[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
CHALLENGES FACING SOCIAL SECURITY DISABILITY PROGRAMS IN THE 21ST
CENTURY
=======================================================================
HEARING
before the
SUBCOMMITTEE ON SOCIAL SECURITY
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
JULY 13, 2000
__________
Serial 106-94
__________
Printed for the use of the Committee on Ways and Means
U.S. GOVERNMENT PRINTING OFFICE
68-103 WASHINGTON : 2001
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC
20402
COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
BILL THOMAS, California FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana JIM McDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania KAREN L. THURMAN, Florida
WES WATKINS, Oklahoma LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
______
Subcommittee on Social Security
E. CLAY SHAW, Jr., Florida, Chairman
SAM JOHNSON, Texas ROBERT T. MATSUI, California
MAC COLLINS, Georgia SANDER M. LEVIN, Michigan
ROB PORTMAN, Ohio JOHN S. TANNER, Tennessee
J.D. HAYWORTH, Arizona LLOYD DOGGETT, Texas
JERRY WELLER, Illinois BENJAMIN L. CARDIN, Maryland
KENNY HULSHOF, Missouri
JIM McCRERY, Louisiana
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed hearing record remains the official
version. Because electronic submissions are used to prepare both
printed and electronic versions of the hearing record, the process of
converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
Page
Advisory of July 6, 2000, announcing the hearing................. 2
WITNESSES
U.S. General Accounting Office, Barbara D. Bovbjerg, Associate
Director, Education, Workforce, and Income Security Issues,
Health, Education and Human Services Division; accompanied by
Carol Petersen, Assistant Director, Education, Workforce, and
Income Security Issues, Health, Education, and Human Services
Division....................................................... 6
U.S. Department of Health and Human Services, Donald Lollar,
Ed.D., Chief, Disability and Health Branch, National Center for
Environmental Health, Centers for Disease Control and
Prevention..................................................... 37
______
Berkowitz, Edward D., George Washington University............... 32
Burkhauser, Richard V., Cornell University....................... 44
Consortium for Citizens with Disabilities, and NISH, Tony Young.. 61
OMG Center for Collaborative Learning, Richard C. Baron.......... 40
UnumProvident Corporation, Ralph Mohney.......................... 55
SUBMISSIONS FOR THE RECORD
Social Security Administration, Kenneth Nibali, Assistant
Commissioner for Disability, statement......................... 76
______
American Occupational Therapy Association, Inc., Bethesda, MD,
statement...................................................... 81
National Association of Disability Examiners, Lansing, MI, Terri
Spurgeon, statement and attachments............................ 83
CHALLENGES FACING SOCIAL SECURITY DISABILITY PROGRAMS IN THE 21ST
CENTURY
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THURSDAY, JULY 13, 2000
House of Representatives,
Committee on Ways and Means,
Subcommittee on Social Security,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:07 a.m., in
room B-318, Rayburn House Office Building, Hon. E. Clay Shaw
(Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE
COMMITTEE
ON WAYS
AND
MEANS
SUBCOMMITTEE ON SOCIAL SECURITY
CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
July 6, 2000
No. SS-20
Shaw Announces Hearing on Challenges Facing Social Security Disability
Programs in the 21st Century
Congressman E. Clay Shaw, Jr., (R-FL), Chairman, Subcommittee on
Social Security of the Committee on Ways and Means, today announced
that the Subcommittee will hold a hearing to examine the challenges
facing the Social Security Disability Insurance (SSDI) and Supplemental
Security Income (SSI) programs in the 21st century. The hearing will
take place on Thursday, July 13, 2000, in room B-318 Rayburn House
Office Building, beginning at 10:00 a.m.
Oral testimony at this hearing will be from invited witnesses only.
Witnesses will include representatives of the U.S. General Accounting
Office, disability experts, and advocates for people with disabilities.
However, any individual or organization not scheduled for an oral
appearance may submit a written statement for consideration by the
Committee and for inclusion in the printed record of the hearing.
BACKGROUND:
The SSDI and SSI programs provide cash benefits to individuals who
are unable to work because of severe disabilities. In 1999, nearly five
million disabled workers and their families received more than $50
billion from the SSDI program, and four million low-income disabled
adults received $24 billion from SSI. Most of these beneficiaries also
received health insurance through Medicare and Medicaid because they
qualified for this cash assistance.
The Social Security Act first addressed the issue of disability in
1952 by excluding income earned while disabled from the computation of
retirement benefits. The 1954 amendments provided cash benefits, but
only for disabled individuals who were at least age 50. The lower age
limit was removed in 1960. The definition of disability has remained
essentially unchanged since the beginning of the SSDI program, and the
same definition was adopted for the SSI program when it began providing
benefits for low-income people with disabilities in 1974.
In recent years, numerous technological and medical advances,
coupled with a growing economy, have created the potential for more
people with disabilities to achieve independence. In addition, the
``Americans with Disabilities Act of 1990'' (P.L. 101-336), has helped
promote the full participation of people with disabilities in society
and has fostered the expectation that people with disabilities can work
and have the right to work. The ``Ticket to Work and Work Incentives
Improvement Act of 1999'' (P.L. 106-170), provided new opportunities
for adults receiving public benefits to pursue work without fear of
losing all benefits.
The safety net provided by the Social Security disability program
is critically important for individuals with disabilities and their
families. Maintaining the safety net will be particularly challenging
in coming decades, when, like Social Security, the disability program
faces financial challenge. According to the 2000 Annual Report of the
Board of Trustees, beginning in 2007, the Disability Insurance Trust
Fund is projected to run cash deficits and by 2023, the trust fund
assets will be exhausted.
In announcing the hearing, Chairman Shaw stated: ``Social
Security's disability programs have provided vital assistance for
people with disabilities for nearly 50 years. Fortunately, today
individuals with disabilities have opportunities and support never
imagined in years past. As we enter the 21st century, we need to ensure
Social Security disability programs continue to meet the changing needs
of people with disabilities.''
FOCUS OF THE HEARING:
The hearing will focus on the characteristics of people with severe
disabilities and will identify the supports needed to achieve
independence. The hearing will also examine how disability systems in
other countries as well as in the private sector have adapted to meet
the changing needs of people with disabilities.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Any person or organization wishing to submit a written statement
for the printed record of the hearing should submit six (6) single-
spaced copies of their statement, along with an IBM compatible 3.5-inch
diskette in WordPerfect or MS Word format, with their name, address,
and hearing date noted on a label, by the close of business, Thursday,
July 27 , 2000, to A.L. Singleton, Chief of Staff, Committee on Ways
and Means, U.S. House of Representatives, 1102 Longworth House Office
Building, Washington, D.C. 20515. If those filing written statements
wish to have their statements distributed to the press and interested
public at the hearing, they may deliver 200 additional copies for this
purpose to the Subcommittee on Social Security office, room B-316
Rayburn House Office Building, by close of business the day before the
hearing.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a
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comments must conform to the guidelines listed below. Any statement or
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but will be maintained in the Committee files for review and use by the
Committee.
1. All statements and any accompanying exhibits for printing must
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The above restrictions and limitations apply only to material being
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and the public during the course of a public hearing may be submitted
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Note: All Committee advisories and news releases are available on
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The Committee seeks to make its facilities accessible to persons
with disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
business days notice is requested). Questions with regard to special
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materials in alternative formats) may be directed to the Committee as
noted above.
Chairman Shaw. Today we will explore the challenges facing
Social Security disability programs in the 21st century. Like
Social Security retirement and survivor programs, the
disability program has been remarkably successful in providing
financial and health care support of those unable to work
because of their disabilities. Yet, this vital program faces
more immediate financial challenge than that faced by the
retirement program.
Beginning in just 7 years, disability program outlays will
exceed income. By the year 2023 the trust fund will no longer
be able to pay full benefits. Securing the financial future of
this essential safety net is paramount as we begin the 21st
century. Much has changed over the nearly 50 years of history
of this program. This month we are celebrating our 10th
anniversary of the Americans with Disabilities Act.
This landmark legislation has helped to change the
expectations for work for many people with disabilities as well
as expand the consciousness of Americans to view people with
disabilities in terms of their abilities, not their
disabilities. Medical and technological advances have made it
possible for many individuals to achieve independence even
though it is independence that they never thought was possible.
The Ticket to Work and Work Incentive Improvement Act of
1999 developed in large part by this Subcommittee and signed
into law last December removed barriers preventing individuals
from becoming self-sufficient by providing extended health care
coverage and providing more choice and opportunities to obtain
needed rehabilitation and support services. These are important
achievements but we must do more. Today we will begin our work
by learning more about the characteristics of people with
severe disabilities today and the support that they need to
achieve independence.
We also examine how disability systems in other countries
as well as in the private sector have adapted to meet the
changing needs of people with disabilities. I look forward to
hearing the advice and suggestions of the experts that we have
assembled in this room today. Mr. Matsui.
Mr. Matsui. Thank you, Mr. Chairman. As many members in
this room are aware, one of our successes in this Congress was
enacting the Ticket to Work and Work Incentives Improvement
bill last year. The Ticket to Work Act when fully implemented
will help disabled Social Security beneficiaries receive the
rehabilitation services they need to return to the labor force.
The Ticket to Work Act also provides disabled beneficiaries who
return to work with extended health care coverage to increase
the likelihood that they will be able to remain in the work
force.
The Ticket to Work Act represents a great step forward in
helping people with disabilities to participate in our Nation's
economy and to share in the prosperity of recent years.
However, we should not consider it the end of our journey. We
still have much further to go before we can call our efforts
complete. Consequently, I would like to thank Chairman Shaw for
holding today's hearing for I think it is vitally important to
examine new ideas for helping people with disabilities realize
their goals to participate in the work force.
During today's hearing, we will hear testimony about the
different approaches foreign countries and private insurance
utilize to help people with disabilities and enhance their
ability to return to work. While I am sure we can learn a
number of lessons from these countries and private insurers, we
do need to keep several things in mind as we explore new ways
to help people return to work.
We must be aware that many differences may exist between
populations and that the disability programs abroad and private
insurers serve populations that may differ somewhat than ours.
For instance, private insurance have the luxury of deciding
their risk pools while SSA does not. We must also recognize the
differences that exist between the United States and other
industrialized nations in terms of the delivery of social
services and the implications that those differences have for
the disabled community.
Health insurance is the prime example. In crafting the
Ticket to Work Act last year, we went through a major struggle
for relatively modest extensions of health care coverage for
those disability beneficiaries returning to work. Indeed, in
the end the Congress agreed to a Ticket to Work Act providing
8.5 years of Medicare coverage for disabled beneficiaries
rather than the full 10 years in the original House bill. This
aspect of the debate would not be of great concern abroad
because of universal health care coverages in those countries.
In addition, we must be clear that our goal is not simply
to move people with disabilities off the beneficiary rolls but
to help them secure a job with salaries that can be supportive
to them. One of our witnesses today will testify about a study
that he recently conducted that reveals that people with severe
mental impairments who are gainfully employed are still
frequently poor and are likely to remain so because most of
their jobs are low wage, entry level positions.
Finally, we should expect Social Security to maximize the
effectiveness of its resources for helping people to return to
work but we should also be realistic. We cannot delude
ourselves and think that with a few shifts in policy we can do
the job and Social Security can do the job on its own within
its current budget. Further progress in assisting people with
disabilities to return to work will require a sustained
commitment from across the Federal bureaucracy and may well
require dedication of additional resources. So, Mr. Chairman,
again I want to thank you for calling this hearing and
obviously thank all the witnesses as well.
Chairman Shaw. Thank you, Bob. Our first panel this morning
is a friend of this Committee, Barbara Bovbjerg, who is the
Associate Director, Education, Workforce and Income Security
Issues, Health, Education and Human Services Division of the
United States General Accounting Office, and she has with her
Carol Petersen, who is the Assistant Director, Education,
Workforce, and Income Security Issues. Welcome, both of you.
As other panels, we have your full statement which will be
placed in the record, and we invite you to proceed as you see
fit. Ms. Bovbjerg.
STATEMENT OF BARBARA D. BOVBJERG, ASSOCIATE DIRECTOR,
EDUCATION, WORKFORCE, AND INCOME SECURITY ISSUES, HEALTH,
EDUCATION, AND HUMAN SERVICES DIVISION; ACCOMPANIED BY CAROL
PETERSEN, ASSISTANT DIRECTOR, EDUCATION, WORKFORCE, AND INCOME
SECURITY ISSUES, HEALTH, EDUCATION, AND HUMAN SERVICES DIVISION
Ms. Bovbjerg. Thank you, Mr. Chairman. Mr. Chairman, Mr.
Matsui, I am pleased to be here to discuss practices that help
people with severe disabilities return to work. The Disability
Insurance and Supplemental Security Income Programs
administered by the Social Security Administration provide
benefits to millions of people with long-term disabilities.
Although many of these programs' beneficiaries want to work and
technological and medical advances have increased the potential
for them to do so, less than 1% of SSA's disabled beneficiaries
successfully return to work each year.
Disability systems in the private sector and other
countries have designed programs to help disabled workers who
can work, do so. Although measures taken by these other systems
may not translate directly to SSA's disability programs their
practices and experiences may provide approaches for SSA to
draw upon. My testimony is based on our ongoing review of these
practices for this Subcommittee in which we have interviewed
managers of three private sector disability insurers and
disability program officials in Germany, Sweden and the
Netherlands.
Today I would like to focus my remarks in two areas. First,
how disability systems in the private sector and three other
counties facilitate and encourage return to work, and, second,
how these practices compare with the DI program. I make this
distinction, DI/SSI, because DI beneficiaries' work experience
is more comparable to that of employees with private disability
insurance, but many of the comparisons we will discuss apply to
the SSI Program as well.
First, the systems in the private sector and other
countries. These systems integrate return-to-work
considerations early after disability onset and continue them
throughout the eligibility assessment process. With the initial
reporting of a disability claim, these disability insurers
immediately set up the expectation that the claimant will
return to work, and collaborate closely with the claimant, the
treating physician, and the employer to assess what support is
needed.
These systems also provide incentives for claimants to take
part in individualized return-to-work programs and to receive
appropriate medical treatment. They also provide incentives for
employers to offer work to claimants. Claimants with work
potential are required to participate in individualized
programs that may include vocational rehabilitation. Claimants
are also assessed medically and required to obtain appropriate
medical treatment. Insurers offer assistance in obtaining such
treatment where necessary.
Employer incentives involve paying for employee
accommodation, subsidizing wages, or reducing premiums for
employers who re-employ disabled workers.
Managers of these other systems also explained to us that
they match appropriately trained staff with different types of
claims to provide cost-effective return-to-work assistance.
Both the insurers and other countries triage claims by the
claimant's work potential. They have access to staff with a
range of skills and expertise and they apply this expertise
where it could be most effective to assess and enhance
claimant's capacity to work.
Let me now turn to SSA's approach. Historically, the agency
has placed little emphasis on helping beneficiaries return to
work. More recently, however, the agency has begun placing a
greater priority on this area. For example, the Office of
Employment Support Programs has been established to promote
employment of disabled beneficiaries through a variety of means
including sponsoring research and working to remove employment
barriers.
Moreover, the new Ticket to Work Act, by expanding access
to vocational rehabilitation services, is also expected to
enhance work opportunities for people with disabilities.
But despite these advances, fundamental policy weaknesses
in the DI program remain. These weaknesses include an
eligibility determination process that concentrates on
applicants' incapacities, an all or nothing benefit structure
and return to work services offered only after a lengthy
determination process.
This is not to say that SSA could effectively engage in all
the practices that private insurers and other countries have
adopted. Little hard data exist on the effectiveness of return-
to-work approaches used in these other systems and even less
information is available with regard to cost. Furthermore, it
is unclear that successful practices in other countries would
succeed in another socio-political environment or that private
sector policies could prove directly adaptable to public sector
priorities.
Nonetheless, as we have recommended in the past, SSA needs
to adopt a comprehensive strategy for returning beneficiaries
to work and could usefully draw upon the approaches of other
systems in so doing. Because such a strategy may require
fundamental changes to the underlying philosophy and direction
of the disability programs, policymakers would need to weigh
carefully the implications of such changes.
However, the prospect of helping individuals improve their
productive potential should provide ample reason to consider
the experiences of these other systems. Mr. Chairman, that
concludes my statement and I welcome your questions.
[The prepared statement follows:]
Statement of Barbara D. Bovbjerg, Associate Director, Education,
Workforce, and Income Security Issues, Health, Education, and Human
Services Division
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me here today to discuss the practices of
the private sector and other countries in helping people with severe
disabilities return to work. Each month the Social Security
Administration's (SSA) Disability Insurance (DI) program pays over $4
billion in cash benefits to people with disabilities. The DI
beneficiary population has grown significantly over the past 15 years,
increasing by 67 percent, while benefit payments have nearly tripled.
This growth has contributed to the DI Trust Fund's projected insolvency
in 2023. Yet, during this period of program growth, numerous
technological and medical advances, combined with changes in society
and the nature of work, have increased the potential for some people
with disabilities to return to, or remain in, the labor force. Many
beneficiaries with disabilities indicate that they want to work and be
independent, and many can work if they receive the supports they need,
yet fewer than one-half of 1 percent of DI beneficiaries leave the
rolls each year to return to work.
The U.S. private sector, as well as other countries, has designed
disability systems to help disabled workers return to work. In recent
years, a growing number of private insurance companies have been
focusing on developing and implementing strategies for controlling
disability costs by enabling people with disabilities to return to
work. Disability programs financed by social insurance systems in other
countries also focus on return to work and have implemented practices
similar to those in the U.S. private sector.
Today I would like to discuss how disability systems in the private
sector and other countries encourage and facilitate return to work in
three key areas: (1) the eligibility assessment process, (2) work
incentives, and (3) staffing practices. I will describe these three
elements for U.S. private sector disability insurers and for other
countries' social insurance systems and compare the practices of both
with those of the DI program. We are comparing these practices with
those of the DI program because the work experience of the DI
population is most comparable to that of employees covered under
private disability insurance. However, many of the comparisons
discussed would be applicable as well to SSA's other disability
program, Supplemental Security Income (SSI).
To develop this information, we conducted in-depth interviews and
reviewed policy documents and program data at three private sector
disability insurers: UNUMProvident, Hartford Life, and CIGNA.\1\ We
also interviewed program officials and other experts on the disability
systems of Germany, Sweden, and The Netherlands and reviewed policy
documents and studies of these programs. This work updates and expands
on our previous work in this area.\2\
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\1\ Taken together, these three insurers have experience not only
in long-term, stand-alone disability insurance, but also in integrating
short-and long-term disability insurance with workers' compensation
and, in one instance, with health care. These insurers are also among
the largest long-term disability insurers in the country, together
covering about 52 percent of the long-term U.S. private disability
insurance market in 1997. We focused our analysis on the population of
applicants and beneficiaries whose disabilities are of such severity
that they would likely qualify for SSA's disability benefits. In
addition, we focused our review on private insurers' group disability
insurance policies, which contain return-to-work incentives.
\2\ See SSA Disability: Return-to-Work Strategies From Other
Systems May Improve Federal Programs (GAO/HEHS-96-133, July 11, 1996).
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In summary, the disability systems of the private insurers and the
countries we reviewed integrate return-to-work considerations early
after disability onset and throughout the eligibility assessment
process. This involves both determining--as well as enhancing--the
ability of each claimant to return to work. In addition, these systems
provide incentives for claimants to take part in vocational
rehabilitation programs and to obtain appropriate medical treatment and
for employers to provide work opportunities for claimants. Managers of
these other systems also explained to us that they have developed
techniques--such as separating (or ``triaging'') claims--to use staff
with the appropriate expertise to provide return-to-work assistance to
claimants in a cost-effective manner. Although these practices are
common to the private sector insurers and the countries whose systems
we examined, limited data exist on the cost-effectiveness of these
approaches.
SSA may face greater difficulty in returning some of its
beneficiaries to work than the private sector insurers, since DI covers
a broader population than the private insurers. Nevertheless,
opportunities exist to help disabled workers remain at or return to the
workplace. In recognition of these opportunities, SSA has recently
begun placing greater priority on returning beneficiaries to work.
Moreover, the new Ticket to Work and Work Incentives Improvement Act of
1999 (Ticket to Work Act), by expanding access to vocational
rehabilitation services, is expected to enhance work incentives for
people with disabilities. However, fundamental policy weaknesses in the
DI program remain unchanged. As we have reported in the past, these
weaknesses include an eligibility determination process that
concentrates on applicants' incapacities, an ``all-or-nothing''
benefits structure, and return-to-work services offered only after a
lengthy determination process.
To address these policy weaknesses, we continue to believe--as we
recommended in 1996--that SSA should develop a comprehensive return-to-
work strategy. In developing the strategy, SSA can draw upon the
experiences of other systems to identify elements of a new federal
disability system that could help each individual realize his or her
productive potential without jeopardizing the availability of benefits
for people who cannot work. Having identified these elements, SSA would
then be in a position to determine the legislative and regulatory
changes needed to test and evaluate the effectiveness of these
practices in the federal disability system.
Background
DI provides monthly cash benefits to workers who are unable
to work because of severe long-term disability. Established in
1956, DI is an insurance program funded by payroll taxes paid
by workers and their employers into a Social Security Trust
Fund. Workers who have worked long enough and recently enough
become insured for DI coverage. In addition to cash assistance,
DI beneficiaries receive Medicare coverage after they have
received cash benefits for 24 months. In 1999, 4.9 million
disabled workers received DI cash benefits totaling about $46.5
billion, with average monthly cash benefits amounting to $755
per person.\3\
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\3\ In the same year, DI also paid about $4.9 billion in cash
benefits to about 1.7 million spouses and children of disabled workers.
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To meet the definition of disability under DI, an
individual must have a medically determinable physical or
mental impairment that (1) has lasted or is expected to last at
least 1 year or to result in death and (2) prevents the
individual from engaging in substantial gainful activity.
Individuals are considered to be engaged in substantial gainful
activity if they have countable earnings at or above a certain
dollar level.\4\ Moreover, the statutory definition specifies
that, for a person to be determined to be disabled, the
impairment must be of such severity that the person not only is
unable to do his or her previous work, but, considering his or
her age, education, and work experience, is unable to do any
other kind of substantial work that exists in the national
economy. SSA pays state disability determination service (DDS)
agencies to determine whether applicants are disabled. The
program offers people on the DI rolls incentives that are
intended to encourage beneficiaries to return to work--and,
potentially, to leave the rolls. For example, the DI work
incentives provide for a trial work period in which a
beneficiary may earn any amount for 9 months within a 60-month
period and still receive full cash and medical benefits.
---------------------------------------------------------------------------
\4\ Regulations currently define substantial gainful activity (SGA)
as employment that produces countable earnings of more than $700 a
month for nonblind disabled individuals. The SGA level for individuals
who are blind is set by statute and indexed to the annual wage index.
Currently, the SGA for blind individuals is $1,170 of countable
earnings. SSA deducts from gross earnings the cost of items a person
needs in order to work and the value of support a person needs on the
job because of the impairment before deciding if work is considered
SGA.
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Historically, SSA has given little emphasis to assisting
beneficiaries in returning to work, and we have made a number
of recommendations for improvement. For example, in 1996, we
identified weaknesses in SSA's return-to-work efforts and
recommended that SSA intervene earlier to foster a greater
emphasis on assisting disabled applicants and beneficiaries in
returning to the workforce.\5\ We also reported that the
disability determination process encourages work incapacity
because applicants have a strong incentive to emphasize their
limitations in order to qualify for benefits. In addition, we
observed that the often lengthy and cumbersome application
process may itself reinforce applicants' perceptions of their
inability to work.\6\
---------------------------------------------------------------------------
\5\ See GAO/HEHS-96-133, July 11, 1996.
\6\ See SSA Disability: Program Redesign Necessary to Encourage
Return to Work (GAO/HEHS-96-62, Apr. 24, 1996).
---------------------------------------------------------------------------
SSA has recently begun to place higher priority on
emphasizing return to work for DI beneficiaries. For example,
SSA recently established the Office of Employment Support
Programs to promote the employment of disabled beneficiaries.
