement age from 65 to 66 has added to claimants receiving disability benefits (DI).

Ruffing observed that, in December 2012, more than 450,000 people between 65 and 66 — over 5% of all DI beneficiaries — collected disabled-worker benefits. Under the applicable rules 10 years ago, they would have received retirement benefits instead. Ruffing reported that, until the mid-1990s, “insured women of any age– … who had worked enough to qualify for DI in the event of disability — were only about three-fourths as likely as insured men to receive DI benefits.” She added, “Now they are equally likely to do so.”

Ruffing also told the Subcommittee, “The accelerating pace of globalization and technological change has been particularly unforgiving to older, less-educated workers and those with cognitive impairments.” She noted that, in the past, these workers “might have been able to find jobs [but] the combination of poor health and poor labor market prospects has probably tipped many onto the disability rolls.”

She also observed, “With employer-sponsored health insurance eroding and the individual-policy market becoming costlier or outright unavailable, Medicare eligibility may loom larger and larger in some workers’ decisions to apply for DI.”

I will discuss more of Ruffing’s testimony in next week’s column.

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