In addition, the Ticket to Work Act is expected to enhance work
opportunities for people with disabilities. For example, this
new act expanded eligibility for Medicare for DI beneficiaries
and created a ``Ticket to Work'' voucher program that will
allow beneficiaries a greater choice of vocational
rehabilitation and employment service providers. SSA has also
funded partnership agreements in 12 states that are intended to
help the states develop services to increase the employment of
DI beneficiaries.
Private Disability Insurers Implement Return-to-Work Practices
to Control Costs
Private insurers provide disability insurance to a selected
portion of the U.S. working population. Unlike SSA, private
sector insurers are able to choose the industries to which they
market their policies. The characteristics of the private
insurers' beneficiaries can also differ from those of SSA's
beneficiaries because private insurers can allow employers who
purchase their disability policies to vary coverage by type of
impairment or by class of employee. For example, employers
generally choose to limit coverage for mental impairments to a
maximum of 24 months.\7\ Employers may also choose to provide
long-term disability coverage for only their white collar
employees, rather than for all their employees.
---------------------------------------------------------------------------
\7\ The 24-month limitation on mental impairments does not include
time spent in a hospital or mental institution. Also, the three
insurers vary in their descriptions of the types of mental illness that
are covered under this special limitation. One insurer excludes bipolar
affective disorders, psychotic disorders, and schizophrenia from this
limitation. In contrast, the DI program does not have time-limited
benefits for beneficiaries with mental impairments. In 1999, 26.8
percent of DI disabled workers with an available diagnosis had mental
disorders.
---------------------------------------------------------------------------
The private disability insurance industry, moreover,
provides benefits to many individuals who are not as severely
disabled as the beneficiaries of the DI program. However, for
the insurers reviewed, almost two-thirds of those receiving
private long-term disability benefits also received DI
benefits.\8\ This group of beneficiaries, in the cases of the
two insurers that provided us with comparable data, was
composed of a slightly higher proportion of female and older
beneficiaries than the overall DI population. All the insurers
had a lower proportion of beneficiaries with mental impairments
than the DI population.
---------------------------------------------------------------------------
\8\ For claimants who receive both private and DI benefits, the
private insurers reduce their disability payments by the amount of the
DI payment.
---------------------------------------------------------------------------
Some private sector organizations have recognized the
potential for reducing disability costs through an increased
focus on returning people with disabilities to productive
activity. To accomplish this comprehensive shift in
orientation, the private disability insurers have begun
developing and implementing strategies for helping claimants
return to work as soon as possible, when appropriate. Although
the private sector insurance companies expect a positive effect
on return-to-work outcomes from these strategies, it is too
early to fully measure the effect of these changes. In many
cases, return-to-work processes have only recently been
implemented. Moreover, although the private insurers are now
including return-to-work provisions in the standard contracts
that they are writing, a large number of employees are still
insured under prior contracts that lack these provisions. While
the insurers could not provide us with comprehensive cost-
effectiveness studies, their initial return-to-work rates are
promising. The private insurers reported that, in 1999, between
2 and 3 percent of their long-term disability beneficiaries who
also received DI benefits returned to work or were terminated
from the private sector disability benefit rolls because they
were assessed as having the capacity to work.
Other Countries Also Invest in Return-to-Work Efforts
In contrast to the private sector, which covers a selected
portion of the U.S. working population, the experiences of
Germany, Sweden, and The Netherlands show that return-to-work
strategies are applicable to a population with a wide range of
work histories, job skills, and disabilities. However, these
disability systems operate in a somewhat different social and
political context than the DI program. For example, public
health care programs in these countries ensure that the
retention of health insurance is not an issue in a worker's
decision on whether to apply for benefits, participate in
rehabilitation, or attempt returning to work. In addition,
disability systems in these countries offer short-term as well
as long-term benefits, which provides an important basis for
comprehensive disability case management.
The social insurance disability programs in these countries
have invested in return-to-work efforts and have implemented
practices similar to those in the U.S. private sector. While
the German social insurance system has had a long-standing
focus on the goal of ``rehabilitation before pension,'' the
reorientation of Sweden and The Netherlands toward a return-to-
work focus has occurred mostly within the past decade. Although
rigorous studies demonstrating the cost-effectiveness of
German, Swedish, or Dutch programs generally do not exist, some
limited studies and data indicate positive results from the
return-to-work approach in these disability insurance
systems.\9\
---------------------------------------------------------------------------
\9\ For example, a 1990-92 study of certain return-to-work
practices used by Sweden's social insurance offices concluded that
social insurance costs had been reduced by returning people to the
workplace sooner. Practices assessed included early screening and
contact with disabled individuals.
The Eligibility Assessment Process Integrates Return-to-Work
---------------------------------------------------------------------------
Considerations Throughout
All the private disability insurers and the countries we
reviewed have developed an eligibility process that includes
assessing and enhancing the ability of claimants to work
throughout the process. To enable claimants to return to work
as quickly as possible, insurers incorporate return-to-work
considerations early in the assessment process and throughout a
customized evaluation of each claimant's initial and continuing
eligibility for benefits. In contrast, SSA's return-to-work
efforts occur after its eligibility assessment process. (See
Table 1.)
Table 1:--Comparison of Eligibility Assessment Process Features of Private Insurers and Other Countries With
Those of SSA
----------------------------------------------------------------------------------------------------------------
Process feature Private insurers and other countries SSA
----------------------------------------------------------------------------------------------------------------
Disability definition Definition of disability shifts over ``All-or-nothing'' definition
specified time period from less to more characterizes individuals as either
restrictive, recognizing the possibility unable to work or having the capacity to
of improvement in the capacity to work work.
through provision of supports and
services, such as retraining.
Early intervention Intervention occurs soon after disability There is a long delay in providing
onset to identify return-to-work needs. services because only individuals who
have been awarded benefits--following an
often lengthy assessment process--are
eligible for return-to-work services.
Ongoing assessment of Work capacity is periodically monitored There is no integration of return-to-work
work potential and reassessed, focusing on returning considerations into either the initial or
those with work potential to work. the continuing eligibility assessment
process.
----------------------------------------------------------------------------------------------------------------
Private Insurers Incorporate Return-to-Work Efforts From the
Beginning of the Assessment Process
All the private insurers we observed incorporate return-to-
work considerations early in the assessment process to assist
claimants in their recovery and in returning to work as soon as
possible. With the initial reporting of a disability claim,
these insurers, when appropriate, immediately set up the
expectation that the claimant will return to work. The
insurers' process for assessing and assisting a claimant's
ability to work is illustrated in Figure 1.
[GRAPHIC] [TIFF OMITTED] T8103.001
After receiving a claim, the private insurers' assessment
process begins with determining whether the claimant meets the
initial definition of disability. In general, for all the
private sector insurers we studied, claimants are considered
disabled when, because of injury or sickness, they are limited
from performing the essential duties of their own occupation,
and they earn less than 60 to 80 percent of their predisability
earnings, depending upon the particular insurer.\10\ As part of
determining whether the claimant meets this definition, the
insurers compare the claimant's capabilities and limitations
with the demands of his or her own occupation and identify and
pursue possible opportunities for accommodation--including
alternative jobs or job modifications--that would allow a quick
and safe return to work. A claimant may receive benefits under
this definition of disability for up to 2 years.\11\
---------------------------------------------------------------------------
\10\ The private insurers generally define one's ``own occupation''
as the occupation a person is routinely performing at onset of
disability. They generally assess how the claimant's own occupation is
performed in the national economy, rather than how the work is
performed for a specific employer or at a specific location. Two
insurers have expanded their ``own occupation'' definition of
disability to include a reasonable alternative position. These insurers
require that a claimant who is judged able to do so accept a reasonable
alternative position--a job in the same general location offered by the
claimant's current employer--or risk losing cash benefits. The claimant
must be qualified to perform this alternative position--which must pay
the claimant more than 60 to 80 percent of predisability earnings,
depending upon the insurer--given his or her education, training, or
experience.
\11\ Our review of group disability insurance policies focused on
those with an ``own occupation'' definition of disability that changes
to an ``any occupation'' definition after 2 years.
---------------------------------------------------------------------------
As part of the process of assessing eligibility according
to the ``own occupation'' definition, insurers directly contact
the claimant, the treating physician, and the employer to
collect medical and vocational information and initiate return-
to-work efforts, as needed. Insurers' contacts with the
claimant's treating physician are aimed at ensuring that the
claimant has an appropriate treatment plan focused, in many
cases, on timely recovery and return to work. Similarly, early
contact with the claimant's employer is used to encourage the
employer to make accommodations for claimants with the capacity
to work.
If the insurers find the claimant initially unable to
return to his or her own occupation, they provide cash benefits
and continue to assess the claimant to determine if he or she
has any work potential. For those with work potential, the
insurers focus on return to work before the end of the 2-year
period when, for all the private insurers we studied, the
definition of disability becomes more restrictive: after 2
years, the definition shifts from an inability to perform one's
own occupation to an inability to perform any occupation for
which the claimant is qualified by education, training, or
experience. Claimants may be found ineligible for benefits
under the more restrictive definition.\12\
---------------------------------------------------------------------------
\12\ The private insurers generally use the same ``own occupation''
definition for short-and long-term disability benefits. However, in the
case of long-term benefits, the definition shifts to the ``any
occupation'' definition after 2 years. When applying the ``any
occupation'' definition, private insurers generally try to identify
several occupations that exist locally that could provide a sufficient
salary for the claimant. However, the insurer is obligated only to
identify occupations with a sufficient salary in the national economy
and not to find specific job openings or place the claimant in a new
position.
---------------------------------------------------------------------------
The private insurers' shift from a less to a more
restrictive disability definition after 2 years reflects the
changing nature of disability and allows a transitional period
for insurers to provide financial and other assistance, as
needed, to help claimants with work potential return to the
workforce. During this 2-year period, the insurer attempts to
determine the best strategy for managing the claim. Such
strategies can include, for example, helping plan medical care
or providing vocational services to help claimants acquire new
skills, adapt to assistive devices to increase functioning, or
find new positions. For those requiring vocational intervention
to return to work, the insurers develop an individualized
return-to-work plan, as needed. Basing the continuing receipt
of benefits upon a more restrictive definition after 2 years
provides the insurer with leverage to encourage the claimant to
participate in a rehabilitation and return-to-work program.
Indeed, the insurers told us that they find that claimants tend
to increase their efforts to return to work as they near the
end of the 2-year period.
If the insurer initially determines that the claimant has
no work potential, it regularly monitors the claimant's
condition for changes that could increase the potential to work
and reassesses after 2 years the claimant's eligibility under
the more restrictive definition of disability. In addition, the
insurer looks for opportunities to assist these claimants when
changes in medical technology, such as new treatments for
cancer or AIDS, may enable them to work.
The private insurers that we reviewed told us that they
customize their assessment and enhancement of a claimant's
ability to work throughout the duration of the claim. To do
this, disability insurers use a wide variety of tools and
methods when needed. Some of these tools, as shown in tables 2
and 3, are used to help ensure that medical and vocational
information is complete and as objective as possible. For
example, insurers consult medical staff and other resources to
evaluate whether the treating physician's diagnosis and the
expected duration of the disability are in line with the
claimant's reported symptoms and test results. Insurers may
also use an independent medical examination or a test of basic
skills, interests, and aptitudes to clarify the medical or
vocational limitations and capabilities of a claimant. In
addition, insurers identify transferable skills to compare the
claimant's capabilities and limitations with the demands of the
claimant's own occupation. This method is also used to help
identify other suitable occupations and the specific skills
needed for these new occupations when the claimant's
limitations prevent him or her from returning to a prior
occupation. Included in these tools and methods are services to
help the claimant return to work, such as job placement, job
modification, and retraining.
Table 2:--Tools and Methods Used to Provide Medical Assessment
----------------------------------------------------------------------------------------------------------------
Task Tools and methods
----------------------------------------------------------------------------------------------------------------
Assess diagnosis, treatment, and duration of the Consultation of medical staff and other resources,
impairment and begin developing a treatment plan including current medical guidelines describing
focused on returning the claimant to work promptly and symptoms, expected results from diagnostic tests,
safely. expected duration of disability, and treatment
Assess the claimant's cognitive skills. Standardized mental tests
Validate the treating physician's assessment of the Review of the claimant's file, generally by a nurse or
impairment's effect on the claimant's ability to work a physician who is not the claimant's treating
and the most appropriate treatment and accommodation. physician
Verify diagnosis, level of functioning, and Independent medical examination of the claimant by a
appropriateness of treatment. contracted physician
Evaluate the claimant's ability to function, determine Home visits by a field nurse or investigator or
needed assistance, and help the claimant develop an accompanied doctor visits
appropriate treatment plan with the physician.
Assess the claim's validity. Home visits and interviews with neighbors or others who
have knowledge of the claimant's activities
----------------------------------------------------------------------------------------------------------------
Table 3: Tools and Methods Used to Provide Vocational
Assessment and Assistance
----------------------------------------------------------------------------------------------------------------
Task Tools and methods
----------------------------------------------------------------------------------------------------------------
Identify transferable skills, validate restrictions on Test basic skills, such as reading or math.
and capabilities for performing an occupation, and Determine interests and aptitudes.
identify other suitable occupations and retraining Evaluate functional capacities associated with
programs. an occupation, such as lifting, walking, and following
directions.
Compare functional capacities, work history,
education, and skills with the demands of an
occupation.
Enhance work capabilities and help develop job-seeking Provide resume preparation, development of job-
skills. seeking skills, and help with job placement.
Assist in obtaining physical, occupational, or
speech therapy and access to employee assistance,
support groups, or state agency vocational
rehabilitation or other community services.
Identify and fund on-the-job training or other
educational courses.
Assess ability to perform own or any occupation, assess Observe and analyze the essential duties of
potential for accommodation, and determine whether the claimant's own occupation, another occupation for
sufficient salary is offered locally or nationally for the same employer, or an occupation of a prospective
a suitable occupation. employer.
Determine the general availability and salary
range of specified occupations.
Identify for a specified occupation the
potential employers and related job descriptions,
salary range, and openings.
Reaccustom claimant to a full work schedule and enable Provide work opportunities for the claimant to
claimant to overcome impairment and return to work. gradually resume his or her job duties.
Procure devices to assist with work or
otherwise help to modify the job.
----------------------------------------------------------------------------------------------------------------
Other Countries Also Provide Return-to-Work Assistance Early
After Disability Onset and Throughout the Assessment Process
The countries we studied also begin assessing return-to-
work needs soon after the onset of a disabling condition and
integrate return-to-work assistance that is tailored to meet
individual needs throughout the assessment process. These
countries also provide short-term benefits on the basis of a
person's inability to perform his or her current job because of
illness or injury. These short-term disability benefits--which
may be granted for a year or more--are similar to the private
insurers' provision of benefits during the 2-year ``own
occupation'' period of disability in that they provide a
transitional period for assessing an individual's work
potential and providing treatment and rehabilitation.
For example, German laws and policies require that all
applicants for disability benefits be evaluated for
rehabilitation and return to work. Based on the principle that
intervention should occur at the earliest possible stage of
disability to minimize the degree and effect of the impairment,
intervention in Germany often begins when the health insurance
agency urges a disabled worker receiving short-term benefits to
apply for medical rehabilitation. In addition, vocational
counselors often discuss rehabilitation and return-to-work
plans with disabled workers while they are still in the
hospital. The social insurance office then evaluates the
person's capacity to work and, if necessary, refers the
applicant to vocational rehabilitation or other types of
return-to-work services and assistance. These return-to-work
measures may include assistance in retaining or obtaining a job
or in selecting an occupation. They may also involve providing
basic training or retraining to prepare for an occupation and
developing workplace accommodations. As long as the person
continues to receive short-term disability benefits, the social
insurance office will monitor the case and periodically
reassess the person's work capacity and need for return-to-work
assistance. The office will award long-term disability benefits
only after it determines that a person's earning capacity
cannot be restored through return-to-work interventions.
Under Swedish laws and policies, both the private and
public sectors are responsible for the early identification of
candidates for rehabilitation and return to work. After an
employee has been on sick leave for 4 weeks, employers are
responsible for determining whether the employee needs some
type of rehabilitation and are required to report this
information to the social insurance office. Social insurance
offices closely monitor the use of short-term benefits and
intervene when employers disregard their early intervention
responsibilities.\13\ The social insurance office then begins
the process of determining whether the person will need
vocational rehabilitation to return to work. The office
arranges for an assessment of the disabled employee's
rehabilitation needs and works with the employer and employee
to develop a rehabilitation plan. Rehabilitation in Sweden is
not meant to be a lengthy process, but rather a short,
intensive period of medical and vocational training to help the
individual return to work as soon as possible. As in Germany,
the social insurance offices in Sweden periodically monitor and
reassess the rehabilitation needs of individuals receiving
short-term disability benefits and, after the first year of
benefits, consider granting long-term benefits if the person's
rehabilitation potential has not improved.
---------------------------------------------------------------------------
\13\ Social insurance offices in Sweden have no mechanisms or
sanctions to force employers to comply with their rehabilitation
responsibilities. We reported in 1996 that, according to social
insurance office surveys, employers do not arrange for rehabilitation
examinations in about 40 to 50 percent of the cases.
---------------------------------------------------------------------------
In The Netherlands, the employer has had increasing
responsibility for efforts to return the employee to his or her
current job or a comparable job within the company since the
mid-1990s. This shift of responsibility from the public to the
private sector is intended to encourage greater responsibility
on the part of employers in the prevention and prompt
amelioration of employee health impairments. Under this policy,
within about 3 months of the onset of the disability, the
employer must submit to the social insurance agency a
preliminary plan to return the disabled worker to the
workforce. A final plan must be submitted within about 9
months. If the employer determines that the disabled worker
cannot return to the workplace, or if the disabled worker has
not returned to work after 1 year of receiving short-term
benefits, the social insurance agency assesses the person's
condition to determine eligibility for long-term disability
benefits. The assessment involves evaluations of the
applicant's physical and mental capabilities, which are then
matched against different occupations to determine whether the
person is capable of performing any work.
SSA Does Not Incorporate Return-to-Work Efforts Into Its
Eligibility Assessment Process
Unlike the private sector and foreign countries, SSA does
not integrate efforts to return individuals to work into either
its initial or continuing eligibility assessment process. To be
considered initially eligible for DI benefits, applicants must
meet the Social Security Act's definition of disability--an
``all-or-nothing'' definition that characterizes individuals as
either unable to work or having the capacity to work.\14\
Because the result of the decision is either full award or
denial of cash benefits, applicants have a strong incentive to
emphasize their limitations to establish their inability to
work and a disincentive to demonstrate any capacity to work.
The act's definition of disability--under which a person is
unable to do any substantial work in the national economy--is
comparable to the private sector's most restrictive definition.
---------------------------------------------------------------------------
\14\ There are also distinct differences between the methods used
by SSA and the private insurers to determine a level of earnings beyond
which an individual no longer qualifies for benefits. SSA regulations,
on one hand, apply a standard level of countable monthly income for all
people other than the blind (currently $700), regardless of
predisability earnings. In contrast, the private insurers we studied
establish an individualized level that is a proportion of each person's
predisability earnings. For disabled beneficiaries with high
predisability earnings, the private sector's individualized level
represents a much greater incentive to work than does SSA's standard
level. However, the private sector's individualized level may provide
less of a barrier to qualify for benefits and thus may encourage more
people to apply for disability benefits.
---------------------------------------------------------------------------
In recent years, SSA has piloted numerous initiatives to
redesign and thereby improve its disability determination
process. But while an internal SSA evaluation recently
recommended that the agency ``create an awareness and
attitudinal change to accept employment support as a core SSA
mission,'' the agency has not yet integrated return-to-work
considerations into its efforts to redesign its disability
determination process.\15\ Moreover, the recently enacted
Ticket to Work Act was intended to increase beneficiary access
to vocational services but does not change the point in the
process at which beneficiaries may receive assistance. Only
those individuals who have met the Social Security Act's
definition of disability and are approved for DI benefits will,
under the Ticket to Work Act, receive a ticket entitling them
to receive return-to-work services. There can be a long delay
in receiving services: SSA's eligibility determination process
ranges up to 18 months or longer for individuals who are
initially denied benefits and who then appeal. Since many
applicants have been unemployed before applying and remain
unemployed during the eligibility determination process, it is
likely that their skills, work habits, and motivation to work
deteriorate during this wait, thus decreasing their readiness
to work\16\ However, the Ticket to Work Act authorizes SSA to
carry out a demonstration project to test the advantages and
disadvantages of earlier referral of applicants and
beneficiaries for rehabilitation.\17\ SSA may also gain
additional insights into early intervention approaches through
its funding of demonstration projects in 12 states.\18\
---------------------------------------------------------------------------
\15\ Social Security Administration, Employment Support Concept
Development Plan, Apr. 12, 1999.
\16\ See GAO/HEHS-96-62, Apr. 24, 1996.
\17\ SSA has not yet designed such a project, and it is unclear how
early SSA will be intervening after onset of disability in this
demonstration.
\18\ For example, one state is testing the provision of short-term
vocational services to DI applicants with recent work histories, with
an emphasis on early intervention and quick employment.
Other Systems Provide Incentives for Claimants and Employers to
---------------------------------------------------------------------------
Encourage and Facilitate Return to Work
To facilitate return to work, all of the insurers and the
countries we studied employ incentives both for claimants to
participate in vocational activities and receive appropriate
medical treatment, and for employers to accommodate claimants.
For claimants who could benefit from vocational rehabilitation,
insurers and the countries we studied require participation in
an individualized return-to-work program. They also provide
financial incentives to promote claimants' efforts to become
rehabilitated and return to work. To better ensure that medical
needs are met, the insurers and the countries we studied
require that claimants receive appropriate medical treatment
and assist them in receiving this treatment. In addition, they
provide financial incentives to employers to encourage them to
provide work opportunities for claimants. Although these
practices are common to the private sector insurers and the
countries we examined, limited data exist to determine whether
these incentives for claimants and employers yield positive
outcomes. In contrast to the practices of other systems, the
Ticket to Work Act makes participating in rehabilitation and
return-to-work services voluntary for DI beneficiaries. In
addition, under law and SSA regulations, receiving appropriate
medical treatment is not a prerequisite for award or continuing
receipt of DI benefits. Moreover, DI applicants and
beneficiaries may not have access to appropriate medical care.
Private Insurers Offer Incentives to Claimants and Employers to
Promote Return to Work
All the private insurers we reviewed require claimants who
could benefit from vocational rehabilitation to participate in
a customized program or risk loss of benefits. As part of this
program, the return-to-work plan for each claimant can include,
for example, adaptive equipment, modifications to the work
site, or other accommodations. All the private insurers mandate
the participation of claimants whom they believe could benefit
from rehabilitation, because they believe that voluntary
compliance has not encouraged sufficient claimant participation
in these plans.\19\
---------------------------------------------------------------------------
\19\ Although claimants may be involved in the development of the
individualized rehabilitation plans, the insurers make the final
decision as to the types of rehabilitation services claimants will
receive.
---------------------------------------------------------------------------
These insurers also make special financial incentives
available to claimants who participate in rehabilitation
programs, as appropriate. All insurers may defray costs
associated with rehabilitation, such as child care expenses.
For example, one insurer may pay $250 a month per child, up to
$1,000 per month. This insurer also increases claimants'
benefit payments by 10 percent, up to a maximum of $1,000 a
month, for those who participate in rehabilitation.
In addition, all of the insurers told us that they
encourage rehabilitation and return to work by allowing
claimants who work to supplement their disability benefit
payments with earned income.\20\ During the first 12 or 24
months of receiving benefits, depending upon the particular
insurer, claimants who are able to work can do so to supplement
their benefit payment and thereby receive total income of up to
100 percent of predisability earnings.\21\ After this period,
if the claimant is still working, the insurers decrease the
benefit amount so that the total income a claimant is allowed
to retain is less than 100 percent of predisability income.
---------------------------------------------------------------------------
\20\ The private disability insurers we reviewed told us that their
benefits generally replace 60 percent of predisability earnings,
depending upon the insurer.
\21\ To illustrate, assume that Ms. Jones is a claimant with
predisability earnings of $1,000 per month and an insurance policy that
replaces 60 percent of her predisability earnings. She is currently not
working. Under this scenario, her income would be limited to $600 per
month in disability benefits. However, if she returned to work, even
part-time, she would have the opportunity to increase her total income
to 100 percent of her predisability earnings or, in this instance,
$1,000. If she returned to work and earned $500 per month, the insurer
would reduce her benefit payment from $600 to $500 per month, so that
her combined earnings and benefit payment would provide a total monthly
income equal to her predisability income of $1,000.
---------------------------------------------------------------------------
However, when a private insurer determines that a claimant
is able, but unwilling, to work, the insurer can reduce or
terminate the claimant's benefits. Moreover, to encourage
claimants to work to the extent they can, even if only part-
time, two of the insurers may reduce a claimant's benefit by
the amount the claimant would have earned if he or she had
worked to maximum capacity. One insurer uses the claimant's
physician or three independent experts qualified to evaluate
the claimant's condition to determine a claimant's maximum
capacity to work. One of the insurers may also reduce a
claimant's monthly benefit during the first year by the amount
that the claimant could have earned if he or she had not
refused a reasonable job offer--that is, a job that was
consistent with the claimant's background, education, and
training. Claimants' benefits may also be terminated if
claimants refuse to accept a reasonable accommodation that
would allow them to work. For example, if a claimant with
impaired vision refuses the offer of a large-screen terminal
that would allow the claimant to work, the insurer can
terminate his or her benefits.
Since medical improvement or recovery can also enhance
claimants' ability to work, the private insurers we studied not
only require, but also help, claimants to obtain appropriate
medical treatment. To maximize medical improvement, private
insurers require that the claimant's physician be qualified to
treat the particular impairment. Additionally, two insurers
require that treatment be provided in conformance with medical
standards for type and frequency. Moreover, to help ensure that
a claimant is receiving appropriate treatment, the insurers'
medical staff work with the treating physician as needed to
ensure that the claimant has an appropriate treatment plan. The
insurers may also provide funding for those who cannot
otherwise afford treatment.
All private sector insurers we studied may also provide
financial incentives to employers to encourage them to provide
work opportunities for claimants. By paying for accommodations
and offering lower insurance premiums to employers, private
insurers encourage employers to become partners in returning
disabled workers to productive employment. For example, to
encourage employers to adopt a disability policy with return-
to-work incentives, all the insurers offer employers a
discounted insurance premium that they can continue to receive
if their disability caseload declines to the level expected for
those companies that assist claimants in returning to work. To
this end, these insurers fund accommodations, as needed, for
disabled workers at the employer's work site.\22\
---------------------------------------------------------------------------
\22\ Educating employers about the size and extent of disability
costs is an important element in motivating the employer to promote
efforts to return claimants to work. For example, private insurers
educate employers about the direct and indirect costs of not
controlling lost time associated with disability, which was estimated
by one insurer to be 4 to 6 percent of an employer's payroll.
Other Countries Also Provide Incentives to Claimants and
---------------------------------------------------------------------------
Employers to Encourage Return to Work
Germany and Sweden also require participation in
rehabilitation. Individuals there may be denied benefits for
not participating in rehabilitation when it is recommended by
the social insurance offices. Both these countries, as well as
The Netherlands, also provide financial incentives to encourage
participation in rehabilitation. For example, they provide
supplementary benefits to cover rehabilitation-related
expenses, such as transportation and housing costs and the cost
of educational courses, books, and study aids.\23\ Germany and
Sweden also offer transitional work opportunities that enable
people with disabilities to return to work part-time while
earning disability benefits. These individuals can gradually
increase their daily work hours, and thus their earnings, until
they reach their maximum work capacity, with a corresponding
decrease in benefits.\24\ Similarly, The Netherlands provides a
supplemental wage to beneficiaries who work, allowing them to
earn a wage equal to their predisability earnings. The
countries we studied also provide appropriate medical treatment
and rehabilitation services to disabled individuals, and social
insurance offices in Germany and Sweden may terminate the
disability benefits of individuals who refuse to follow such
medical recommendations.
---------------------------------------------------------------------------
\23\ Germany and Sweden also promote disabled workers' efforts to
return to work by providing them with financial assistance to purchase
technical aids; workplace adaptations; and other work-related needs,
such as personal assistants or payment of transportation costs.
Additionally, Sweden provides grants to subsidize the purchase or
modification of a vehicle if it is considered necessary for vocational
training or for traveling to work.
\24\ In Sweden, individuals with reduced work capacity may work
full-time and still take part in the transitional work program.
---------------------------------------------------------------------------
In addition, Germany, Sweden, and The Netherlands provide
financial assistance to employers for the purchase of workplace
accommodations needed by disabled employees. For example, such
assistance may pay for technical aids, special staff or
personal assistants to help a disabled worker perform various
work functions, or adaptations of the work environment to meet
the special needs of a disabled worker. These countries also
offer financial incentives for the employment of disabled
individuals by subsidizing the wages that employers pay them.
Wage subsidies are provided for a time-limited period of 3 to 4
years, with the amount of the subsidy declining each year.\25\
Furthermore, in The Netherlands, employers have an additional
incentive to assist employees in returning to work because the
employers' contributions to the disability insurance fund are
partially determined by the number of their employees who
became disabled in the prior year.
---------------------------------------------------------------------------
\25\ In Sweden, wage subsidies may be maintained at the same level
and extended beyond the 4-year period if authorities determine it is
appropriate.
SSA's Return-to-Work Incentives Are More Limited Than Those
---------------------------------------------------------------------------
Used in Other Systems
In contrast to the private sector and the countries we
studied, SSA's disability programs do not require
rehabilitation for beneficiaries, regardless of their capacity
to work. Instead, the recently enacted Ticket to Work Act
establishes a voluntary system that depends upon the
beneficiary's motivation to pursue rehabilitation services.
Thus, a beneficiary who could benefit from rehabilitation might
not choose to seek such services. Further, in contrast to the
private sector requirement that an individual work to his or
her maximum capacity, the Social Security Act does not have
such a requirement, which may act as a disincentive to work. In
particular, beneficiaries with low earnings may find it more
financially advantageous to periodically stop working, or work
part-time and continue to receive disability payments, than to
earn more than SSA's limit of $700 a month in countable income
and lose all cash benefits after completing a trial work
period. In recognition of the potential work disincentive from
this all-or-nothing benefit structure, the Ticket To Work Act
requires SSA to conduct demonstration projects under which
benefits are reduced by $1 for each $2 of a beneficiary's
earnings above a level determined by SSA.
SSA also differs from the private sector and the countries
we studied in requiring medical treatment. The Social Security
Act, along with SSA regulations, requires that benefits be
denied when an individual fails, without good cause, to follow
treatment prescribed by his or her physician.\26\ However, if
an applicant is not receiving treatment, SSA still assesses the
applicant's eligibility for benefits and--if the applicant
qualifies--awards benefits, even if the applicant would not
qualify for benefits if treated. And unless medical treatment
is prescribed, it is not a prerequisite for continued receipt
of benefits once they have been awarded. Indeed, SSA found in
1999 that some beneficiaries with affective disorders--who
constitute one of the fastest-growing groups on the DI rolls--
were receiving no medical treatment. However, SSA has recently
begun a demonstration project to determine whether providing
access to the right medical treatment for beneficiaries with
affective disorders will enable them to return to work.\27\
Nevertheless, access to medical treatment may be limited for
many DI applicants and beneficiaries.\28\
---------------------------------------------------------------------------
\26\ For benefits to be denied, treatment must be prescribed by the
individual's treating physician (the licensed physician who attends to
an individual's medical needs). When an individual has no attending
physician, the treating physician is the hospital or clinic where the
individual goes for medical care.
\27\ In addition, many beneficiaries with affective disorders were
not being treated by mental health professionals. Yet, research
suggests that as many as 60 percent of affective disorder cases can be
controlled with appropriate treatment, and SSA believes that providing
appropriate medical treatment to beneficiaries with affective disorders
could help them return to work. Outside of the ongoing demonstration
project, SSA does not routinely intervene in the delivery of medical
services for its beneficiaries.
\28\ DI applicants may not be covered by health insurance. In
addition, new DI beneficiaries have a 24-month waiting period before
Medicare eligibility. Moreover, Medicare generally does not cover the
costs of certain treatment--such as prescription drugs--that may be
necessary to improve functioning for a return to work.
---------------------------------------------------------------------------
In contrast to the private sector and The Netherlands, SSA
does not have the legal authority to use financial incentives
to encourage employers to assist those with disabilities to
return to work, thus limiting the agency's ability to influence
employers. SSA, however, is currently funding demonstration
projects in 12 states to develop ways to increase employment of
DI beneficiaries and other people with disabilities and is
looking to employers for help. For example, a goal of one state
project is to solicit employer views on barriers to hiring DI
beneficiaries and identify strategies for, and educate
employers about, increasing employment opportunities for DI
beneficiaries. In addition, the federal government provides tax
incentives, and states may provide other assistance to
employers to encourage them to return people with disabilities
to work.\29\
---------------------------------------------------------------------------
\29\ For example, small businesses may take an annual tax credit
for a variety of costs incurred in providing employee accommodations,
such as readers, sign language interpreters, and adaptive equipment
Also, all businesses may take an annual deduction for the expense of
removing physical, structural, and transportation barriers to disabled
workers Further, state vocational rehabilitation agencies can provide
various services to employers, such as rehabilitation engineering
services for architectural barrier removal and work site modifications.
---------------------------------------------------------------------------
Other Systems Strive to use Appropriate Staff to Achieve
Accurate Disability Decisions and Successful Return-to-Work
Outcomes
Officials of each of the disability insurers and countries
that we studied told us that they have developed techniques for
using the right staff to assess eligibility for benefits and
return those who can to work. Both the insurers and the
countries have access to individuals with a range of skills and
expertise. Moreover, officials told us that they selectively
apply this expertise as appropriate to cost-effectively assess
and enhance claimants' capacity to work. In contrast, SSA's DDS
teams of medical and psychological consultants and disability
examiners are hired and trained to assess eligibility of
applicants to receive cash benefits rather than to enhance
claimants' capacity to work. As a result, the staff of SSA and
the DDSs do not have the expertise to carry out the role of
returning disabled workers to productive employment.
Private Insurers Seek to Use Appropriate Staff to Assess
Eligibility and Provide Return-to-Work Services
Each of the private disability insurers that we studied has
access to multidisciplinary staff with a wide variety of skills
and experience who can assess claimants' eligibility for
benefits and provide needed return-to-work services to enhance
the work capacity of claimants with severe impairments. The
private insurers' core staff generally include claims managers,
medical experts, vocational rehabilitation experts, and team
supervisors.\30\ The insurers explained that they set hiring
standards to ensure that these multidisciplinary staff are
highly qualified. Such qualifications are particularly
important because assessments of benefit eligibility and work
capacity can involve a significant amount of professional
judgment when, for example, a disability cannot be objectively
verified on the basis of medical tests or procedures or
clinical examinations alone.\31\ Table 4 describes the
responsibilities of this core staff of experts employed by
private disability insurers, as well as its general
qualifications and training.
---------------------------------------------------------------------------
\30\ The insurers also employ disability income specialists to
assist claimants in applying for DI benefits.
\31\ According to one insurer, disabilities with subjective
diagnoses include certain types of mental illness, fibromyalgia,
chronic pain (often back pain), and chronic fatigue syndrome.
Table 4: Responsibilities and Qualifications of Staff Employed
by Disability Insurers to Assess and Enhance a Claimant's Work
---------------------------------------------------------------------------
Potential
----------------------------------------------------------------------------------------------------------------
Type of staff Responsibilities Qualifications and training
----------------------------------------------------------------------------------------------------------------
Claims managers Determine disability benefit One insurer gives preference to those
eligibility. with a college degree and requires
Develop, implement, and monitor insurance claims experience and
an individualized claim management specialized training and education.
strategy. Another requires a college degree, a
Serve as primary contact for the passing grade on an insurer-sponsored
claimant and the claimant's employer. test, and specialized training and
Focus on facilitating the coaching.
claimant's timely, safe return to work.
Coordinate the use of expert
resources.
Medical and related Collect and evaluate medical and Medical staff include registered nurses
experts a functional information about the claimant with case management or disability-
to assist in the eligibility assessment related experience and experts in
and help to ensure that claimants receive behavioral and mental issues, such as
the appropriate medical care to enable psychologists, experienced psychiatric
them to return to work. nurses, and licensed social workers. Two
At one insurer, physicians also insurers also employ board-certified
help train company staff. physicians in various specialties.b
Vocational rehabilitation Help assess the claimant's Rehabilitation experts are masters-level
experts ability to work. vocational rehabilitation counselors. In
Help overcome work limitations by addition, one insurer requires board-
identifying needed assistance, such as certification and 5 years of experience.
assistive devices and additional training,
and ensuring that it is provided.
Supervisors Provide oversight, mentoring, and One insurer gives preference to those
training. with a college degree and requires 3
years' disability experience, some
management experience, and specialized
training. Another insurer require's a
college degree, more than 12 years'
disability claims experience, and
completion of courses leading to a
professional designation.
----------------------------------------------------------------------------------------------------------------
a In one company, the medical expert is an employee of a company subsidiary but is often colocated with the
insurers' employees.
b One company, for example, employs 85 part-and full-time physicians, including psychiatrists, doctors of
internal medicine, orthopedists, family practice physicians, cardiologists, doctors of occupational medicine,
and neurologists.
The disability insurers we reviewed use various strategies
for organizing their staff to focus on return to work, with
teams organized to manage claims associated either with a
specific impairment type or with a specific employer (that is,
the group disability insurance policyholder). One insurer
organizes its staff by the claimant's impairment type--for
example, cardiac/respiratory, orthopedic, or general medical--
to develop in-depth staff expertise in the medical treatments
and accommodations targeted at overcoming the work limitations
associated with a particular impairment. The other two insurers
organize their staff by the claimant's employer, because they
believe that this enables them to better assess a claimant's
job-specific work limitations and pursue workplace
accommodations, including alternative job arrangements, to
eliminate these limit ations.\32\ Regardless of the overall
type of staff organization, each of the insurers facilitates
the interaction of its core staff--claims managers, medical
experts, and vocational experts--by pulling these experts
together into small, multidisciplinary teams responsible for
managing claims. Additionally, one insurer engenders team
interaction by physically colocating core team members in a
single working area.
---------------------------------------------------------------------------
\32\ All three insurers, however, have behavioral care specialists
specifically for managing psychiatric claims.
---------------------------------------------------------------------------
The disability insurers expand their core staff through
agreements or contracts with subsidiaries or other companies to
provide a wide array of needed experts. These experts--deployed
both at the insurer's work site and in the field--provide
specialized services to support the eligibility assessment
process and to help return claimants to work. For instance,
each insurer we studied contracts with medical experts beyond
its core employee staff--such as physicians, psychologists,
psychiatrists, nurses, and physical therapists--to help test
and evaluate the claimant's medical condition and level of
functioning. In addition, the insurers contract with vocational
rehabilitation counselors and service providers for various
vocational services, such as training, employment services, and
vocational testing.\33\
---------------------------------------------------------------------------
\33\ Two insurers also contract with investigators and surveillance
personnel to investigate potential inconsistencies between the
claimant's statements and actual activities. One company employs field-
based investigators who verify claimant information and assess the
conformance of the claim to observed claimant activities. These
investigators usually have prior investigative experience and receive
ongoing training on current medical issues and other professional
education.
---------------------------------------------------------------------------
All of the private insurers we examined told us that they
strive to apply the appropriate type and intensity of staff
resources to cost-effectively return to work claimants with
work capacity. The insurers described various techniques that
they use to route claims to the appropriate claims management
staff, which include separating (or ``triaging'') claimants
with work potential and directing their claims to staff with
the appropriate expertise. According to one insurer, the
critical factor in increasing return-to-work rates and, at the
same time, reducing overall disability costs is proper triaging
of claims. In general, the private insurers separate claims by
those who are likely to return to work and those who are not
expected to return to work. The insurers told us that they
assign the type and intensity of staff necessary to manage
claims of people who are likely to return to work on the basis
of the particular needs and complexity of the specific case.
This selective staff assignment is shown in Table 5.
Table 5: Triage of Claims and Illustrations of Selective Staff
Assignment for Claims Management
----------------------------------------------------------------------------------------------------------------
Triage category Staff assigned Types of return-to-work services provided
----------------------------------------------------------------------------------------------------------------
Likely to return to work
Condition requires Medical specialist Recommend improvements in
medical assistance and treatment plan to treating physician.
more than 1 year to Refer claimant for more
stabilize medically. specialized or appropriate medical
services.
Ensure frequency of treatment
meets standards for condition.
Condition requires Claims manager Monitor medical condition.
less than a year to Maintain contact with employer and
stabilize. physician to ensure return to work.
Obtain input from medical and
vocational specialists as needed.
Condition is Multidisciplinary team including Evaluate claimant's functional abilities
stabilized and claimant Vocational expert for work.
needs rehabilitation or Medical expert Customize return-to-work plan.
job accommodation to Claims specialist Arrange for needed return-to-work
return to work. Specialists as needed services.
Monitor progress against expected
return-to-work date.
Unlikely to return to work
Claimant is Claims manager Review medical condition and level
determined unable to of functioning regularly.
return to work.
----------------------------------------------------------------------------------------------------------------
As shown in Table 5, claimants expected to need medical
assistance, such as those requiring more than a year for
medical stabilization, are likely to receive an intensive
medical claims management strategy. A medical strategy
involves, for example, ensuring that the claimant receives
appropriate medical treatment. Claimants who need less than a
year to stabilize medically are managed much less intensively.
For these claims, a claims manager primarily monitors the
claimant's medical condition to assess whether the claimant has
stabilized sufficiently medically to begin vocational
rehabilitation, if appropriate. Alternatively, claimants with a
more stable, albeit serious, medical condition who are expected
to need vocational rehabilitation, job accommodations, or both
to return to work might warrant an intensive vocational
strategy. The private disability insurers generally apply their
most resource-intensive, and therefore most expensive,
multidisciplinary team approach to these claimants. Working
closely with the employer and the attending physician, the team
actively pursues return-to-work opportunities for claimants
with work potential.
Finally, claimants who are likely not to return to work (or
``stable and mature'' claims) are generally managed using a
minimum level of resources, with a single claims manager
responsible for regularly reviewing a claimant's medical
condition and level of functioning.\34\ The managers of these
claims carry much larger caseloads than managers of claims that
receive an intensive vocational strategy. For example, one
insurer's average claims manager's caseload for these stable
and mature claims is about 2,200 claims, compared with an
average caseload of 80 claims in the same company for claims
managed more actively.
---------------------------------------------------------------------------
\34\ One of the insurers reviewed cases of claimants who were not
expected to recover medically and to remain work-disabled for the
duration of the policy every 12 to 36 months.
---------------------------------------------------------------------------
Regardless of the category into which a claim is placed,
the claims manager is responsible for identifying the
appropriate experts and involving them in the management of the
claim as an essential element of developing and implementing a
customized claims management strategy. The claims manager may
informally use the assistance of experts or hold an
interdisciplinary team meeting, including clinical and
rehabilitation experts, to obtain advice on developing the
claims management strategy and help in determining which
specialized experts need to be deployed to manage the claim.
Further, if the claims manager refers the claim to a
specialist, that specialist may determine that additional
expertise is required as well. But the insurers told us that
they escalate a claim to staff with progressively more training
and specialization, and thus higher cost, only if needed to
resolve increasingly complex claims management issues. To
ensure that staff are utilized cost-effectively, the private
insurers said that they compute the return-on-investment
accruing from investing in return-to-work resources for a
particular claimant.
Other Countries Also Selectively Apply Specialized Staff to
Return Claimants to Work
Other countries' social insurance offices also call upon
various specialists, such as physicians, vocational experts,
and psychologists, in the process of evaluating and enhancing a
person's ability to work. If the needed expertise is
unavailable in-house, the social insurance agency may purchase
the necessary services from other organizations. The expertise
applied is decided on a case-by-case basis depending on the
case's complexity. For example, the social insurance offices in
Sweden are responsible for working with the regional and local
employment and rehabilitation offices to determine the
appropriate types of rehabilitation services for a claimant.
Medical assessments of work capacity in Germany and The
Netherlands may also be supplemented by advice from vocational
or other experts.
Social insurance offices in Germany and Sweden select the
appropriate staffing and services to dedicate to particular
cases on the basis of the likelihood of a successful outcome.
The staff assignments made and the return-to-work actions taken
by the social insurance offices depend on an assessment of each
applicant's potential for returning to work. In complex cases
of potential long-term disability, more extensive evaluations
involving psychologists and vocational specialists may be
conducted to assess the work capacity of an applicant. In
Germany, medical rehabilitation is provided before an
applicant's condition is assessed to determine whether
vocational rehabilitation is necessary. Only if successful
rehabilitation seems unlikely, or if rehabilitation has been
provided without success, will the social insurance offices in
Germany and Sweden typically grant the person long-term
disability benefits. But, in contrast with the private insurers
we examined, once an individual is granted long-term benefits
and therefore considered too severely disabled to benefit from
services, the social insurance offices rarely reassess the
person's return-to-work potential and generally do not offer
any return-to-work services or benefits.
The Netherlands also dedicates resources to evaluating
return-to-work potential and providing rehabilitation services
on the basis of the particular return-to-work potential and
needs of individuals. But unlike Germany and Sweden, The
Netherlands offers vocational rehabilitation to disability
beneficiaries who choose to pursue a work goal even after they
are granted long-term benefits.
SSA Staff Are Not Focused on Returning Claimants to Work
In contrast to the private insurers and the foreign social
insurance offices, the focus of DDS staff who make
determinations for SSA is to assess the eligibility of
applicants to receive cash benefits. The DDSs do not assess
what is needed for an individual to return to work or help an
individual with work capacity to return to work. Neither do
they ensure that DI applicants or beneficiaries receive medical
treatment. To make initial benefit eligibility determinations,
DDSs rely on teams comprising a disability examiner and a
medical or psychological consultant. Since the DDS teams do not
carry out the variety of roles related to return to work, they
do not include staff with the vocational skills and expertise
who are incorporated in teams used by the private and foreign
disability systems. However, under the Ticket to Work Act,
beneficiaries who voluntarily choose to attempt a return to
work may tap into vocational expertise outside SSA that could
provide the additional services, expertise, and supports to
help them in their effort, but only after benefit award.
Moreover, while SSA funds the state DDSs, SSA's regulations
delegate authority to each DDS to set hiring policies and
determine how to organize staff charged with carrying out the
eligibility assessment function. Consequently, in contrast to
the standardized hiring practices used by the private insurers,
considerable variation can exist among the states in the
requisite qualifications for hiring key staff. For example,
among the DDSs, the required educational background for
disability examiners ranges from a high school diploma to some
college to a college degree.
In addition, SSA separates beneficiaries into groups
according to their likelihood of medical improvement for the
purpose of assessing continuing eligibility for benefits, in
accordance with law and regulation. The agency invests greater
staff resources in reviewing beneficiaries who are most likely
to medically improve than in reviewing those with less
likelihood of improvement. In contrast to practices of the
private insurers and foreign social insurance offices, SSA uses
its resources to determine continuing eligibility on the basis
of medical improvement and does not separately evaluate whether
a beneficiary has the potential to return to work \35\
---------------------------------------------------------------------------
\35\ The law contains several exceptions that allow benefits to be
terminated even when a person's medical condition has not improved. For
example, benefits may be disallowed when new or improved diagnostic
techniques reveal that the impairment is less disabling than originally
determined.
---------------------------------------------------------------------------
Concluding Observations
Return-to-work practices used in the U.S. private sector
and in other countries reflect the understanding that people
with disabilities can and do return to work. In 1996, we
recommended that SSA place greater priority on helping disabled
beneficiaries return to work. We also recommended that the
agency develop a comprehensive strategy for this effort. While
SSA has begun to focus more on return to work, it has yet to
adopt a comprehensive strategy for implementing this new
approach. For example, it has yet to integrate its return-to-
work efforts with its initiatives to improve the disability
decision-making process. In short, we continue to believe SSA
is still not placing enough priority on identifying and
enhancing the work potential of its beneficiaries with
disabilities. We also continue to believe that SSA could do
this more effectively without jeopardizing the availability of
benefits for people who cannot work.
We acknowledge that limited data exist on the cost-
effectiveness of the return-to-work approaches used in the
other systems we examined. In addition, SSA may face greater
difficulty in returning some of its beneficiaries to work than
private sector insurers do, since DI covers a broader
population than the private insurers. Moreover, significant
differences exist between SSA's disability programs and those
of private sector disability insurers and social insurance
programs in other countries. Some of these differences can be
attributed to the particular laws and regulations governing the
programs. Although SSA would face substantial constraints and
challenges in applying the return-to-work practices of other
programs, we believe opportunities exist for providing the
return-to-work assistance that could enable more of SSA's
beneficiaries to reduce or eliminate their dependence on cash
benefits.
The Congress recognized the need to focus more on return to
work when it passed the Ticket to Work Act, which authorizes
and requires SSA to conduct return-to-work demonstration
programs. Program managers and policymakers will be able to
learn from the experiences of these demonstrations, and they
can also draw upon the approaches of the other systems to
further strengthen and enhance a comprehensive return-to-work
focus. Adopting such a focus will, however, require fundamental
changes to the underlying philosophy and direction of the
disability programs, including the determination of disability.
Policymakers will need to carefully weigh the implications of
such changes, but compelling reasons exist to try new
approaches. Current estimates project that the DI trust fund
will become insolvent in 2023. This financial strain, along
with advances in technology and medicine that can help
individuals improve their productive potential, provides ample
reason for examining how practices from other systems could be
applied to improve SSA's return-to-work outcomes.
Mr. Chairman, this concludes my prepared statement. I would
be pleased to respond to any questions you or Members of the
Subcommittee may have.
GAO Contact and Staff Acknowledgments
For future contacts regarding this testimony, please call
Barbara D. Bovbjerg at (202) 512-7215. Carol Dawn Petersen,
Barbara H. Bordelon, Kelsey M. Bright, Julie M. DeVault,
William E. Hutchinson, and Mark Trapani also made key
contributions to this testimony.
Related GAO Products
Social Security Disability Insurance: Raising the
Substantial Gainful Activity Level for the Blind (GAO/T-HEHS-
00-82, Mar. 23, 2000).
Social Security Disability: Multiple Factors Affect Return
to Work (GAO/T-HEHS-99-82, Mar. 11, 1999).
Social Security Disability Insurance: Factors Affecting
Beneficiaries' Return to Work (GAO/T-HEHS-98-230, July 29,
1998).
Social Security Disability Insurance: Multiple Factors
Affect Beneficiaries' Ability to Return to Work (GAO/HEHS-98-
39, Jan. 12, 1998).
Social Security Disability: Improving Return-to-Work
Outcomes Important, but Trade-Offs and Challenges Exist (GAO/T-
HEHS-97-186, July 23, 1997).
Social Security: Disability Programs Lag in Promoting
Return to Work (GAO/HEHS-97-46, Mar. 17, 1997).
1SSA Disability: Return-to-Work Strategies From Other
Systems May Improve Federal Programs (GAO/HEHS-96-133, July 11,
1996).
Social Security: Disability Programs Lag in Promoting
Return to Work (GAO/T-HEHS-96-147, June 5, 1996).
SSA Disability: Program Redesign Necessary to Encourage
Return to Work (GAO/HEHS-96-62, Apr. 24, 1996).
Chairman Shaw. Thank you, Ms. Bovbjerg. Ms. Petersen, do
you have something to add to the remarks?
Ms. Petersen. No, I do not.
Chairman Shaw. Mr. Matsui.
Mr. Matsui. Thank you, Mr. Chairman. Thank you very much,
Barbara, for your testimony. You indicated in your actual
written report that it is difficult to ascertain the cost that
is expended on the various programs that you just mentioned for
the disabled in terms of job retraining programs and obviously
others. Is that part of your conclusion that there is not a lot
of transparency in what the expenditures are in some of the
European and other countries?
Ms. Bovbjerg. Well, we could not get cost information from
the other countries and frankly, were we to get that, it would
be difficult to know how we could translate it into a
projection for SSA if SSA were to do these things. We did get
cost information from private insurers and, as you might
expect, they told us that the cost ranged depending on the
intensity of the intervention. If a claimant was assessed as
being very unlikely to be able to work it cost them $100 a
claim.
On the other end of the spectrum, if they are working with
someone who they think really has a very good shot at going
back to their job, they might spend $2,300 a claim. So there is
a wide variation and it is unclear when you look at it in the
aggregate how this would translate to the Social Security
system because as you have pointed out there are some
differences in client populations.
Mr. Matsui. So for the foreign countries it is just
difficult to get information from them in terms of what the
actual overall cost is in terms of comparison with the U.S.,
our Social Security system, unemployment system, and obviously
other aspects of the Federal Government, state government in
terms of cost that goes into it. Then on the private side they
could give you the numbers but because each individual case
differs so much it is hard to make an evaluation as to the
effectiveness of the programs. Is that kind of what you are
concluding or part of the summary?
Ms. Bovbjerg. It was hard to know whether those costs
predict what SSA would experience if they were to do similar
things. I think in terms of effectiveness the private sector
was uniform in saying that these measures they took were not
only effective but they were cost-effective or they wouldn't do
them.
Mr. Matsui. OK, good. Have you in your studies brought
together unemployment insurance, the health policies, you know,
health care coverage, and rehabilitation services, did you use
all those different aspects that are outside of the Social
Security Administration and compare it to the private sector
plus the foreign countries?
Ms. Bovbjerg. Well, when we looked at private sector and
foreign countries, we noticed that they did take quite an
integrated approach--
Mr. Matsui. Right.
Ms. Bovbjerg [continuing]. In their return-to-work
strategy. That they do work with medical providers. In the
private sector they are often working with people who have
health insurance and if they are unable to get access to the
kind of treatment that the insurer thinks they need some,
insurers will help assure that that happens. That would be
harder for the Social Security Administration. We have a
different system. And in other countries it is much more
integrated, with fewer separate agencies.
Mr. Matsui. It is hard to make comparisons. What about the
earlier intervention by some of these other countries as well?
I mean obviously there is Sweden and a few others, they move
very quickly when it comes to the disabled compared to in our
country, is that correct as well?
Ms. Bovbjerg. Private insurers and the other countries all
move quickly. They intervene very early. They assess work
capacity, work potential right away. After that assessment they
then work with the claimants who have potential to try to see
what kinds of support they need and to try to plan an
individualized approach for each of them.
In Social Security the claimant goes through the process,
which may be lengthy as you know, for determining eligibility
and it is only at that point now under the Ticket to Work Act
that they will be offered vocational rehabilitation services,
so it is quite a different approach.
Mr. Matsui. One of the problems that I am having is I think
we need to re-examine all of this. I think it really has to be
done but in a very comprehensive way. And I am afraid--this
Subcommittee can only take so much and then you have labor and
education, you have other Committees that are involved in this
as well.
And somehow we have to find a way to integrate this because
I think the next major step is obviously to provide full
services and quick early services, early intervention, and
obviously universal coverage indefinitely while the need is
there, but, you know, how do we go about that? And the
comparisons are very difficult now because we don't have that
unified approach in this country.
Ms. Bovbjerg. But I think that what we tried to point out
in our statement is that these other systems offer ideas to
draw upon. They are doing these things. They think they are
effective. It becomes up to us in the Federal Government to
think about how do we select the things that are going to work
best for us and create a comprehensive strategy?
Mr. Matsui. Right. And I guess what I want to make sure is
that we get the overall cost comparisons so that we don't
mislead ourselves to think that, well, we can do this with the
same dollars that we have or the same resources that we have
and expect the same results because I don't know if that is
necessarily the case. And your studies cannot give me, and it
is not your fault, but your studies cannot give me any
assurance that we are moving in that direction because you
can't get information from the foreign countries and obviously
the private insurers are a much different situation.
And somehow we need to--and again I am suggesting that the
next step may be to try to get a more comprehensive idea of
what the overall cost is in these other studies that are being
done and compare them to ours and then see how we can
reallocate our resources but also find additional resources
should they become necessary.
Ms. Bovbjerg. And to think about what we need, what fits in
with our policy priorities for disability.
Mr. Matsui. Exactly. Thank you.
Chairman Shaw. Barbara, to follow up on what Mr. Matsui was
talking about, I want to talk about the fragmented services
across many governmental agencies. I assume that other
countries have the same problem and perhaps even in the private
sector. How would you compare that as far as the expeditious
nature of the handling of these to go ahead and process all
these things together so that the disabled get the help that
they need, how can that be rearranged or arranged?
Ms. Bovbjerg. Carol knows a great deal about how some of
these things work in foreign countries.
Ms. Petersen. Well, in the foreign countries, in some
instances, services will be provided within an agency and in
other instances there may be services that they need to draw
upon from another agency. For example, in Sweden you have a
social insurance board that handles everything from sickness
benefits to long-term disability but when it comes to assessing
work capacity, that is done in the labor ministry and in the
agencies that are run under that ministry.
And in that country and similarly in Germany there seems to
be very well-developed interagency coordination and
cooperation. The agencies work very closely with one another.
They are all operating with the same mission and goal to return
people to work--for those that can--and so there are strong
linkages between the agencies. The private sector relies on
contractual agreements with other firms to provide it with
services that it does not provide in-house.
Chairman Shaw. Contrast that with our government services.
Ms. Petersen. I am sorry?
Chairman Shaw. Contrast that with our government delivery
system.
Ms. Petersen. Our Federal agencies could contract for some
of these services as well but I think they would need to put
them together.
Chairman Shaw. Contrast it with existing--with the way we
do it now.
Ms. Petersen. Oh. Again, you would need to examine what
type of new system you would want, what elements you wanted in
place and then see whether the existing agencies provide those
services or could provide those services or whether you would
want to contract some of that with the private sector. This
would have to be part of a comprehensive strategy that would be
developed.
Chairman Shaw. What I would like to see is sort of walk us
through the process that somebody with a disability goes
through when they come in trying to seek some assistance. Maybe
that would be helpful to us.
Ms. Bovbjerg. To seek return to work assistance or to the
application process?
Chairman Shaw. The whole thing, just very, very briefly.
Ms. Bovbjerg. Well, when someone comes to SSA and says that
they are disabled the first thing SSA has to do is determine
whether they are eligible for the program, you know, are they a
citizen, do they have 20 of the last 40 quarters in covered
employment. Once they do that the person's disability claim is
then referred to the state-run Disability Determination
Service, under contract with Social Security and that is where
the claim is evaluated for whether it meets SSA's standards for
disability.
At this point they were looking at what the nature of the
impairment is, does it fit with their medical listings and if
the person has been working. The person cannot be able to earn
above substantial gainful activity. And at various points in
the process maybe Social Security tells them, yes, you are
disabled and they put them on the rolls. At that point under
Ticket to Work, they can be offered vocational rehabilitation
services but at no point is the person evaluated for work
capacity.
We did a report a couple of years ago where we talked to
about 70 DI recipients who had returned to work and we asked
them what were the things that were most important to them, why
could they return to work when maybe other people with similar
disabilities couldn't do that. Clearly personal motivation is a
factor. They talked about how they couldn't possibly have done
it without the support of their family, their friends, their
employer, without medical insurance, without the support of
their physician.
And virtually everyone said they didn't get much support
from Social Security but that these supports were really
important and it would have been helpful to have gotten more
from the Social Security Administration. So I think if you are
someone who wants to return to work, you can avail yourself of
the ticket to get vocational rehabilitation but you are not
getting the kind of help that I think we see in some of these
other systems, where the program really focuses on individual
needs and capacity.
Chairman Shaw. How would that affect cost containment or
cost efficiency? Are we utilizing our dollars to our best
ability?
Ms. Bovbjerg. I think that if there are people who can work
and who want to work who are on the disability rolls and we are
not helping them work, then we are not spending that money
wisely. I will say that I think as Mr. Matsui points out, this
is not necessarily a small expenditure. We don't know what it
would cost to try to do some of these earlier interventions.
That is something that I think we might know more about once
the Social Security Administration embarks on their
demonstration projects that are authorized under Ticket to
Work.
They are considering an early intervention demonstration
which under a mandate under Ticket to Work we will be looking
at once they start it and that may provide some of the
information that we would need to make these decisions.
Chairman Shaw. Thank you. Mr. McCrery.
Mr. McCrery. Thank you, Mr. Chairman. This is a very
interesting hearing because as Members of Congress we become
involved trying to help constituents qualify, in essence, for
Social Security disability benefits and we become kind of with
tunnel vision just looking to get them on the program, you
know, if they are qualified and make sure they don't slip
through the cracks and we often don't become involved in their
efforts to return to work so this is a very, I think,
worthwhile hearing and subject for us to get into.
You mentioned, Ms. Bovbjerg, that an individual's
motivation is obviously important in whether he or she returns
to work. I am wondering if in your analysis of other countries'
programs or even in private sector programs what incentives you
found in those programs for either the individuals or maybe the
individual's former employer to get that individual back to
work.
Ms. Bovbjerg. The incentives that insurers provide were
among the most important things that we thought we saw.
Insurers begin working with claimants really early in the
process to make sure that they get vocational rehabilitation.
Insurers also review the medical treatment that they are
getting, and make sure that they get the right medical
treatment, help them with a second opinion, another physician,
whatever is necessary.
In terms of employers, the private insurers have the
ability to set the premium that the employer pays, so they are
almost uniquely able to create some direct incentives. They can
set premiums to be lower if the employer is re-employing
disabled workers, and they can subsidize the wages of the
disabled worker, and that is also true in the other countries.
There are a number of things that are done both on the
employer's side and on the individual's side but I did want to
make the comment about motivation, that what we see is that
motivation is higher the sooner that the disability insurer or
the agency works with the claimant; the longer the claimant is
not involved in a return-to-work strategy or is not getting
vocational rehabilitation, the less motivation they have.
Mr. McCrery. And you mentioned the pilot programs that SSA
can do under the Ticket to Work Act. Do you think that one or
more of those pilot programs will include this early
intervention? Is there anything that we can do, Mr. Chairman,
as a Committee to encourage SSA to include those types of
activities in their pilot programs?
Ms. Bovbjerg. I believe that SSA is considering that. We
are hopeful that they will look at early intervention because
that would be another source of information and experience.
Mr. McCrery. Yeah, I mean the evidence that you brought to
us certainly seems to indicate without any doubt that early
intervention is very important but Mr. Matsui and the Chairman
have both raised the question of cost and we don't have any
answers for that so it seems to me that if we know it is
effective in getting people back to work but we don't know the
cost, we ought to encourage SSA to utilize some of the money
under Ticket to Work that they are authorized to use to
discover what in fact the costs are and the benefits are of
early intervention.
It is a rather novel concept in this country, as you know,
for SSA to get involved with rehab before the person is even
qualified for benefits. I mean that is--and sometimes as you
know it takes months and even years for somebody to qualify for
disability benefits so there could be a lot of intervention in
that interim but for us to pay for early intervention before
the person is even qualified is a novel concept so I think we
need some evidence as to the effectiveness of that and whether
it would in the end or in the long run actually save us money
or at least break even. Thank you, Mr. Chairman.
Chairman Shaw. Yes. Mr. Matsui. Mr. Weller, do you have any
questions at this point? Mr. Matsui.
Mr. Matsui. Thank you, Mr. Chairman. I just have a few more
questions and I am sorry I didn't get to them in the first part
of when I asked you. In terms of the private insurance side of
it, it is hard to make comparisons I would imagine because
private insurers can actually, and correct me if I am wrong,
but can pick and choose the various industries in which they
seek to make coverage so they don't have to get, for example,
mine workers if they choose not to but they could go to
lawyers, for example, and so they have a little more
opportunity, I don't want to use the word cherry pick, but at
least selectively pick cases in which it might be a little
easier. So your studies are based upon that first premise, is
that correct?
Ms. Bovbjerg. In talking to private insurers, we really
talked about people with severe disabilities in their group so
I don't want you to think we are talking about returning people
with broken legs to work.
Mr. Matsui. No, no, I am not saying that, but I am just
saying that overall they can survive and make a profit because
their universe is one in which they decide who they are going
to cover.
Ms. Bovbjerg. Yes. That is correct. And I think a big
difference or the most significant difference between the
caseload in the private sector and the caseload under DI is
mental impairment.
Mr. Matsui. That is why to me it is a difficult thing to
make comparisons because if I can select the people I want to
cover, I could probably pick folks that I--you know, it would
be severe disabilities in some cases but on the other hand, you
know, just in terms of the overall efficiency of what I can do
is probably much better than Social Security which has to take
all comers. That is the only thing I am suggesting.
Ms. Bovbjerg. Although I would think that because there is
this triaging concept in the private sector that even with a
different population you wouldn't expend significant return-to-
work resources on claimants who were judged unable to work.
Mr. Matsui. And the second point I would like to just
explore with you is that in your document you indicate that of
those that are insured and receiving benefits from the private
sector two-thirds of those same people receive Social Security
disability benefits as well. And as a result of that it is
really hard then to make a comparison as to how they are
getting along, these people that are disabled, because they
still are receiving SSI, Social Security disability benefits,
is that correct?
Ms. Bovbjerg. Yes, that is right.
Mr. Matsui. And so it makes it difficult then to--you know,
quality of life issues. Is that correct?
Ms. Bovbjerg. It is difficult.
Ms. Petersen. Well, I was going to add that because there
is such a high proportion of people on the private rolls, that
also qualify for DI that we felt that helped us in some ways
make comparisons between the two insurers, the public SSA and
the private sector, because at least for a very large portion
of people the degree of impairment severity was comparable,
although as you point out there are some differences in terms
of occupations and the types of impairments. The biggest one,
as you mentioned, is that the private insurers do not have the
same proportion of people with mental impairments.
Mr. Matsui. Thank you. Thank you, Chairman.
Mr. Weller. Thank you, Mr. Chairman. I got a couple
questions I would like to direct to Ms. Bovbjerg. In your
testimony you stated that you believe that SSA should intervene
earlier to foster a greater emphasis on assisting disabled
applicants and beneficiaries in returning to the work force.
How do you believe this should work? What would you recommend?
Ms. Bovbjerg. Our recommendation for SSA is actually a
little bit of a step back from that; it is to develop a
comprehensive strategy for return-to-work. Part of that might
include earlier intervention because, as Mr. McCrery mentioned,
earlier action is really so central to what is done in these
other systems and the people we spoke to seem to believe that
that is crucial to their success.
But I think that SSA really needs to consider how they
would integrate this within their current policies--what would
be most effective, what would have to change, how does it work
with the process that is now in place or with a redesigned
disability process. So I would be very reluctant to recommend
just taking what one of the private sector companies does and
dropping it into SSA because I think it is much more complex
than that. And as we have discussed earlier, we are not at all
clear on what these things would cost and what the benefits
would be.
Mr. Weller. Also in looking at your testimony you of course
focused attention on the less stringent definition of
disability that was used initially by private sector companies.
How would it work if SSA departed from its current all or
nothing definition disability and shifted it to recognize the
possibility of improvement in the capacity to work through the
provisions of supports and services such as retraining?
Ms. Bovbjerg. That is one way that other systems address
early intervention. They have this transitional period where
they help people return to work before a more rigorous
definition of disability is applied. That would require a
change in law and that would be something that you would want
to look at in light of this comprehensive strategy, and you
might want to consider things that could be done within current
law first. I just wouldn't think about these things in
isolation.
Mr. Weller. Ms. Petersen, do you have anything to add?
Ms. Petersen. Well, it is true that the private sector and
the other countries start off with a less restrictive
definition and they move to the more restrictive definition but
even when they are assessing their applicants against the more
restrictive definition their determination process looks very
different from that of SSA.
Again, SSA's process of determination focuses on an
applicant's ability to prove incapacity to work, to focus on
the degree of impairment severity, whereas the private sector's
and the other countries' determination processes focus on an
approach to determine what type of work capacity exists, the
potential that the claimant has to return to work, and what
types of supports and accommodations and other types of
assistance, whether it be medical or vocational, could be put
in place to facilitate a person returning to the workplace. So
even under more restrictive definitions, the process looks
very, very different.
Mr. Weller. OK, thank you. Thank you, Mr. Chairman.
Chairman Shaw. Thank you, and I thank the panel. Thank you
very much.
Ms. Bovbjerg. Thank you, Mr. Chairman.
Chairman Shaw. We now have a rather large panel, Dr. Edward
Berkowitz, Professor and Chair, Department of History at George
Washington University; Donald Lollar, Chief, Disability and
Health Branch, National Center for Environmental Health, Center
for Disease Control and Prevention, Department of Health and
Human Services, from Atlanta, Georgia; Richard Baron, who is
the Project Director of the Pew Fund for Health and Human
Services for Vulnerable Adults, OMG Center for Collaborative
Learning in Philadelphia, Pennsylvania; Dr. Richard Burkhauser,
Sarah Gibson Blanding Professor of Policy Analysis and Chair of
the Department of Policy Analysis and Management, Cornell
University; Ralph Mohney, who is the Senior Vice President,
Customer Care Center; and Tony Young, who is Co-Chair, Social
Security Taskforce, Consortium for Citizens with Disabilities
and Director of governmental Affairs, NISH, Vienna, Virginia.
Welcome, gentlemen. We have each of your full statements,
which will be made a part of the record and you may proceed as
you see fit. Dr. Berkowitz.
STATEMENT OF EDWARD D. BERKOWITZ, PH.D., PROFESSOR AND CHAIR,
DEPARTMENT OF HISTORY, GEORGE WASHINGTON UNIVERSITY
Mr. Berkowitz. Thank you. I believe that history provides
the best means of explaining why our disability programs have
the structures that they do. Once we know why something was
done in the first place, we can begin to decide whether it is
worth changing. Planners in the Social Security Administration
wrote a tough definition of disability into their proposals so
as to distinguish sharply between unemployment and disability
but they knew that if the program were administered in too
severe a manner then the courts and the Congress would force
Federal officials to admit more people to the rolls.
They realized that disability was an elastic concept. By
1949 the opponents of SSDI had begun to argue that people with
disabilities should receive rehabilitation rather than a
pension that allowed them to retire from the labor force for
life. Conferees considering disability legislation in 1952 came
up with the idea of letting the states rather than the Federal
Government make the initial determinations of disability, a
feature of the program that survives to the present day and
which can only be explained by understanding the historical
context in which it arose.
In 1954 officials in the Eisenhower administration argued
that rehabilitation should be expanded rather than passing a
disability insurance program. They wanted to limit tickets out
of the labor force and instead encourage people to enter the
labor force. The Secretary of Health, Education and Welfare
recommended, for example, that Social Security trust fund money
be used to provide rehabilitation services but not cash
benefits to insured people who became disabled.
Congress passed SSDI in 1956 but in its formative years
between 1956 and 1960 SSDI paid benefits only to workers who
were 50 years of age or older. That meant that the linkage
between applicants for disability benefits and vocational
rehabilitation never took hold since older individuals were not
good candidates for rehabilitation. The SSDI program became,
like Social Security itself, a retirement program. SSI arose as
part of a discussion of welfare reform that began in 1969.
But policy makers failed to anticipate important trends.
Few people thought to ask what effect the new law would have on
disability. Instead, Congress reflexively assigned welfare
beneficiaries to the administrative apparatus already
established to administer SSDI benefits. In thinking about SSI,
policy makers envisioned that it would apply mainly to the
elderly who had traditionally dominated the adult welfare
categories. At the beginning, people with disabilities made up
less than half of the SSI caseload.
But when Congress was considering SSI the incidence of
disability was growing at a unprecedented rate; hence,
circumstances that could have been foreseen favored a rise in
the disability categories of SSI. Armed with that knowledge,
policy makers might have designed SSI differently. As things
turned out, adults and children who were either blind or
disabled represented nearly two-thirds of the SSI caseload by
1994.
That meant that just as disability was grafted onto a
retirement program for the elderly in the SSDI program so it
was added to a welfare measure that Congress intended primarily
as a means of serving the elderly. Another anomaly in SSI was
that the entire discussion focused on the so-called adult
welfare categories but many SSI recipients turned out to be
children. That meant that a disability determination system
intended to serve people who had been in the labor force was
forced to handle many claims for children.
It shouldn't be surprising that a disability system
developed in the thirties and created during the political
conflicts of the fifties and seventies should expenience
strains after nearly a half century of operation, but as we
modernize the system we might want to keep in mind that things
seldom work out as planned. If we restrict benefits, for
example, we have to be careful to avoid the situation that
occurred after 1981 in which policy makers sought to tighten
the rolls but ended up greatly increasing the size of the
rolls.
As we modernize, we shouldn't be blinded by false hopes as
I think have arisen in the implementation of the Americans with
Disabilities Act. The ADA has not led to the substitution of
jobs and independent living for cash disability benefits
despite the hopes of those who lobbied for the law's creation.
In the field of welfare, we should remember that the SSI
Program was itself an attempt to modernize the system but
because policy makers failed to spot emerging trends the new
program developed its own problems.
So I would end by saying that sometimes the only
explanation for a particular policy is historical but even if
we know that we are not ourselves immune from historical
forces. Thank you.
[The prepared statement follows:]
Statement of Edward D. Berkowitz, Ph.D., Professor and Chair,
Department of History, George Washington University
I am Edward Berkowitz, and I am the chair of the Department
of History at George Washington University. Much of my research
has focused on disability policy and on Social Security policy.
My job today consists of providing a historical overview of
Social Security Disability Insurance and Supplemental Security
Income. My hope is that by observing these programs with a
historical eye, members of this committee, who have inherited
the present system, will be able to see just why our disability
income policy has the structure that it does. Armed with this
information, policymakers can begin to decide which aspects of
the system are worth changing. In the process of making those
changes, I would hope that Congressmen would attempt to spot
emerging trends of the sort that have so often have caused
outcomes to diverge from expectations in the field of
disability policy. Because this hearing marks a step in that
direction, I applaud its intent.
Social Security Disability Insurance
Although Social Security Disability Insurance did not
become law until July, 1956, a long period of discussion both
in the executive agencies and in Congress preceded its passage.
Planners in the Social Security Administration began their
consideration of this measure in 1936. They devised a program
that they felt could withstand the pressures of the depression.
In particular, they wrote a tough definition of disability into
their proposals so as to distinguish sharply between
unemployment and disability. Instead of adopting a definition
similar to the ones in the existing workers' compensation and
veterans pension laws, they chose to define disability as ``an
impairment of mind or body which continuously renders it
impossible for the disabled person to follow any substantial
gainful occupation,'' and was likely to last for ``the rest of
a person's life.''
Even with this tough definition, which is similar to the
one in the present law, many doubted the ability of federal
officials to administer a disability program. As an actuary who
served on the 1938 Social Security Advisory Council put it,
``You will have workers like those in the dust bowl area,
people who have migrated to California and elsewhere, who
perhaps have not worked in a year or two, who will imagine they
are disabled.'' The actuary warned that unless a highly
qualified medical staff examined each applicant, the cost of
the program would be higher than ``anything that can be
forecast.''
Although the Social Security officials sought a strict
definition of disability, they knew that, if the program were
administered in too severe a manner, then the courts and the
Congress would act to make federal officials admit more people
to the disability rolls. One of the principal Social Security
researchers thought of disability as an elastic concept. ``Too
strict a system invites pressure to swing in the opposite
direction,'' he said. His remarks foreshadowed the volatility
that would accompanied disability insurance after 1956 and in
particular the sequence of rapidly expanding rolls in the
1970's, attempts to stop the growth of the rolls in the early
1980's, and the rise in the rolls in the later 1980's and early
1990's.
Much of the conceptual work that underpinned Social
Security Disability Insurance took place in the 1930's and
early 1940's. Passage of the measure did not occur until the
1950's. The delay reflected the understandable lack of
attention to domestic policy during the years of World War II
and the reality that public assistance paid higher benefits and
reached more people than did Social Security between 1935 and
1950. Members of Congress who represented constituents in areas
that contained few industrial and commercial workers had no
reason to wish to expand Social Security, much less to
acquiesce to the passage of Social Security Disability
Insurance.
Social Security Disability Insurance did not receive
serious attention from Congress until the Committee on Ways and
Means held hearings on this topic, and other topics related to
Social Security, in 1949. By this time the depression was over,
and wartime conditions had helped to bring rehabilitation
medicine to maturity. As a consequence, the opponents of Social
Security Disability Insurance argued that people with
disabilities should receive rehabilitation, rather than a
pension that allowed them to retire from the labor force for
life. Social Security officials conceded the importance of
rehabilitation and even gave serious consideration to
recommending that applicants to the disability rolls should
receive rehabilitation services and interim payments before
they entered the rolls on a permanent basis. They managed to
persuade the Committee, however, that, important as
rehabilitation was, it did not supersede the need for cash
benefits. As a consequence, the Committee included a disability
insurance program in the bill that the House of Representatives
passed in 1949.
The Senate chose to emphasize rehabilitation, rather than
cash benefits, and did not include disability insurance in its
version of the Social Security bill that was passed in 1950.
The House receded in conference, and as a compromise measure
Congress adopted a new public assistance category, Aid to the
Permanently and Totally Disabled. Up until 1950, Aid to the
Blind had stood alone as a federally assisted public assistance
program that reached people with disabilities.
After 1950 Social Security became a popular program that
received bipartisan support, both within the Committee on Ways
and Means and in Congress itself. Social Security Disability
Insurance, by way of contrast, remained a controversial
measure, and the Senate Finance Committee, in particular,
refused to recommend it to Congress. A series of incremental,
compromise laws in 1952 and 1954 paved the way for the final
passage of SSDI in 1956.
The 1952 legislation introduced the idea of a disability
freeze, in which a person could receive Social Security
benefits at the normal retirement age, even if he or she
dropped out of the labor force for a substantial period of time
because of a disability. This measure passed Congress only
after the conferees considering the legislation agreed to the
unusual step of letting the disability freeze expire before it
could take effect. More importantly, the conferees came up with
the idea of letting the states, rather than the federal
government, make the initial determinations of disability--a
feature of the program that survives to the present day and
which can be explained only by understanding the historical
context in which it arose.
In 1954, as part of the Eisenhower administration's plan to
expand the vocational rehabilitation program and to use the
Social Security program as a means of identifying candidates
for rehabilitation, Congress passed a disability freeze
measure. At this time, Secretary Oveta Culp Hobby, the second
female cabinet officer in the nation's history, recommended
that Social Security trust fund money be used to provide
rehabilitation services, but not cash benefits, to insured
people who became disabled. She argued that the investment of
OASI funds would be small but ``no accountant can estimate the
physical rewards, the sense of independence, pride and
usefulness and the relief from family strains which accrue to
one of the disabled when he returns to his old job or to a
newly learned job suited to his limitations.'' Her sentiments
reflected the feelings of many within the Eisenhower
administration such as those of Assistant Secretary of Health,
Education, and Welfare Roswell Perkins who said that the
administration's philosophy was that ``the first line of attack
on disability should be rehabilitation, in order that people be
restored to useful and productive lives.''
In 1955 the House once again passed a disability insurance
measure and in 1956 the Senate Finance Committee once again
opposed it. That set up a dramatic fight on the floor of the
Senate that resulted in the passage, by the barest of margins,
of Social Security Disability Insurance. As a means of
gathering support, the proponents of the legislation limited
benefits to those fifty or older and did not include benefits
for the dependents of disabled workers.
In its formative years between 1956 and 1960, therefore,
SSDI paid benefits only to workers who were fifty years of age
or older. That meant that the linkage between applicants for
disability benefits and vocational rehabilitation never took
hold, since everyone agreed that older individuals made the
worst candidates for rehabilitation and the state vocational
rehabilitation agencies were simply unable to cope with the
large numbers of people who applied for disability benefits. It
also meant that the caseload contained a disproportionate
number of people with impairments that affected older
individuals, such as heart disease and arthritis, rather than
people with impairments or conditions that affected younger
individuals, such as mental disorders. In effect, despite the
eventual use of trust fund money to pay for the rehabilitation
of people on the SSDI rolls, the SSDI program became, like the
Social Security itself, a retirement program.
At the time, policymakers tended to think of the system for
caring for people with mental illness, who occupied the
majority of the beds in the nation's hospitals, as a state
responsibility. There was little desire to use Social Security
money to subsidize state mental health hospitals. In the
earliest drafts of the disability insurance legislation,
prepared in the 1930's and 1940's, the planners specified that
no benefits were to be paid to those with mental disabilities.
In defense of this position, they argued that most people with
mental disabilities were already taken care of in state
hospitals, that mental disabilities were difficult to
diagnosis, and that mental disabilities had created problems in
foreign disability insurance programs, such as the one in
Sweden. They worried that benefits for people with mental
disabilities would result in malingering. This suspicion of
mental illness as a basis for disability benefits persisted in
the program that was passed in 1956 and made it difficult for
the system to cope with the revolution in social policy
unleashed by the deinstitutionalization movement in the 1960's.
Supplemental Security Income
Supplemental Security Income, the other pillar of our
modern disability system, arose as part of a discussion of
welfare reform that President Richard Nixon initiated in 1969.
Here, as with SSDI, historical particulars mattered. As it
became clear that the President's comprehensive plan to change
the Aid to Families with Dependent Children Program would not
pass Congress, attention shifted to the reform of what
policymakers called the adult welfare categories. In
particular, the notion arose that the administration of Aid to
the Blind, Aid to the Permanently and Totally Disabled, and Aid
to the Elderly should be federalized and run by the Social
Security Administration.
Because policymakers did not engage in the sort of
oversight (that, for example, the present hearing represents),
they failed to anticipate important trends. At the time people
pointed to more adequate benefits as a reason for the creation
of the program. In particular, Congress hoped to do away with
such things as lien laws and to model the new law on practices
in the more progressive states. Social Security Administration
officials supported the law because they hoped it would take
away some of the pressure to raise the minimum benefit under
Social Security and hence strengthen the relationship between
contributions and benefits. Few people thought to ask what
effect the new law would have on disability. Instead,
policymakers reflexively assigned welfare beneficiaries to the
administrative apparatus already established to administer SSDI
benefits. Hence, states made the initial disability
determinations under SSI, just as they did under SSDI, and the
two programs used a common definition of disability.
In thinking about the new program, policymakers envisioned
that it would apply mainly to the elderly, who had
traditionally dominated the adult welfare categories. Social
Security officials believed that many SSI recipients would be
people already receiving Social Security benefits but who found
that these benefits were not enough to bring them out of
poverty. At first these assumptions proved to be correct. When
SSI began in 1975, blind and disabled adults and children
represented only 42% of the caseload. At the same time that
Congress considered SSI, however, the incidence of disability
was growing at an unprecedented rate. The highest rates of
growth of the SSDI rolls, for example, occurred between 1971
and 1975. Hence, circumstances favored a rise in the disability
categories of SSI. Furthermore, in the same year that Congress
created SSI, it also provided a 20% increase in Social Security
benefits and indexed benefit levels to the rate of inflation.
This action had the effect of raising replacement rates under
Social Security and lessening the chance that an elderly Social
Security recipient might also need to receive SSI. As a result
of these two forces, adults and children who were either blind
or disabled represented nearly two thirds of the SSI caseload
by 1994.
That meant that just as disability was grafted on to a
retirement program for the elderly in the Social Security
Disability Insurance program so it was added to a welfare
measure that Congress intended primarily as a means of serving
the elderly.
Another anomaly in Supplemental Security Income was that
the entire discussion focused on what nearly everyone called
the ``adult welfare categories.'' As things worked out,
however, many SSI recipients turned out be children. By 1992,
for example, 16 percent of SSI beneficiaries under age 65 were
children. That meant that a disability determination system
intended to serve people who had been in the labor force was
forced to handle many claims from children. Friction developed
between the courts and other overseers of the disability
determination process and the Social Security Administration,
leading to such cases as the 1990 Sullivan v. Zebley decision.
Conclusion
It should not be surprising that a disability system
developed in the 1930's and created during the political
conflicts of the 1950's and 1970's should experience strains
after nearly half a century of operation. Still, the warnings
of the system's founders remain relevant Simply put, things do
not always work out as planned in disability policy. Correcting
the system's flaws by restricting benefits can, for example,
lead to a reaction of the sort that occurred between 1981 and
1984. By the time that Congress acted in 1980 in response to
rising disability rolls, the disability incidence rate was
already heading down. After the administration moved to
implement the new law in an aggressive manner beginning in
1981, the system nearly fell apart, as governors ordered their
state disability determination offices not to cut people from
the rolls and administrative law judges and the courts reversed
many of the policies of the Social Security Administration. The
ultimate result was that more people, rather than less, entered
the rolls.
Similarly, the creation of important civil rights laws such
as the Americans with Disabilities Act has failed to have an
immediate impact on the disability rolls. The ADA has not led
to the substitution of jobs and independent living for cash
disability benefits, despite the hopes of those who lobbied for
the law's creation.
In the field of welfare, the SSI program, because
policymakers failed to spot emerging trends, developed in ways
unanticipated by its founders.
As my testimony has demonstrated, outcomes do sometimes
diverge from expectations. It seems to me that fact only
increases the responsibility of this subcommittee to survey the
landscape and identify emerging trends. As it does so, the
subcommittee should realize that sometimes the only explanation
for a particular policy is historical.
Chairman Shaw. Thank you. Dr. Lollar.
STATEMENT OF DONALD LOLLAR, ED.D., CHIEF, DISABILITY AND HEALTH
BRANCH, NATIONAL CENTER FOR ENVIRONMENTAL HEALTH, CENTERS FOR
DISEASE CONTROL AND PREVENTION, U.S. DEPARTMENT OF HEALTH AND
HUMAN SERVICES, ATLANTA, GEORGIA
Mr. Lollar. Mr. Chairman, Members of the Committee, I
appreciate having the opportunity to speak to the Committee
today. I am Dr. Don Lollar, Chief of the Disability and Health
Branch in the National Center for Environmental Health at the
Centers for Disease Control and Prevention. The mission of the
CDC is to promote health and quality of life by preventing and
controlling disease, injury, and disability.
We do this by identifying public health problems,
determining the scope of these problems, conducting research to
identify their preventable causes and then implementing public
health interventions. The Disability and Health Branch's
mission at CDC is to promote the health and well being of all
people with disabilities. Our branch is currently supporting
both research to better measure the disabling process and we
support state programs to improve the health of people with
disabilities.
I want to focus on two primary areas. First, I will
describe how the social and physical environment plays a vital
role in either inhibiting or encouraging people with a
disability to participate fully in society. Second, I will
describe in broad terms how an emerging World Health
Organization (WHO) classification system can influence how
society better defines and meets the needs of people with
disabilities.
Typically when a person with a physical, intellectual or
emotional impairment is not participating in society the way
other people do, we assume that it is because the person's
disabling condition itself prevents them from doing so. In
reality, disability is a complex interaction of the person with
their environment. Some factors that influence participation
are within a person, including medical conditions, personal
strength and limitations, but other factors are outside a
person including the physical and social environments. Advances
in technology and changes in attitudes have made it clear that
people with disabling conditions are capable of doing many
things. Technology has provided the tools to help people with
disabilities perform daily life tasks vital to their autonomy
such as personal care, mobility, communication and even
learning.
Assistive devices and technologies that allow more personal
autonomy include power chairs, voice synthesizers and special
telephones and computers; but, in addition, factors such as
accessibility to buildings or transportation and acceptance by
others also influence participation at work or school.
Unfortunately, not all people with disabilities have access to
these technologies nor have all attitudes in our society
changed. As a result, the opportunities for complete
participation that are possible have not been extended to all
persons with a disability.
To describe these various disability dimensions, the World
Health Organization has developed the International
Classification of Functioning and Disability, the so-called
ICIDH-2. This classification is a way to understand and
communicate more clearly about the disabling process. The
system describes the various dimensions of the disabling
process, which includes physical or body functions, everyday
personal activities, societal participation, and the
environmental factors.
ICIDH-two can enable society to better define and meet the
needs of people with a disability. The advantages of this
system are that it combines an understandable framework, which
includes environmental factors, and provides a classification
system as the basis for future research. While the concepts of
ICIDH-2 are useful its implementation is just beginning. The
future utility of the system will depend on how widely it is
used and how well users are able to apply it.
A useful system of classifying disability elements needs to
recognize the complexity of the interactions between people
with disabilities and their physical and social environments.
Disability policy should more broadly address the various
environmental barriers that restrict full participation by
people with disabilities. CDC would be pleased to work with
this Committee, with other Federal and state agencies and
researchers in the private sector to improve the health and
participation of people with disabilities. Thank you, Mr.
Chairman.
[The prepared statement follows:]
Statement of Donald Lollar, Ed.D., Chief, Disability and Health Branch,
National Center for Environmental Health, Centers for Disease Control
and Prevention, U.S. Department of Health and Human Services, Atlanta,
Georgia
Mr. Chairman, Members of the Committee.
I appreciate being given the opportunity to speak to the
Committee today. I am Dr. Donald Lollar, Chief of the
Disability and Health Branch in the National Center for
Environmental Health at the Centers for Disease Control and
Prevention. The mission of the CDC is to promote health and
quality of life by preventing and controlling disease, injury,
and disability. We do this by identifying emerging and
reemerging public health problems, determining the scope of
these public health problems, conducting research to identify
preventable causes of public health problems, and developing
and evaluating public health intervention programs. Since 1988,
the mission of the Disability and Health Branch has been to
promote the health and well being of all people with
disabilities in the U.S. including the millions of people
served by Supplemental Security Income and Social Security
Disability Insurance. The Disability and Health Branch is
currently supporting both research to better measure the
disabling process and state programs to improve the health of
people with disabilities.
I will focus on two primary areas. First, I will describe
how the social and physical environment plays a vital role in
either inhibiting or encouraging people with a disability to
participate fully in society. Second, I will describe in broad
terms how an emerging World Health Organization classification
system might influence how society better defines and meets the
needs of people with disabilities.
Typically, when a person with a physical, intellectual, or
emotional impairment is not participating in society the way
other people do, one assumes that it is because the person's
disabling condition prevents them from doing so. In reality,
disability is a complex interaction of a person with their
environment. Some factors that influence participation are
within a person, including medical conditions, personal
strengths and limitations. Other factors are outside a person,
including the physical and social environments. Advances in
technology and changes in attitudes have made it clear that
people with disabling conditions are capable of doing many
things.
Technology has provided the tools to help people with
disabilities perform daily life tasks vital to their autonomy
such as personal care, mobility, communication, and learning.
Assistive technologies that allow more personal autonomy
include power wheelchairs, voice synthesizers, and special
telephones and computers. In addition, factors such as
accessibility to buildings or transportation and acceptance by
others also influence participation at work or school.
Unfortunately not all people with disabilities have access to
these technologies, nor have all attitudes in our society
changed. As a result, the opportunities for complete
participation that are possible have not been extended to all
persons with a disability.
Let me give you an example. Jonathan is a young 21 year old
with cerebral palsy. Without assistance, he is substantially
limited in personal activities, such as mobility and
communication. With the aid of a power wheelchair and a voice
synthesizer, he can move around and communicate with others.
His family has purchased an adapted van that allows him to
travel.
Jonathan faces several types of barriers to his full
participation, some at the person-level and some at a broader
societal level. Technology has removed several of his person-
level limitations, such as in the areas of freedom of movement
and accessibility. If, however, Jonathan wants to participate
more fully in society, such as by working or developing
friendships, other environmental factors must be addressed. In
addition to matching his abilities with potential jobs he might
consider, the work place must be accessible for his wheelchair
and, not unlike many of us, his work setting may need to be
adapted to accommodate his needs. Coworkers' attitudes toward
Jonathan--both positive and negative--also impact his
participation.
To assess the various disability dimensions, the World
Health Organization (WHO) has developed the International
Classification of Functioning and Disability (ICIDH-2). The
ICIDH-2 is a way to understand and communicate more clearly
about the disabling process. The system describes the
relationships between the various parts of the disabling
process--the physical or body functions, the personal everyday
activities, participation in society, and environmental
factors. ICIDH-2 provides a common language that allows us to
talk with one another about the different life dimensions
people with disabilities experience. The language describes
each individual dimension separately and then focuses on how
they may interrelate with each other. Jonathan, for example,
experiences impairments of various body systems, has difficulty
with everyday activities of moving around, personal care, and
communication. With the intervention of assistive technology,
his activity limitations are reduced. Even with greater
performance in personal everyday activities, however, he may
still be restricted from participating in work, recreation, or
even social relationships. This restriction in participation
is, in this case, not associated with his impairments or his
personal activity limitations, but rather due to environmental
factors, such as architectural barriers, social program
guidelines, or attitudes toward people with disabilities.
The ICIDH-2 may enable society to better define and meet
the needs of persons with a disability. The advantages of
ICIDH-2 are that it combines an understandable framework, which
includes environmental factors, addresses the interaction of
the person and the environment on participation in society, and
creates a commonly used classification system for future
research. While the concepts of ICIDH-2 are useful its
implementation is just beginning. The future utility of the
system will depend on how widely it is used and how well users
are able to apply it.
To put it another way, participation in work, school, or
any other area of daily life depends on both the individual and
their environment. As their circumstances or situations change,
an individual with an impairment or disability who was not
previously able to do so may be able to attend school or work.
A useful system of classifying disabilities needs to
recognize the complexity of the interactions between people
with disabilities and their physical and social environments.
Disability policy should more broadly address environmental
barriers, which restrict full participation by people with
disabilities. CDC would be pleased to work with this Committee,
other federal and state agencies, and researchers to improve
the health and participation of people with disabilities.
Thank you, Mr. Chairman and members of the Committee, for
the opportunity to come before you today. I will be happy to
answer any questions you have about CDC's Disability Program or
any other areas of my remarks today.
Chairman Shaw. Thank you, Dr. Lollar. Mr. Baron.
STATEMENT OF RICHARD C. BARON, M.A., PROGRAM DIRECTOR, PEW FUND
FOR HEALTH AND HUMAN SERVICES FOR VULNERABLE ADULTS, OMG CENTER
FOR COLLABORATIVE LEARNING, PHILADELPHIA, PENNSYLVANIA
Mr. Baron. Good morning. My name is Richard Baron, and I
want to focus today on the sometimes surprising results of a
research project I recently completed, and the implications of
those results for the Social Security disability program's
dramatically large number of beneficiaries and recipients who
have a serious mental illness. Let me tell you the gist of my
comments first. The vast majority of people with serious mental
illness are desperately poor, and are likely to remain at or
near the poverty level for the remainder of their lives,
whether they work or not.
It is time that the country and SSA commit itself not
merely to getting people back to work or off the SSA rolls, but
more significantly to helping people with serious mental
illness who work to claim a fair share of the nation's
prosperity. Although I have recently taken a job at the OMG
Center in Philadelphia, where I direct the Pew Fund's Health
and Human Services grant making program for vulnerable adults,
for the past 2 years I have been engaged in an independent
research project funded by a Switzer Fellowship from the
National Institute on Disability and Rehabilitation Research,
exploring the long-term career patterns of people with serious
psychiatric disabilities.
In extensive, qualitative interviews people with serious
mental illness talked with me about their attitudes toward
work, the many jobs they had held in the past, their employment
aspirations, and the impact of the Social Security disability
program on their careers. This research offers some
surprisingly encouraging news. First, the people I interviewed
were overwhelmingly enthusiastic about working. They readily
understood the financial, psychiatric, and social benefits that
work provides.
There is no great value divide between the rest of us and
those with disabilities. Nearly everyone wants a good job.
Second, most of those I talked to had worked a great deal and
had worked successfully, both before and after their diagnosis
and before and after their eligibility for Social Security.
Those I interviewed had each held many jobs with an average job
tenure at each job of 18 to 24 months. Interviewees reported
that they had been both productive and personable on the job.
They had been well worth their paychecks and they had gotten
along with their colleagues.
Third, the people I interviewed reported that they were
only rarely fired. Indeed, about half of my interviewees left
jobs for reasons that had nothing at all to do with mental
illness: a company closed down or left town, elderly parents
got sick or moved, the boss made unreasonable demands, or the
salary was just too low. Almost no one had the kind of on-the-
job meltdown our rehabilitation programs dread although people
sometimes did lose jobs because they were too depressed to get
out of the house, too manic to resist an adventure or too
paranoid to face co-workers.
Fourth, I want to underline that people did not receive
their first diagnosis of serious mental illness and grab the
next cab for the local Social Security office. Despite mounting
psychiatric problems people often worked for years trying to
avoid a life of public dependency before turning to SSA. And,
as you know, many continue to work after SSA eligibility but
only at levels that would allow them to sustain their critical
life line to consistent medical support.
However, beneath these positive notes about the work
motivation and work success of people with serious mental
illness lies a harsh reality. Most people with serious mental
illness who have worked in the past or are working now are
employed in entry level, low wage, minimal benefit, and part-
time jobs that do not provide them access to prosperity. More
than 75% of the job placements made by rehabilitation agencies
only help people toward the kinds of secondary labor market
jobs that they have already proven fairly adept at obtaining
for themselves.
Thus, there is often little discernible economic difference
for people with serious mental illness between working and not
working. Such limited outcomes are unfortunate not only because
those jobs simply do not provide living wages that lift people
out of poverty but also because such jobs no longer serve as
stepping stones to permanent full-time jobs with decent
benefits, and those I interviewed were acutely aware of how
unlikely it was that they would be able to find good jobs in
the future.
Many understood that this had as much to do with their lack
of educational qualifications as it did with their psychiatric
disability. Their work prospects today are similar to those of
many working class people without disabilities. The gap between
the rich and the poor is widening most often because good jobs
are beyond the grasp of poor people. Either they cannot manage
the full-time demands of the careers emerging in the new
economy or they haven't the college degrees, technical skills,
or work histories these jobs demand.
We ought not to delude ourselves that helping someone with
a serious psychiatric disability, or with any serious
disability or educational disadvantage, to obtain an entry
level part-time or even full-time job is enough. Our economy
does not provide the right kinds of opportunities for the
typical SSA client to make real economic progress in the
secondary labor market. We have to establish longer term
programs that genuinely help people to move into the economic
mainstream, and this means that we have to make more
substantial educational, training and other investments in
beneficiaries and recipients themselves.
It is clearly a failure of public policy to pretend that
getting off the SSA rolls or extending medical eligibility is
enough to escape poverty. It is just not so. I was struck in
the course of these interviews by how many women talked about
wanting a decent place of their own and how many men talked
about their longing to own a used car. These are not elaborate
delusions or self-indulgent ambitions for today's Americans but
they remain at present completely beyond the grasp of most
people with serious mental illness. This should not be so.
Thank you.
[The prepared statement follows:]
Statement of Richard C. Baron, M.A., Program Director, Pew Fund for
Health and Human Services for Vulnerable Adults, OMG Center for
Collaborative Learning, Philadelphia, Pennsylvania
Good morning. My name is Richard Baron, and I want to talk
to you today about the sometimes surprising results of a
research project I have recently completed, and the
implications of those results for the Social Security
disability program as it continues to work toward meeting the
changing needs of people with disabilities, particularly the
large number of individuals on the SSA rolls who have a serious
mental illness.
Let me tell you the gist of my comments before I fill in
some of the details: the vast majority of people with serious
mental illness are desperately poor, and are likely to remain
at or near the poverty level for the remainder of their lives,
and will do so--unless there are significant changes in our
national policies--whether they work or not. It is time that
the country commit itself not merely to getting people 'back to
work' or 'off the SSA rolls,' but, more significantly, to
helping people with serious mental illness who work to claim
some fair share of the nation's remarkable prosperity.
Although I have recently taken a job at the OMG Center for
Collaborative Learning, in Philadelphia, where I direct the Pew
Fund's Health and Human Services grant making program for
vulnerable adults, from 1973 to 1998 I worked at Matrix
Research Institute, a private nonprofit research and training
center, also in Philadelphia, with a focus on improving
rehabilitation and employment services for people with serious
mental illness.
For the past two years, however, I have been engaged in an
independent research project, funded by a Switzer Fellowship
from the National Institute on Disability and Rehabilitation
Research, in which I explored the long term career patterns of
individuals with substantial and sustained psychiatric
disabilities, through in-depth qualitative interviews with
individuals across the Eastern half of the United States. In
these interviews, people with serious mental illness talked at
length about their attitudes toward work, each one of the many
jobs they had held in the past, their employment aspirations
for the future, and the impact of the Social Security
disability program on all of this.
First, then, this research has some surprisingly
encouraging news. The people I interviewed were overwhelmingly
enthusiastic about working: they understood all too well the
financial, psychiatric and social benefits that work provides,
and although they report that neither their clinicians nor
their rehabilitation programs are very encouraging with regard
to work, they long for the sense of independence and normalcy
that working offers. There is no great 'value divide' between
the rest of us and those with disabilities: nearly everyone
wants a good job.
Second, most of those I interviewed had worked a great
deal, and had worked successfully, both before and after their
diagnosis, and before and after their eligibility for the
Social Security disability program. Those I interviewed had
each held 6 -8 jobs, and their average job tenure was around 18
months. They reported that they had been both productive and
personable on the job: they had been well worth their
paychecks, and they had gotten along with their colleagues.
They knew full well that they both should and could work in the
competitive labor market.
Third, the people I interviewed reported that they had left
far more jobs than they had been fired from. About half of the
reasons people left jobs had nothing at all to do with mental
illness: a company closed down or left town; elderly parents
got sick or moved; their boss made unreasonable demands or
their salary was just too low--all the kinds of reasons you
hear from people without psychiatric disabilities in a
turbulent job market. While the other half of job losses were
indeed related to their psychiatric disabilities, almost no one
had the kind of on-the-job meltdown our rehabilitation programs
dread: most people lost their jobs because they were too
depressed to get out of the house, too manic to resist an
adventure, too paranoid to face coworkers, or too quickly
hospitalized to open up the shop that morning.
Fourth, people did not receive their first diagnosis of
serious mental illness and grab the next cab for their local
Social Security Office: despite their mounting psychiatric
problems, people often worked on and off for years before
entering the SSA rolls, trying to avoid a life of public
dependency. And, as you know, many continue to work after SSA
eligibility, walking the fine line that the system of
disincentives forced them to walk in order to sustain their
critical lifeline to consistent financial and medical support.
However, beneath this positive news about their motivation
and relative success at work lies a harsh reality. Most people
with serious mental illness who have worked in the past or are
working now are employed in those entry-level, low-wage,
minimal-benefit, and part-time secondary labor market jobs that
do not provide them access to any reasonable measure of
prosperity. More than 75% of the job placements made from the
state/federal vocational rehabilitation system or the nation's
critically-needed network of psychosocial rehabilitation
agencies--including those that are part of the nation's
supported employment initiatives--help people toward the kinds
of jobs that they had already proven themselves fairly adept at
obtaining for themselves.
Such limited outcomes are unfortunate not only because
those jobs simply do no provide a 'living wage' that lifts
people out of poverty, but also because such jobs no longer
serve as a stepping stone to permanent full-time jobs with
decent benefits. There was, among the people I interviewed, a
pattern of significant gaps in their work histories. Some of
these gaps were no doubt due to prolonged psychiatric
hospitalizations and post-hospital recovery periods, but it was
clear to me that a good percentage of unemployment was due to
the fact that there is little discernible economic difference
for them between working and not working.
Those I interviewed were acutely aware of how unlikely it
was that they would be able to substantially improve upon their
current lifestyles, whether they worked or they did not, and
that this 'parchment ceiling' had as much to do with their lack
of educational qualifications as it did with their psychiatric
disability. Their work prospects, like their work histories,
are similar to those of many working class people without
disabilities in the current economy, in which the gap between
the rich and the poor is widening: the 'good jobs' are often
beyond their grasp. Either they cannot manage the full-time
ongoing demands of the careers emerging in the 'new economy,'
or they haven't the college degrees, technical skills, or work
histories these jobs demand. Like other's in the secondary
labor market, they are often working very hard and getting
nowhere, and now they are not even getting by.
We ought not to delude ourselves that helping someone with
a serious psychiatric disability--or anyone with any kind of
disability, or educational disadvantage--to obtain an entry-
level, part-time job is enough. It is not. The economy of
prosperity in which we live does not provide enough
opportunities for the typical SSA disability beneficiary or
recipient to make progress: people do not move readily from
part-time to full-time employment, because the jobs are not
there for them. People do not move from jobs with few benefits
to jobs with full benefits because employer based health care
systems are seeking to diminish rather than expand employee
benefits, particularly in the secondary labor market. People do
not move from minimal responsibilities to major assignments
because they lack the educational qualifications to do so.
We have to begin to think about longer term programs that
help people to move into the economic mainstream, and this
means that we have to think in terms of more substantial
investments in SSA beneficiaries and recipients. My research
doesn't allow me to presume that I can readily suggest the
public policy alternatives that address the problem of
desperate poverty among people with serious disabilities, but
stronger economic support for people with the most severe and
medically demanding disabilities, rehabilitation programs that
provide people with access to a job with a living wage, and a
stronger support for educational programs, certainly would seem
to move us in the right direction.
But, it is clearly a failure of public policy to pretend
that simply getting off the SSA rolls or extending medical
insurance eligibility is enough to escape poverty. It's just
not so. I was struck in the course of these interviews by how
many women talked about wanting a decent home of their own and
how many men talked about their longing to own a car. These are
not overly-elaborate delusions or self-indulgent ambitions for
Americans at the beginning of this new century, but they are,
at present, completely beyond the grasp of most people with
serious mental illness. This should not be so. Thank you.
Chairman Shaw. Thank you, Mr. Baron. Dr. Burkhauser.
STATEMENT OF RICHARD V. BURKHAUSER, PH.D., SARAH GIBSON
BLANDING PROFESSOR OF POLICY ANALYSIS, AND CHAIR, DEPARTMENT OF
POLICY ANALYSIS AND MANAGEMENT, CORNELL UNIVERSITY, ITHACA, NEW
YORK
Mr. Burkhauser. Thank you. My name is Richard Burkhauser.
Before I became a university professor, I taught every grade
from kindergarten through high school and that experience has
made me a show and tell speaker. So I would like to confine my
remarks to three tables that are at the end of my written
statement and are samples of the cross national research that I
have done on disability programs over the last couple of years.
Table one looks at disability transfer recipients per
thousand workers by age in the four countries that the GAO
report talked about. There are some similarities in the four
countries: the United States, the Netherlands, Sweden and
Germany. That is, the ratio of people on the disability
transfer rolls rises with age in all four countries. That is to
be expected because the onset of a disability is much higher at
older ages. But there are also tremendous differences in these
ratios across countries and across time that clearly can't be
driven by differences in underlying health conditions. My
research suggests that there differences are really driven by
policy decisions, decisions that you, Mr. Shaw, and others in
Congress must make as leaders of our country.
In the Netherlands the transfer recipient rates increase
from 55 per 1000 to 138 per 1000 in the seventies, a 151%
increase in beneficiaries. In the eighties this enormous growth
slowed down in the Netherlands and in the other countries in
Table 1. However but it wasn't until the nineties that the
Dutch made a concerted effort to contain their program growth.
Consequently, the ratio of people on the rolls per 1000 workers
between 1990 and 1998 actually fell by 10% in the Netherlands.
How did this happen? Benefit levels were cut and a legal
basis for disentangling the risks of disability and employment
were introduced. In 1993 periodic reviews of those on the
disability rolls were made part of the system. All
beneficiaries younger than age 45 received elegability reviews
based on these new standards. In contrast, the United States
had the highest growth in their disability rolls in the
nineties, a 63% increase, and most disturbing there was an 87%
increase in the ratio of younger workers on the rolls.
We have long known that disability programs serve as an
early retirement program for folks with disabilities who would
like to get out of the labor force but are too young for early
Social Security benefits. Table two shows how dramatic the
differences are in the way the Netherlands and the United
States provide benefits to such workers. If you look at the
employment rate of men aged 51, 52 and 53 in the United States
and the Netherlands they are about the same in the two
countries. Labor force participation rates then fall gradually
in the United States to about 67% by age 60.
In contrast, the Dutch go from 82% at age 53 to 21% at age
60. Fully 33% of men in the Netherlands receive disability
transfers at age 60. This suggests that if there is a will,
there is a way to put as many people on the disability rolls as
policymakers desire and the Dutch have succeeded in
demonstrating this point. You might argue that this is
appropriate social policy for older people. However, it is not
so clear that it is appropriate social policy for younger
people.
Table 3 looks at the United States employment rates of men
and women with and without disabilities and their median
household incomes between 1982 and 1998. What it shows is that
business cycles affect all of us in about the same way. Growth
is good for everyone. Recessions are bad for everyone. If you
look at employment rates from 1982 to 1989, which is the growth
period of the Reagan boom of the 1980s, you will see that
employment of both those with and without disabilities
increased between 1982 and 1989 as did their median household
income.
We had a recession between 1989 and 1993 in which
employment fell and median household income fell for both
groups. Now here is the most serious news about what is going
on in the 1990s in the United States for folks with
disabilities. After 1993, we have had stupendous economic
growth in this country which has led to increases in employment
for men and women without disabilities, and has led to
substantial increases in their real median household income.
In contrast, the employment rates of men and women with
disabilities are actually lower in 1998 than they were in 1993,
the employment trough of the last business cycle. Real
employment of men with disabilities has fallen about 25% since
the last business cycle peak of 1989. (For women it is about
24%.) Median household income of men with disabilities has
fallen by about 5%. What is going on? In my view, there has
been a major shift from work to the disability rolls, both
Disabilities Insurance and Supplemental Security Income, by
folks with disabilities in the 1990s.
Let me conclude by saying that the lesson of the
Netherlands is that the disability transfer population can be
quite large if disability transfer rolls are used as an
alternative to long-term unemployment or welfare programs. But
the experience of Germany and Sweden suggests that these rolls
can be kept within socially acceptable limits, if a work force
strategy of accommodation, rehabilitation, and integration of
people with disabilities in the labor market is implemented.
The recently implemented Ticket to Work Act is certainly a
step in the right direction but future legislation is likely to
be needed to shift United States disability policy toward more
work-orientated outcomes. Thank you.
[The prepared statement and attachment follow:]
STATEMENT OF RICHARD V. BURKHAUSER, PH.D., SARAH GIBSON BLANDING
PROFESSOR OF POLICY ANALYSIS, AND CHAIR, DEPARTMENT OF POLICY ANALYSIS
AND MANAGEMENT, CORNELL UNIVERSITY, ITHACA, NEW YORK
Lessons from European Disability Policy Experience
Work in the marketplace is the principal source of income
in modern industrial societies, and ameliorating economic risks
associated with exits from the labor force due to health
problems or ``old age'' is a fundamental goal of all modern
social welfare systems. Yet the mix of private and public
insurance against such risks varies greatly across countries,
and the resulting structure of retirement and disability
programs and the signals they send with respect to how and when
to leave the labor market are more likely to explain the
dramatic differences in across country disability rolls and in
employment at older ages than differences in underlying health
conditions in those countries.
International evidence suggests that public policies are
the most important factor in determining the relative size of
the disability-transfer population. Over time, countries have
used different eligibility criteria to define this protected
population and different processes to implement this
protection. Table 1 shows that the percentage of the working
age population receiving disability transfers in the United
States, The Netherlands, Sweden, and the western states of
Germany varies across age groups and over time. As would be
expected, since the prevalence of health-related impairments
increase with age, disability transfers among working age
people increase at older ages in all four countries. Past that
similarity, dramatic differences are observed across countries
and within each country over time.
No country demonstrates the power of policy to affect the
rate of growth in the disability-transfer population better
than The Netherlands. No one would suggest that the underlying
health of the Dutch working age population has deteriorated at
a more rapid pace than that of the other countries in Table 1.
Yet the growth in the prevalence of the Dutch working age
population receiving disability transfers in the 1970s far
exceeded those of other countries. Policy changes in the 1980s
slowed that growth, and dramatic policy changes in the 1990s
have turned it around. Benefit levels were cut and a legal
basis for disentangling the risks of disability and
unemployment were introduced. But real changes in the rolls
only began in 1993 when eligibility standards and the process
for continuing benefits were dramatically tightened. In 1993,
periodic review of those on the disability rolls was made a
part of the system. All beneficiaries younger than age 45 were
reviewed based on the new standards.
As can be seen in Table 1, as a result of these reforms and
others, the prevalence of disability transfer recipients per
1000 workers fell by 10 percent between 1990 and 1998. While
the ratio of disability transfer recipients to workers in 1998
is still higher in The Netherlands than in the other countries,
it is the United States which experienced the greatest growth
in its disability rolls among the four countries in Table 1 in
the 1990s. Most ominously, the fastest growth in the United
States disability transfer rolls was among younger persons aged
15 to 44.
It has long been recognized that disability transfer
programs act as a form of early retirement for older workers
with some level of disability. Hence transfer payments rather
than rehabilitation or integration into the workforce via job
creation or quotas, have dominated policy in all four countries
for this older age group. Table 2 compares the age specific
employment rates of men aged 51 through 61 in The Netherlands
and the United States in 1992 and shows how disability
transfers and private employer pensions are used as a bridge to
the earliest social security retirement age in these two
countries.
But the rapid increase in the disability rolls among
younger workers is a much more controversial policy outcome and
one that has already pushed the United States ahead of Sweden
and Germany in the prevalence of disability transfers in this
age group. The rapid increase in the SSI-children program
population in the early 1990s is a major example of the
increased use disability based transfers to provide a minimum
income level to younger persons. In contrast, both Swedish and
German policies are much more focused on integrating younger
workers with disabilities into the labor market than is United
States disability policy.
One possible consequence of the relaxation of eligibility
standards for SSI-disability and SSDI benefits in the late
1980s in the United States is that while the disability
transfer rates have been rapidly rising, the employment rates
of men and women with disabilities in the United States have
been falling. As Table 3 reports, not only did the employment
rates of men and women with disabilities fall as the country
moved from a business cycle peak in 1989 to a business cycle
trough in 1992 but they continued to decline thereafter despite
six consecutive years of economic growth.
The lesson of The Netherlands suggests that the size of the
disability transfer population can be quite high if disability
transfer rolls are used as an alternative to long term
unemployment or welfare programs. But experience in Germany and
Sweden suggests that these rolls can be kept within socially
acceptable limits if a ``work first'' strategy of
rehabilitation and integration of people with disabilities into
the labor market is implemented. The recently implemented
Ticket to Work/Work Incentives Improvement Act is certainly a
step in the right direction, but future legislation is likely
to be needed to shift United States disability policy toward
more work orientated outcomes.
References
Aarts, Leo J.M., Richard V. Burkhauser, and Philip R. de
Jong (eds.). Curing the Dutch Disease: An International
Perspective on Disability Policy Reform. Aldershot, Great
Britain: Avebury, Ashgate Publishing Ltd. (1996).
Burkhauser, Richard V., Mary C. Daly and Andrew J.
Houtenville. ``How Working Age People with Disabilities Fared
Over the 1980s and 1990s Business Cycle.'' Cornell University
Working Paper. (2000).
Burkhauser, Richard V., Debra Dwyer, Maarten Lindeboom,
Jules Theeuwes, and Isolde Woittiez. ``Health, Work, and
Economic Well-Being of Older Workers, Aged 51 to 61: A Cross-
National Comparison Using the United States HRS and The
Netherlands CERRA Data Sets.'' In James Smith and Robert Willis
(eds.), Wealth, Work, and Health: Innovations in Measurement in
the Social Sciences. Ann Arbor, MI: University of Michigan
Press, (1999), pp. 233-265.
Table 1.--Disability Transfer Recipients Per Thousand Workers by Age in Four OECD Countries, 1970 to 1998
--------------------------------------------------------------------------------------------------------------------------------------------------------
Growth Growth Growth
Change 1970- Change 1980- Change 1990-
Age 1970 1975 1980 1980 1985 1990 1990 1995 1998 a 1998
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aged 15 to 64 Years
United States................................... 27 42 41 52 41 43 5 64 70 63
The Netherlands................................. 55 84 138 151 142 152 10 142 137 -10
Sweden.......................................... 49 67 68 39 74 78 15 106 27
Germany......................................... 51 54 59 16 72 55 -7 57 60 9
Aged 15 to 44
United States................................... 11 17 16 45 20 23 44 39 43 87
The Netherlands................................. 17 32 57 235 58 62 9 57 59 -5
Sweden.......................................... 18 20 19 6 20 21 11 32 34 62
Germany......................................... 7 6 7 0 8 5 -29 6 8 60
Aged 45 to 59
United States................................... 33 68 83 151 71 72 -13 103 104 44
The Netherlands................................. 113 179 294 160 305 339 15 271 241 -29
Sweden.......................................... 66 95 99 50 108 116 17 151 145 25
Germany......................................... 75 64 84 12 103 75 -11 87 81 8
Aged 60 to 64
United States................................... 154 265 285 85 254 250 -12 314 329 32
The Netherlands................................. 299 437 1,033 245 1,283 1,987 92 1,872 2025 2
Sweden.......................................... 229 382 382 67 512 577 51 716 709 23
Germany......................................... 419 688 1,348 222 1,291 1,109 -18 1,347 1,020 -8
--------------------------------------------------------------------------------------------------------------------------------------------------------
(a) U.S. data are from 1997.
Source: Derived and updated from Aarts, Burkhauser, and De Jong (1996), Table 1.1.
Table 2.--Prevalence of Work and Transfer Benefits for Men by Age in The Netherlands and in the United States
--------------------------------------------------------------------------------------------------------------------------------------------------------
United States The Netherlands
-------------------------------------------------------------------------------------------------------
Age Not Working Not Working
Working a Disability Employer Other d Working a Disability Employer Other d
Transfers b Pension c Transfers b Pension c
--------------------------------------------------------------------------------------------------------------------------------------------------------
51.............................................. 82.6 4.1 0.9 12.4 83.3 13.7 0.0 3.0
52.............................................. 84.9 3.0 2.4 9.9 87.5 8.1 1.9 2.5
53.............................................. 82.8 3.5 0.5 13.2 81.9 14.1 1.7 2.3
54.............................................. 84.6 2.9 2.7 9.8 74.6 17.2 1.9 6.2
55.............................................. 78.5 4.5 1.8 15.3 72.2 16.7 3.5 7.5
56.............................................. 76.9 5.0 6.3 11.8 59.0 23.9 10.2 6.8
57.............................................. 80.3 4.6 7.0 8.0 58.7 17.4 15.6 8.3
58.............................................. 71.5 7.5 9.2 12.0 49.0 25.0 19.0 7.0
59.............................................. 68.9 6.5 9.3 15.3 44.1 23.2 27.5 5.2
60.............................................. 67.9 6.1 12.6 13.3 20.9 33.3 42.3 3.5
61.............................................. 65.9 5.6 16.0 12.5 16.8 26.9 50.5 5.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
a Those who are working at the time of the interviewC1993 in The Netherlands and 1992 in the United States.
b Those who are not working and are receiving disability transfers at the time of the interview.
c Those who are not working or receiving disability transfers but who are receiving private pension benefits at the time of interview.
d Those who are not working and receiving neither disability transfers nor private pension benefits at the time of interview.
Source: Burkhauser, Richard V., Debra Dwyer, Maarten Lindeboom, Jules Theeuwes, and Isolde Woittiez.(1999) Data from The Netherlands are weighted values
of the 1993 Wave 1 CERRA Household Survey. Data from the United States are weighted values of the 1992 Wave 1 Gamma Release of the Health and
Retirement Survey.
Table 3.--Employment Rates and Median Household Size-Adjusted
Income of Civilian Aged 25 through 61 by Gender and Disability
Status in 1982, 1989, 1992, and 1998a
--------------------------------------------------------------------------------------------------------------------------------------------------------
Employment Rate c Percentage Changed
Groups b ------------------------------------------------------------------------------------------
1982 1989 1993 1998 1982-89 1993-98 1989-98
--------------------------------------------------------------------------------------------------------------------------------------------------------
Men without Disability....................................... 95.1 96.1 94.5 95.1 1.0 0.6 -1.0
Men with Disability.......................................... 41.7 44.0 37.2 34.4 5.4 -7.8 -24.5
Women without Disability..................................... 69.3 77.0 78.3 80.8 10.5 3.1 4.8
Women with Disability........................................ 29.3 37.5 33.4 29.5 24.6 -12.4 -23.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Median Income e Percentage Change d
Groups b ------------------------------------------------------------------------------------------
1982 1989 1993 1998 1982-89 1993-98 1989-98
--------------------------------------------------------------------------------------------------------------------------------------------------------
Men without Disability....................................... 27,399 31,888 30,076 33,486 15.1 10.7 4.9
Men with Disability.......................................... 13,948 16,477 14,490 15,717 16.6 8.1 -4.7
Women without Disability..................................... 24,486 28,841 27,512 30,384 16.3 9.9 5.2
Women with Disability........................................ 13,200 14,789 13,061 14,173 11.4 8.2 -4.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Burkhauser, Daly and Houtenville (2000) calculations based on the March Current Population Survey, 1981-1999.
a Those less than age 25 or more than age 61 or in the Armed Force are excluded. In our study, persons are considered to have a disability if they
report having a health problem or disability, which prevents them from working or limits the kind or amount of work they can do.
b Disability status is for year following income year. Beginning in survey year 1994, computer assisted interviews were used which slightly modified the
question we use to define disability.
c Includes as employed only those who work 52 hours or more in a given year and have positive earnings.
d When calculating percentage change, we use the average of the two years as the base.
e All dollar amounts are in 1998 dollars. Income is household size-adjusted by dividing income by the square root of household size. Negative sources of
income were converted to zero. In addition, the bottom and top 5 percent of the household size-adjusted income distribution are excluded from the
analysis.
Richard Burkhauser, Ph.D.
Department of Policy Analysis and Management, Cornell University
The experiences of other countries can shed some light on
the search for appropriate Social Security Disability Insurance
(SSDI) and Social Security Income (SSI) program eligibility
criteria for people with disabilities. This discussion focuses
primarily on experiences with disability-transfer programs in
four countries--the Netherlands, Germany, Sweden, and the
United States (Aarts et al., forthcoming).
Before recommending dramatic changes in our current SSDI
and SSI eligibility criteria, one has to ask several questions.
Is the current system sufficiently in trouble to warrant such
changes? If so, what is the evidence of the failure of the
current system to achieve its objectives, and what criteria
were used to determine the size of this failure? Without
answers to these questions, it is difficult to either put a new
system into place or to determine whether or not the new system
is superior to the current system.
International evidence suggests that public policies are
the most important factors in determining the relative size of
the disability-transfer population. Over time, countries have
used different eligibility criteria to define their protected
population and different processes to implement this
protection. Described below are some of the differences across
countries and over time in these criteria and processes as well
as an overview of the tradeoffs that should be considered in
establishing them.
Table 5-1 shows that the working age population receiving
disability transfers in the Netherlands, Germany, Sweden, and
the United States varies across age groups and over time. As
would be expected, since the prevalence of health-related
impairments increases with age, disability transfers among
working age people increases at older ages in all four
countries. Past that similarity, dramatic differences are
observed across countries and within each country over time.
Table 5.1 Disability Transfer Recipients per Thousand Workers by Age, in Four OECD Countries, 1970 to 1995
--------------------------------------------------------------------------------------------------------------------------------------------------------
Growth Growth Growth
Change 1970- Change 1980- Change 1990-
Age 1970 1975 1980 1980 1985 1990 1990 1995 1995
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Aged 15 to 64 Years
United States................................... 27 42 41 52 41 43 5 64 49
The Netherlands................................. 55 84 138 151 142 152 10 142 -7
Sweden.......................................... 49 67 68 39 74 78 15 106 36
Germanya........................................ 51 54 59 16 72 55 -7 47 -15
Aged 15 to 44
United States................................... 11 17 16 45 20 23 44 39 70
The Netherlands................................. 17 32 57 235 58 62 9 57 -8
Sweden.......................................... 18 20 19 6 20 21 11 32 52
Germany......................................... 7 6 7 0 8 5 -29 6 8
Aged 45 to 59
United States................................... 33 68 83 151 71 72 -13 103 43
The Netherlands................................. 113 179 294 160 305 339 15 271 -20
Sweden.......................................... 66 95 99 50 108 116 17 151 30
Germanya........................................ 75 64 84 12 103 75 -11 87 16
Aged 60 to 64
United States................................... 154 265 285 85 254 250 -12 314 26
The Netherlands................................. 299 437 1,033 245 1,283 1,987 92 1,872 -6
Sweden.......................................... 229 382 382 67 512 577 51 716 24
Germanya........................................ 419 s 688 1,348 222 1,291 1,109 -18 890 -20
--------------------------------------------------------------------------------------------------------------------------------------------------------
a German data refer to the population in the states in the former Federal Republic of Germany.
Source: Derived and updated from Aarts, Burkhauser, and de Jong (1996), Table 1.1.
[GRAPHIC] [TIFF OMITTED] T8103.002
FIGURE 5-1.--Targeting social policies on the working age
population with disabilities. SOURCE: Burkhauser, 1997.
Reprinted with permission of Dr. Richard V. Burkhauser, Cornell
University.
Those differences have more to do with the policies that
govern the disability eligibility determination process than
with changes in the underlying health and disability patterns
of those populations.
The preponderance of evidence to date suggests that overall
health in each of these countries, measured either by morbidity
or mortality scales, has improved significantly over the last
25 years. Yet the number of people on disability-transfer
programs relative to the working population has increased in
all four countries.
No country demonstrates the power of policy changes to
affect the rate of growth in the disability-transfer population
better than the Netherlands. No one would suggest that the
underlying health of the Dutch working age population has
deteriorated at a more rapid pace than that of the other
countries in Table 5-1. Yet the growth in the prevalence of the
Dutch working age population receiving disability transfers in
the 1970s far exceeded that of the other countries. Policy
changes in the 1980s slowed this growth, and dramatic policy
changes in the early 1990s have turned it around. (See Aarts et
al. [forthcoming], for a fuller discussion.)
The dramatic differences in disability-transfer populations
seen in Table 5-1 can be explained using Figure 5-1. Circle A
represents the entire working age population with disabilities,
using the Americans with Disabilities Act of 1990 (ADA)
definition, namely, working age people who have a physical or
mental impairment that substantially limits one or more major
life activities, or a record of such impairments, or who are
regarded as having such impairments. This definition is more
all-encompassing than that of Nagi or the World Health
Organization, since it includes people who have limitations,
but may or may not be failing in some socially expected role.
Previous studies applying this broader definition to the United
States have found that from 8 to 12 percent of the total
working age population would be included in the population with
disabilities depending on the data set and questions used
(Bound and Burkhauser, forthcoming).
When the ADA definition is applied across countries or over
time in the same country, the size of the overall population in
circle A does not dramatically change. However, two subsets
within this population, circle B--the eligible disability-
transfer population--and circle C--the actual disability-
transfer population--will change dramatically.
Circle A is more or less invariant to policy decisions. It
is a function of demographic characteristics, such as age and
gender. But it is also affected by the quantity and quality of
medical care, the wealth of the country, and the education of
the population with regard to their personal health. In the
long run, circle A can increase or decrease as a result of
medical innovations. It decreased when polio was eradicated and
will do so again if a cure is found for AIDS. But circle A can
also increase. If medical innovations prolong life but do not
offset ensuing impairments and functional limitations, then
circle A would increase, as, for instance, it did in the case
of advancements in medical care for severe spinal cord
injuries.
By contrast, the size of the population in circle B has
historically been a reflection of public policy in all four
countries in Table 5-1. Eligibility rules vary across the
countries. Only in the United States is eligibility limited to
those who are totally disabled. In the other three countries,
eligibility is offered to those who are partially disabled. The
criteria for failure to perform work are also important in
determining the size of the circle B population. In the United
States, the definition is strict and relates to any substantial
gainful employment, while Sweden and Germany use a commensurate
work definition. That is, if the impairment prohibits a person
from doing the kind of work the person has been doing in the
past, this is sufficient to become eligible for disability-
transfer benefits. In 1993, in an effort to reduce system
growth, the Netherlands abandoned its definition of
commensurate work and adopted a ``substantial gainful
employment'' criterion like the one used in the United States.
This change in eligibility criteria is one of the reasons for
the reduction in the relative size of the disability-transfer
population in the Netherlands in the 1990s seen in Table 5-1.
A major distinction between the United States disability-
transfer program and that of other countries in Table 5-1 is
the availability of immediate benefits. The United States has a
five-month waiting period and no universal short-term
disability program, although many individual employers have
short-term disability benefits programs. Sweden, Germany, and
the Netherlands all have sickness benefits that can continue
for several years. Since 1993, however, the Netherlands has
required employers to pay for the first six weeks of sickness
benefit. When that policy was imposed, the proportion of
workers receiving sickness benefits declined.
Labor market considerations affect the size of the eligible
population. Prior to 1987, the Netherlands had an elaborate
procedure to measure earning capacity in which officials looked
at the characteristics of a person's past jobs. They tried to
link the characteristics of these jobs to their measure of the
person's impairments. They also had a very intricate six-
category system of partial disability, starting at the 15
percent disability level. However, if a person was declared to
be partially disabled, even if only at the 15 percent level,
but was not currently employed, the person received a full
disability benefit unless the government could show otherwise.
Hence while the Netherlands had an elaborate system of trying
to assign a share of disability to each individual, the
overriding importance of labor market considerations
effectively meant that very few people actually got partial
benefits.
Circle C represents the population currently receiving
disability benefits. The size of the circle C population
depends on application decisions by the potentially eligible as
well as on acceptance decisions by program gatekeepers.
Applications are sensitive to general economic conditions. They
rise in bad economic periods and fall when the economy
improves. For individuals, the size of their benefits and their
ease of access to them relative to other alternatives is an
important factor in their decision to apply. In disability
systems that emphasize work through rehabilitation and quotas,
such as in Germany and Sweden, even though disability-transfer
benefits are relatively generous, transfer rolls remain
relatively low because many in the transfer-eligible population
work.
The relative size of disability-transfer benefits compared
to those offered by other government programs also makes a
difference. For instance, transfer benefits in the German
disability system are not much different from the benefits
offered by other German transfer programs. By contrast,
relatively easy access and high benefits relative to other
transfer programs in the Netherlands and in the United States
have meant that during the trough period of the business cycle,
much greater pressure is put on their disability-transfer
programs.
Circle B and C populations do not necessarily have to
coincide. Some in circle B work and therefore do not apply for
benefits, while others in circle B do not know they are
eligible and therefore do not apply. Finally, some in circle B
have applied for benefits and are eligible, but they are
mistakenly denied benefits. This is known as type-2 error.
Circle C is not a subset of circle B, because some of the
circle C population are awarded benefits even though they are
not truly eligible. This is Type-1 error. These people are
currently unemployed and have disabilities, but they are
capable of substantial gainful employment and hence do not
actually meet circle B eligibility criteria.
Policy choices make a difference in the size of the two
circles and in the degree that they coincide. In its effort to
redesign the disability decision process, SSA must decide what
it is trying to achieve--for example, reduce the size of circle
C, insure that circle B and circle C coincide, insure that
circle C is a subset of circle B, minimize Type-1 error, or
minimize Type-2 error. If SSA is interested in reducing errors,
which is more important--reducing false eligibility or false
ineligibility? The discussion at this meeting suggests that we
are primarily focusing on reducing Type-1 error. But in making
judgments about what we are trying to achieve, it is important
to think about the social costs of both types of error when
discussing the tradeoffs between added administrative costs and
the reduction of such errors.
One important criterion that could be used in any
evaluation of a redesigned system is its ability to reduce the
uncertainty of outcomes on the part of all parties involved. Ex
ante the system should provide better information about the
likely outcome for people with disabilities who are required to
make the difficult choice of if and when to apply for benefits.
Half of the people with disabilities who have gone through
this process and have been denied benefits never work again.
There are two reasons why they never work again: (1) the system
mistakenly denied them benefits, and (2) the scarring effect of
the system itself. If a person invests in trying to get on the
program, the rational way to do so is to do everything possible
to diminish the possibilities of being judged capable of
performing any substantial gainful activity. A person with
disabilities planning to apply for benefits has to be
unemployed for six months prior to application and during the
determination process. Obviously, people out of the workforce
for two years are much less likely to get back into the labor
force, regardless of their initial condition, than those who
try to get back to work before applying for benefits.
Therefore, it is possible that a more complex method of
reducing errors could lead to worse outcomes, if that system
increased the uncertainty of the final outcome to the
applicant. Rather than searching for a system that reduces
errors based on some gold standard, which in the end will be to
some degree arbitrary, a redesigned system should reduce the
uncertainty of the process and hence the social costs
associated with the disruptions in the lives of people with
disabilities.
Chairman Shaw. Thank you. Mr. Mohney. Watch your cord
there.
STATEMENT OF RALPH MOHNEY, SENIOR VICE PRESIDENT, CUSTOMER CARE
CENTER, UNUMPROVIDENT CORPORATION, PORTLAND, MAINE
Mr. Mohney. Thank you, Mr. Chairman, Members of the
Committee. My name is Ralph Mohney and I am Senior Vice
President for the Customer Care Organization of UnumProvident
Corp. I appreciate this opportunity to testify about
UnumProvident's roll as the world's leading provider of
disability insurance. First, however, I would like to commend
this Congress for passing the return-to-work legislation that
was enacted last year.
Your efforts eliminated two significant return-to-work
barriers by continuing government health insurance and by
setting up trial return to work opportunities. My comments will
focus on how to build upon this landmark legislation.
UnumProvident is a publicly traded insurance holding company.
We provide insurance solutions to a wide clientele ranging from
individuals to small employers to several of the nation's
largest industrial companies and internationally in Japan,
Europe and Canada. We are the world's leading provider of
disability insurance.
UnumProvident's disability claim organization, which we
call Customer Care, provides critical support for very diverse
customers. The organization fulfills this traditional roll of
thoroughly, fairly, and objectively evaluating claims, paying
legitimate claims promptly and with a high level of service,
and defending against those few claims that are not legitimate.
But our claim management employees then go beyond the
traditional role to proactively assist insureds in their
return-to-work efforts.
This involves providing specialized resources when
appropriate to help each individual regain the ability to earn
an income and become self-sufficient once again. The
UnumProvident claim management model is driven by four
important elements, triage, early intervention, impairment-
based claim management, and face-to-face interaction provided
by our GENEX subsidiary. Nearly half of our new long-term
disability claimants are able to return to work within 6 months
of receiving benefits.
For our claimants who are also receiving Social Security
benefits, we experience a recovery rate that is roughly six
times the reported Social Security recovery rate. As stated in
the Ticket to Work legislation, one-half of 1% improvement in
Social Security disability recovery rates would yield $3.5
billion of savings for the program. Social Security can improve
its experience if the logical next steps of last year's
legislation are adopted.
I recommend that this Subcommittee explore the following
four key areas based on our experience in the private sector.
The first area is triage. Over one million new claims are
received for Social Security disability payments each year. The
conditions of these individuals range widely from situations
involving permanent and total disability to shorter term
disability where recovery can be expected. An appropriate
triage system applying the right resource to the right claim at
the right time will enhance return-to-work effectiveness and
insure appropriate use of resources.
The second area is early intervention. For claimants with
recovery potential early and ongoing clinical intervention is
essential to return-to-work success. We have found that face-
to-face personal attention, particularly our expert GENEX
resources, are invaluable in terms of evaluating
appropriateness of care. The third area is continual claim
management. Social Security policy should go beyond simply
determining initial eligibility and focus more on the ongoing
eligibility for benefits and more continual review of claims.
Again, we return 50% of long-term disability claimants to
work within the first year. Ongoing management is essential for
this success and it is important to integrate medical advances
into the continual review process. The fourth area is adaptable
benefits and incentives. Recovering from disability really is
an incremental process and adaptable benefits are essential to
address the stages of disability. Features such as transitional
work funding and partial payments, as well as assistance
through vocational training.
In addition, legislation could provide more incentives for
employers who return employees to work. These recommendations
will create financial value for the individuals and for the
Social Security program. While there will be initial cost, the
long-term savings will prove significant. In conclusion, let me
say that there is dignity associated with a person's ability to
work and great value in the ability to live a full and
independent lifestyle. This philosophy and its focus on
abilities is behind all of the customer care resources of
UnumProvident. Thank you once again for allowing me this
opportunity.
[The prepared statement follows:]
Statement of Ralph Mohney, Senior Vice President, Customer Care Center,
UnumProvident Corporation, Portland, Maine
My name is Ralph Mohney, and I am the Senior Vice President
for the Customer Care organization of UnumProvident Corporation
(UnumProvident). I appreciate this opportunity to share our
corporate best practices through testimony about
UnumProvident's role as the world's leading provider of
disability insurance.
First, however, I would like to commend this Congress for
passing the return-to-work legislation that was enacted last
year. Your efforts eliminated two significant return-to-work
barriers by continuing government health insurance and by
setting up opportunities for trial return to work without
forfeiting Social Security disability benefits if the process
is not successful. My comments will focus on how to build upon
this landmark legislation.
Corporate Background and Philosophy
UnumProvident is a publicly traded insurance holding
company formed by the merger of Unum Corporation of Portland,
Maine, and Provident Companies, Inc., of Chattanooga, Tenn.
UnumProvident has major centers of operation in
Chattanooga, TN; Portland, ME; Columbia, SC; and Worcester, MA.
Our international presence includes disability operations in
the United Kingdom, Canada and Japan. In addition, the company
utilizes the resources of its subsidiaries, GENEX and OCI,
headquartered in Pennsylvania and Wyoming respectively. The
single largest functional area within UnumProvident is our
unique Claims Management area, which we have named Customer
Care. It is an area of rapid growth--we recently held a ribbon-
cutting ceremony for a new claim management operation in
Glendale, CA to serve the West Coast market.
UnumProvident provides insurance solutions to a wide
clientele, ranging from individuals through small employers to
several of the nation's largest industrial companies.
UnumProvident reported total revenue of $9.4 billion for the
twelve months ending March 31, 2000. The company holds the
following industry-leading positions:
Individual income protection #1
Long-term disability income protection #1
Short-term disability income protection #1
Group long-term care #1
We strive to deliver on our customer commitment through our
integrated product solutions, return-to-work expertise, and
responsive service. We are dedicated to our purpose,
``protecting everything you work for.''
Having built the premier leadership position in the
insurance industry's strongest growth markets, we are deploying
our people, technology, integrated product and service
offerings, and multiple channel network to deliver the value
the marketplace demands. UnumProvident serves many customers.
For this discussion, I will focus on the group long-term
disability insurance solutions we provide to employers to
assist their employees during times of disability.
Meeting Customer Needs
UnumProvident is in the business of protecting our
customers' income. Disability insurance is not a mandated form
of financial protection. It is a choice. Therefore, we are
committed to educating consumers about the value of disability
insurance as an essential and necessary form of financial
protection. The statistics clearly support this need.
Approximately 54 million Americans (1 in 5) have a disability.
This represents 21 percent of the total population of the
United States.\1\ To place that in an employer perspective, in
1995, 120,000,000 workdays were lost because of work
injuries.\2\
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\1\ McNeil, J.M. (1997) Americans with Disabilities: 1994-95. U.S.
Bureau of the Census Current Population Report P70-61. Washington, DC:
U.S. Department of Commerce.
\2\ National Safety Council, Accident Facts, 1996 Edition.
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We recognize that disability affects all walks of life, and
our comprehensive and affordable income protection portfolio
addresses this spectrum. Our company seeks opportunities to
position our three leading product platforms--individual, group
and voluntary benefits--to appropriately cover the continuum of
life needs that are experienced by our customers.
UnumProvident's product strategy is designed to fit the
industries for which we write business. We recognize that
today's consumer marketplace has a multitude of different
needs, many of those being nontraditional. For example, we do
not automatically exclude high-risk industries such as trucking
or high-rise construction from insurance coverage; if otherwise
eligible, they have the option to purchase catastrophic
disability coverage. For customers who have suffered disability
and wish to reenter the workforce in a self-employed fashion,
we offer financial support they can use to start their own
business. UnumProvident also participates in the important long
term care market, leading the industry in providing group long
term care. Our product pays benefits for the loss of two or
more ``Activities of Daily Living'' or severe cognitive
impairment. A simplified indemnity model pays the full monthly
benefit amount selected, regardless of the actual expenses
incurred.
Through special risk coverages such as these, UnumProvident
is able to help answer non-traditional financial needs through
creative solutions.
Customer Care Background
UnumProvident's disability claims organization provides
critical support for these diverse customer needs. The
organization fulfills the traditional role of thoroughly,
fairly and objectively evaluating claims, paying legitimate
claims promptly and with a high level of service, and defending
against those few claims that are not legitimate. Our claim
management employees then go beyond the traditional role to
proactively assist insureds in their return-to-work efforts.
This involves providing specialized resources when appropriate
to help each individual regain the ability to earn an income
and become self-sufficient once again.
UnumProvident terms its claims management organization the
Customer Care Center. This name was chosen because it truly
reflects the department's mission--serving customers,
protecting them against loss of income, and caring enough about
our customers to assist them in return-to-work efforts when
disability strikes. We believe that our success lies not just
in how we manage claims, but in the policies and procedures
that form the basis of our organization. Through appropriate
contracts and service, we ensure that our customers are
receiving the benefits for which they have paid. In 2000, we
expect to manage more than 400,000 new disability claims across
our six Customer Care Centers in the United States.
The Claim Management Model
The response to our interpretation of marketplace needs has
been the creation of a Customer Care organization focused on
assuring that every income protection claim receives the most
effective early intervention and the most appropriate
management possible. The UnumProvident claim management model
is driven by these four important elements:
Triage: During triage, each claim is examined and the
appropriate resources are assigned to meet the specific claim
criteria. Claims are channeled to one of five different claim
management pathways, depending on the level of clinical and
other resources which would be appropriate for the claim.
Detailed evaluation occurs within five days of claim receipt.
Early intervention: An emphasis on early intervention
speeds recovery and return to work. For claims with clinical
issues, nurse case managers make contact with the attending
physician, employer and insured within 48 hours of claim
receipt. The purpose of this contact is to evaluate
appropriateness of care, to develop treatment plans geared
toward return to work, and to ensure that employers are willing
to make reasonable accommodations.
Duration-and impairment-based management: The state-of-the-
art initial triage process speeds claims to the most
appropriate care pathway. In addition to duration-based units,
our impairment-based specializations include cardiac,
orthopedic, psychiatric, and general medical claims. This
month, we will be staffing our newest impairment-based unit at
all sites--the cancer unit.
This approach is driven by teamwork and expertise. For
example, in the psychiatric unit, a claim is received and
evaluated by a consultant. After review, the consultant
channels the claim to the appropriate claim specialist based on
level of difficulty or complexity. The specialist builds a
claim action plan and brings the claim to a roundtable that
includes a psychiatrist or psychologist. The roundtable may
refer the claim to an addictionologist or neurologist, or may
seek external expert input. These experts will examine
appropriateness of care as well as expected duration of the
claim. Such teamwork allows us to place specific focus on the
impairment in a way that promotes knowledgeable service and
increased return-to-work potential.
GENEX: When more personal face-to-face interaction is
appropriate, field-based case managers and vocational
rehabilitation specialists with our GENEX subsidiary work
directly with the employer, employee, treating physician and
customer care specialist to ensure that medical care and
treatment are directed toward return-to-work goals.
UnumProvident has invested significantly in medical and
rehabilitative resources to support the claim management model.
They include:
Nearly 100 physicians and several hundred nurse case
managers and vocational rehabilitation counselors;
More than 700 nurse case managers and vocational
rehabilitation professionals within our GENEX subsidiary,
located in over 100 offices across North America; and
3,000 Customer Care Center employees organized around
specific durations and impairments.
The claim management model is an important factor in
UnumProvident's ultimate goal to offer a quality customer
experience. By building a strong level of expertise in each
duration-and impairment-based medical area, the company offers
improved specialization, individualized customer service, and
significantly improved return-to-work experience.
Nearly half of our new claimants are able to return to work
within six months of receiving benefits. For claimants who are
also receiving Social Security benefits, we experience a
recovery rate that is roughly six times the reported Social
Security recovery rate. As stated in the return-to-work Ticket
to Work legislation, a one-half of one-percent improvement in
Social Security disability recovery rates would yield $3.5
billion over the work life of such individuals. Social Security
can improve its experience if the logical next steps are
adopted to build on progress made by the legislation.
Return-to-Work Emphasis
UnumProvident understands that the best insurance against
unnecessary work disruption is the ability to return an
employee to a productive lifestyle in a timely fashion. Each
year, more than 750,000 Americans experience injuries or
illnesses that keep them out of work for five months or
longer.\3\ For the employer, this may mean absorbing extensive
and unnecessary lost time costs. Employee replacement and
retraining costs become an additional, unexpected expense.
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\3\ Annual Review of Disability Management, 1992, The Washington
Group/Health Institute for Rehabilitation and Disability Management.
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Some large and small employers have corporate health and
return-to-work practices and policies that are clear,
comprehensive and coordinated--actively inviting employees back
to work. Most employers, however, randomly tend to the work
disruption in their work force. They may provide unclear or
competing expectations about returning to work through their
organizational policies and practices.
The employers who demonstrate the greatest success in
controlling the impact of work disruption and lost time are
those who incorporate formal return-to-work strategies within
their employee relations activities and benefit plans. At
UnumProvident, our corporate Return to Work Dividend Program is
a consultative service offered to employers to structure
policies and procedures to achieve return-to-work success. The
program offers a unique blend of policy and staff development
opportunities through:
Return-to-work programs that assist employers in
defining the impact of lost time and creating practical return-
to-work strategies;
Integrated disability management that assists
organizations in determining its readiness and capacity to
integrate the wide range of its disability insurance, workers'
compensation, lost time and healthcare programs;
Absence management strategies to evaluate, select
and develop programs that manage FLMA, intermittent and casual
lost work days; and
Assistance that enhances the employer's capacity
to apply computer-based assistive technology.
Another important element of UnumProvident's return-to-work
commitment is an understanding of the science of disability.
The company is a leading proponent of disability research, with
groundbreaking work based on the realization that disability
management goes far beyond simply verifying and paying claims.
We continually make investments in understanding both the
scientific and human aspects of disability at every stage of
life so we can offer more than just a benefit check to our
customers.
A core part of this commitment to understanding disability
is the work done by our Disability Research Alliance. Current
initiatives include active physician education and employer
education programs. The Alliance is also partnering with the
Washington Business Group on Health and Watson Wyatt Worldwide
in the ``Progression of Disability'' study. This study,
conducted with Virginia Commonwealth University, addresses the
variables that occur in the progression from short-term
disability to long-term disability to Social Security benefits.
Visible Impact
I would like to illustrate the information I've shared with
you about our claim process and philosophy through several
return-to-work success stories. Increasingly, we are finding
that some claims thought to be long-term in nature actually
have the potential for recovery. These stories demonstrate the
impact that return-to-work support and medical advances can
have on claim results.
A 48-year old Virginia AIDS claimant who stopped
working in March 1996 saw his condition begin to improve in May
1999 as a result of new drug therapy. A UnumProvident
vocational rehabilitation counselor discovered in phone
discussions with the claimant that he was interested in
returning to work full-time. The outcome is shown in this
letter from the claimant to the counselor:
``It was very nice to talk to you on the phone
about the happy news of my new job. You were the first person
with whom I shared this good news. I am thankful to you for
your counseling and consultation. You gave me the inspiration
and courage to stand once again on my own feet. It was very
encouraging when you told me that I have the skills and
potential, that I just needed to polish my skills and my
resume. On a regular basis, you were in touch with me, asking
how I was doing. By your blessings, I finally achieved my
destination. I got a job in________International, Inc. Thank
you very much once again for the blessings, inspiration,
support and courage you gave me for the last nine months.''
Kevin Bibeau was involved in a car accident that
left him severely disabled. At the time of his accident, Kevin
knew very little about his employer-provided disability
insurance. He found that his UnumProvident coverage enabled him
to meet his living expenses and allowed him to go back to work
part-time and receive a continuous salary. UnumProvident then
collaborated with his employer, helping him return to his full-
time job as an engineer sooner than originally expected.
Kevin's experience with UnumProvident has caused him to
encourage others to consider the value of long-term disability
insurance. According to Kevin, ``Long-term disability insurance
is the best-kept secret. . . I don't think people believe
anything is going to happen to them that will cause them to go
on long-term disability. It's nice to know it exists and that
you have it just in case.''
A North Carolina claimant has been physically
disabled under our policy for 12 years and has been denied
benefits by Social Security three times. After 12 years out of
the workforce, she wants to move on with her life and find a
way to rejoin the workforce. UnumProvident is now working to
provide her a lump sum amount that will allow her to purchase a
small franchise business that will allow her to actively return
to work.
These stories demonstrate creative solutions, as well as
the honorable purpose and potential impact shared by all
providers of disability insurance.
The Millennium Workforce
Over the past 100 years, it is estimated that there have
been more than 250,000 pieces of state and federal legislation
defining and reforming the nature and scope of our response to
work place injury and illness. In spite of these efforts, the
fundamental nature of injury and illness in the work place
remains the same. To address the challenges at hand, we must
alter the basic concepts of disability.
As we move ahead and form a new understanding of
disability, research shows us several critical points about the
work force of the new millennium:
Impairment does not equal disability. Impairment is
objective. Disability is subjective and is created by the
benefit plan design. The plan determines how long someone stays
out of work, not how long they suffer from the impairment.
Ambiguity limits recovery and return to work. All too
often, the employer fails to define the expectations for an
individual to return to work. Clear corporate policies
supported by well-defined work prescriptions reduce the
incidence of lost time.
Corporate policies sometimes disable employees. Corporate
policies can be the greatest contributor to employee
disability. The most common disabling corporate policy is the
``100% or nothing'' threshold. This policy says that an
employer is willing to wait until the employee is cleared of
all impairment before coming back to work. In fact, the
employee will regain functional capacity incrementally.
In the case of Social Security, current policies encourage
individuals to argue they are fully disabled and can not return
to work. Otherwise, they are not eligible for benefits. In
convincing the system, they also convince themselves.
Physicians are not HR managers. Physicians are not prepared
as HR managers. They understand impairments but not the
occupation requirements of specific jobs. They need to be
trained to be able to define the conditions under which an
employee can resume a safe transition back to full work.
Disability cloaks performance problems. Some supervisors
use a disability program to solve job performance problems.
This is a very expensive practice and reflects an inadequate
human resource program.
Return-to-work best practices. Proven strategies that
reduce lost time and prevent extended disability are:
Create clear, consistent and early return-to-work
expectations;
Implement a formal planning process;
Provide formal supervisor training on the process;
and
Establish transitional return-to-work pathways
based on job demands and worker functional capacities.
These key points should serve as instruction for disability
insurers as they craft programs and implement solutions for the
marketplace.
Recommendations
Based on the experience and expertise of UnumProvident, I
would like to provide recommendations to the Subcommittee on
Social Security for consideration as the Subcommittee considers
challenges in the 21st century.
Let me reiterate, last year's Ticket to Work legislation
removed important return-to-work barriers that were
contributing to the historical less than one-half of one-
percent recovery rate of Social Security recipients. Now we
need to take the next steps and change the infrastructure to
facilitate return to work for Social Security disability
claimants. Also it will require that the concept of disability
be altered--disability does not mean inability, it means
experiencing and recovering from disability in stages.
I recommend that the Subcommittee explore the following
four key areas based on our experience in the private sector:
Triage: Approximately three million new claims are
received for Social Security disability payments each year. The
conditions of these individuals range widely from situations
involving permanent and total disability to shorter-term
disability where recovery can be expected. An appropriate
triage system applying the right resources to the right claim
at the right time will enhance return-to-work effectiveness and
ensure appropriate use of resources.
Early intervention: For claimants with recovery
potential, early and ongoing clinical intervention is essential
to return-to-work success. At UnumProvident, this intervention
takes the form of three-point contact with the attending
physician, claimant and employer. We have found that face-to-
face personal attention, specifically, our expert GENEX
resources are invaluable in terms of evaluating appropriateness
of care.
Continual claim management: It is recommended that
Social Security policies go beyond simply determining initial
eligibility to achieve more focus on ongoing eligibility for
benefits and more continual review of claims.
It is important to maximize the level of expertise applied
to claims, and to integrate medical advances into the continual
review process. The impairment-based model used by
UnumProvident has already resulted in a significant increase in
applied expertise and medical resources, therefore better
meeting the customer's needs. We feel this is the best way to
leverage and apply specialized care.
Adaptable benefits and incentives. UnumProvident's
plan designs include return-to-work features such as
transitional work funding and partial payments, as well as
assistance through vocational training. It is recommended that
Social Security continue to align its government assistance in
a similar manner to encourage return-to-work efforts.
Recovering from disability is an incremental process and these
types of adaptable benefits are essential to address the stages
of disability.
In addition, legislation could provide more economic
incentive for the employer to entice employees to return to
work. It would also prove helpful to quantify ratings
experience by industry to encourage employers to visualize how
disability can drive up costs. With ratings as reference,
employers will have more incentive to be actively involved in
the disability management process, as has been the case in
terms of worker's compensation management.
These recommendations will create financial value for the
individuals and for the Social Security program. While there
will be initial costs incurred, the long-term savings will
prove significant.
Conclusion
There is dignity associated with a person's ability to work
and great value in the ability to live a full and independent
lifestyle. This philosophy--and its focus on abilities--is
behind all the Customer Care resources of UnumProvident.
Quite simply, we believe that the general population does
want to be active in society and part of the workforce.
Statistics support this belief--sixty percent of Americans not
working say that they would like to if the opportunity were
made available.\4\
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\4\ Richardson, Mary, 1994. The Impact of the Americans with
Disabilities Act on Employment for People with Disabilities. Annual
Reviews, Public Health. 15:91-105.
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For those of us in the disability insurance industry, it is
both our job and responsibility to ensure we make that
opportunity a reality. In closing, I would like to thank you
once again for offering me this opportunity to testify. I would
now be happy to answer any questions.
Chairman Shaw. Thank you, sir. Mr. Young.
STATEMENT OF TONY YOUNG, CO-CHAIR, TASKFORCE ON SOCIAL
SECURITY, CONSORTIUM FOR CITIZENS WITH DISABILITIES; AND
DIRECTOR, GOVERNMENTAL AFFAIRS, NISH, VIENNA, VIRGINIA
Mr. Young. Thank you, Mr. Chairman, for this opportunity to
testify on behalf of the Consortium of Citizens with
Disabilities Taskforce on Social Security. Federal disability
programs were created assuming that people with disabilities
would remain unable to work throughout their lives. This static
view of disability meant that little thought was given to what
might happen if people returned to work after receiving
benefits.
However, we now know that disability is not static but a
dynamic condition. Medical advances, new technologies,
improvements in services and supports, along with enhanced
expectations of people with disabilities, have all conspired to
change the very definition of disability. The consequences of
this new disability dynamic have rippled through the Federal
disability system, revealing that it is not ready to meet the
challenges ahead.
Many people are surviving injuries, disabling diseases, or
traumatic accidents to live with significant disabilities. Some
have access to the latest technology, medications, surgeries,
therapies, and other disability management procedures. However,
many do not have access to these state-of-the-art services nor
will they have access to potential advances in genetic
treatments. This opportunity gap will widen the discrepancy in
work opportunities for those in SSA disability programs.
The changing demographics of individuals on the SSA
disability programs, the nature of their disabilities, the age
of onset, the length of time in the programs, and related
factors has had and will have a profound impact on SSDI and
SSI. We offer some brief statistics on page two of our written
statement. It must be noted that people on Federal disability
programs are markedly different than those on private
disability or those on disability programs in other countries.
What works for one population may or may not work for
others, yet while there is much diversity among disability
beneficiaries they share common concerns including an easy
transition from benefits to personal support rather than a
sudden cutoff of benefits, easy re-entry to benefits if work is
not successful, no total cutoff of benefits until reaching a
living wage with comparable health coverage, and a flexible
benefit for individuals who can only work episodically such as
those with mental illness.
While Federal disability programs provide needed cash
assistance and supports there are weaknesses in these programs
we wish to discuss. These include Social Security's definition
of disability which continues to focus on near complete
inability to work, the unrealistically low substantial gainful
activity level, the poor coordination among programs providing
Federal assistance to people with disabilities, the poor
integration of SSI with work programs for older, disabled
children, the ineffective tracking of earnings, and the
remaining work disincentives not addressed by the Ticket to
Work and Work Incentives Improvement Act.
In addition, SSA is facing complex future work challenges.
During the next 20 years, the number of people who reach full
retirement and early retirement ages will increase
substantially and this will have an enormous impact on SSI's
operations. The SSA customer population has changing
expectations about technology and it has more claimants that
are non-English speaking or limited English speaking.
Further, SSA must provide increased employment services for
people with disabilities, must maintain an aggressive schedule
of continuing disability reviews, and other eligibility
reviews, and must implement new approaches to prevent fraud and
abuse all while operating a disability determination process
that remains complicated and lengthy. These problems are
aggravated by SSA's own aging work force which soon will lose
significant numbers of experienced staff including senior
leadership personnel.
The task force recognizes no single hearing can capture all
the questions that need to be addressed about the future of
Federal disability programs and that this is just the beginning
of an exploration of ways to modernize the disability program.
We also recognize that some of these questions fall under other
Committees' jurisdictions, which may indicate a need for
greater coordination for disability programs within Congress.
We offer several other issues in our written statement that
the Committee should examine as it continues its
investigations, including SSA policies on technology
acquisition, CDRs under Medicaid section 1619(b) or Medicare,
Medicaid's 209(b) provisions, and the Medicaid 1619(b) formula
for individual determinations among others. We appreciate the
Subcommittee's interest in these issues and look forward to
continuing to work with you in modernizing the disability
programs. I would be happy to answer any questions you have.
[The prepared statement follows:]
Statement of Tony Young, Co-Chair, Task Force on Social Security,
Consortium for Citizens with Disabilities, and Director, Governmental
Activities, NISH, Vienna, Virginia,
ON BEHALF OF
American Association on Mental Retardation
American Council of the Blind
American Network of Community Options and Resources
American Occupational Therapy Association
Brain Injury Association
Easter Seals
Epilepsy Foundation
International Association of Psychosocial Rehabilitation
Services
InterNational Association of Business Industry
Rehabilitation--INABIR
National Association of Developmental Disabilities Councils
National Association of Protection and Advocacy Systems
National Association of Social Security Claimants
Representatives
National Mental Health Association
National Multiple Sclerosis Society
NISH--Creating Employment Opportunities for People with
Severe Disabilities
Paralyzed Veterans Of America
The Arc of the United States
Title II Community AIDS National Network
Chairman Shaw, Mr. Matsui and members of the subcommittee,
thank you for the opportunity to testify today on the Future of
SSA Disability Programs. I am Tony Young, Director of
Government Activities for NISH and Vice Chair of the Consortium
for Citizens with Disabilities. CCD is a coalition of nearly
100 national organizations advocating on behalf of people with
all types of physical and mental disabilities. I am testifying
today in my role as a Co-Chair of the CCD Task Force on Social
Security.
Introduction
We appreciate having this opportunity to examine the needs
of persons with disabilities who are on, or who will be
participants in, the SSA disability programs--Social Security
Disability Insurance [SSDI] and Supplemental Security Income
[SSI]. SSDI began in 1956 as an early retirement program for
injured workers who could not struggle through to the regular
retirement age of 65. SSI, created in 1972, was a program
intended to supply a minimum level of economic support to the
elderly, blind or persons with disabilities whose work history
was insufficient to qualify them for SSDI.
Since their inception, these disability programs have
evolved unevenly whereby individual problems in the programs
were identified and partially solved, not always with a
comprehensive view or purpose. Changes have come only when
program parameters have been found to be grossly out of line
with reality. For instance, the substantial gainful activity
[SGA] level was finally raised in 1999 to $700 per month after
having been set at $500 per month since 1990. Some program
criteria, such as the SSI earned income disregard, has not been
changed since the program began in the early 1970s.
Federal disability programs, as originally envisioned, were
based on the assumption that people who became disabled would
remain disabled throughout the rest their lives. This static
view of disability meant that little thought was given to what
might happen if people returned to work after becoming eligible
for benefits. However, disability is not static. Disability is
a dynamic condition. Medical advances, new technologies,
improvements in rehabilitation services, and the expectations
of people with disabilities have all conspired to change the
meaning of disability, the very definition of disability. The
consequences of this new disability dynamic have rippled
through the federal disability system, revealing a system that
has not adapted to meet the challenges ahead.
Demographics, Society and the Role of People with Disabilities
The changing demographics of individuals who might benefit
from the SSA disability programs--the nature of their
disabilities, the age of onset, the length of time in the
programs, and related factors--has had and will have a most
profound impact on SSDI and SSI. Some brief statistics provide
a snapshot of Americans with disabilities and the circumstances
in which they live.
In 1996, the Government Accounting Office [GAO] \1\
reported that, during the period 1985 to 1994, the number of
people with disabilities on SSI and SSDI increased from 4.2
million to 7.2 million. By 1994, 57% of people on SSI aged 18
to 64 were those with mental impairments. For those on SSDI the
percentage was 31% of the DI population. The DI and SSI
populations became somewhat younger during that time period: DI
beneficiaries in ``middle age' [30 to 49] increased from 30% in
1986 to 40% in 1994; for SSI beneficiaries the increase was
from 36% in 1986 to 46% in 1994.
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\1\ GAO/HEHS-96-62, SSA Disability Program Redesign Necessary to
Encourage Return to Work, April 1996
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The majority of Americans with disabilities are of working
age [57.6%]. Native Americans have the highest disability rate
of all racial groups [17.6%]; Asians and Pacific Islanders have
the lowest rate [7.2%]. For whites and African Americans, the
rates are 15.3 and 15.9 percent respectively but Hispanics
report a disability rate of only 10.5%. Disability rates are
highest in rural areas [although most people with disabilities
live in metropolitan areas (74.8%)]. Disability rates are 3
times higher among people who did not finish high school than
among those with college degrees. People with disabilities,
according to a 1992 National Health Interview Survey, include 4
million Americans with heart disease, 3.7 million with
arthritis, 1.5 million with mental disorders, 1.4 million with
mental retardation or learning disabilities. There are over
half a million Americans with spinal cord injuries or
dysfunction and 654,000 with hearing impairments.\2\ Another
1.4 million individuals have visual impairments.\3\
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\2\ Disability Watch, Disability Rights Advocates, Volcano Press,
Volcano, CA, 1997
\3\ American Council of the Blind
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Only 3 in 10 working-age adults with disabilities are
employed full or part time, compared with 8 in 10 non-disabled
adults. This low rate of employment has led to an income gap
not reduced since 1986. One in 3 disabled adults, compared to 1
in 8 non-disabled adults, live in households with incomes below
$15,000.\4\
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\4\ 1998 N.O.D./Harris Survey of Americans with Disabilities
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Any examination of federal disability programs must be
viewed in light of the evolving societal factors surrounding
people with disabilities--such as the Individuals with
Disabilities Education Act [IDEA] and Americans with
Disabilities Act [ADA]--and the shifting expectations of the
role that individuals with even the most severe disabilities
can play in the lives of our communities and economy. Among the
most exciting advances have been our expectations for
individuals with the most significant support needs. For
example, over the past twenty years we have moved from building
institutions to creating individualized living arrangements in
the community for individuals who have been labeled with a
significant cognitive disability. Well over 200,000 individuals
who once were never expected to spend their days beyond the
protective walls of congregate settings such as sheltered
workshops or adult day activity centers are now working in the
community in real, competitively paid jobs through supported
employment. They now do what the rest of us do: go to a wide
array of jobs, collect their paychecks, and go home, many with
supports, some with none.
The nation will celebrate the tenth anniversary of the
Americans with Disabilities Act later this month. That Act
recognized what the disability community has known for years,
that ``disability is a natural part of the human experience.''
The protections afforded by the ADA have opened the windows on
the disability experience and revealed a myriad of individual
skills and capacities that very closely parallel those of
people without disabilities. This exposure, along with an
explosive growth of technology, research and training, best
practice services and supports, individual awareness and self-
determination have changed forever the way that we approach
disability in this country from public policy to practice.
New Technologies, Medical Advances and Improvements in Supports and
Services
Much of the changing attitudes toward people with
disabilities and their capabilities have been driven by the
transformation of the workplace and the environment through
technology, breakthroughs in medical science, and innovations
in supports and services used to enhance the independence of
individuals with disabilities. Four years ago, the GAO noted
that, despite poor return-to-work outcomes under SSI and SSDI,
``many technological and medical advances have created more
opportunities for some individuals with disabilities to engage
in work. Electronic communications and assistive technologies--
such as scanners, synthetic voice systems, standing wheelchairs
and modified autos and vans--have given greater independence to
some people with disabilities, allowing them to tap their work
potential. Advances in the management of disability--like
medication to control mental illness or computer-aided
prosthetic devices--have helped reduce the functional
limitations associated with some disabilities. These advances
may have opened new opportunities, particularly for some people
with physical impairments, in the growing service sector of the
economy.'' \5\
---------------------------------------------------------------------------
\5\ GAO/HEHS-96-147, Social Security: Disability Programs Lag in
Promoting Return to Work
---------------------------------------------------------------------------
Finally, the development and replication of new supports
and services has made it possible for many more people with
disabilities to receive the rehabilitation and on-going
supports they need to work. Psychosocial rehabilitation,
occupational therapy, and job coaching are just some of the
services now available to people with severe mental and
physical disabilities. These services help people assume and
maintain work and also include services to develop or enhance
self-care skills so that the individual can function in
society.
Many people with significant disabilities are surviving
injuries at birth, disabling diseases, or traumatic accidents.
Some of these survivors are living longer, more healthy lives.
Some, however, are not. Some of these survivors have access to
the latest technological aides that make them productive and
independent. Many other survivors do not have access to this
technology. Some individuals have access to the latest
prescription medications, surgical techniques, intervention
therapies, and other modern disability management procedures.
Most people with severe disabilities do not. The future holds
potential for remarkable advances in gene therapy and similar
genetic treatments that some will have access to, but many
still will not. This opportunity gap will widen the discrepancy
in work opportunities for those who might qualify for SSA
disability programs.
Different types of supports and expectations are needed and
appropriate for people of different ages and with different
types of disabilities. Disability is as individual as the
person who experiences it. Each disability has its own
personality, with strengths, weaknesses, and even quirks. Each
must be treated appropriate to its own personality in order for
the individual with the disability to be successful at whatever
they might attempt to do.
Clearly, age and disability are interrelated when it comes
to work aspirations. A young adult who has never worked will
have greatly different aspirations than an individual in mid-
work life with several years of work experience, and that
individual will have different aspirations than an older
individual who has many decades of work experience.
Their needs for income and supports will vary greatly as
well. To treat everyone equally is to mistreat the majority of
those on the program. Individualized assessments of needs and
services are essential to successfully assisting people with
disabilities to work. There must be incentives for people to
encourage them to risk leaving the benefit program, and there
must be an easy transition from benefit support to personal
support. It is essential that all persons be allowed to
seamlessly reenter the benefit program should they fail in the
effort to work.
It is possible to identify common concerns for all as well
as particular concerns of subgroups. Common concerns include:
1) an easy transition from benefits to personal support rather
than a sudden cutoff of benefits; 2) easy reentry to benefits
if work is not successful; 3) no total cutoff of benefits until
one reaches a living wage with comparable health coverage; and
4) a flexible benefit for individuals who can only work
episodically, such as those with mental illness.
Weaknesses of Federal Disability Policy
Definition of Disability--In a 1996 report, the GAO
identified at least ``fourteen different definitions of
disability used by federal programs alone, and many of these
definitions provided considerable agency and state discretion
in eligibility determinationa. . . For example, programs
administered through the Department of Education, such as VR,
defined eligibility in terms of physical or mental impairments,
whereas the programs administered through SSA defined
disability in terms of the inability to work.'' \6\
---------------------------------------------------------------------------
\6\ GAO/HEHS-96-126, People with Disabilities: Federal Programs
Could Work Together More Efficiently to Promote Employment, September
1996
---------------------------------------------------------------------------
One of the most serious problems with current disability
program design and policy derives from the fact that Social
Security's definition of disability continues to focus on near-
complete inability to work. Furthermore, the measure for
ability to work is set at a level of income that does not
provide even a base of support necessary for most people to
live. Many of the policies that penalized people with
disabilities for working have been addressed through last
year's Ticket to Work and Work Incentives Improvement Act. Yet,
the retention of the unrealistically low substantial gainful
activity [SGA] level continues to punish rather than reward
people who attempt to leave entitlement programs through work.
We recognize that considerable debate has already occurred on
this subject. However, we reiterate once again our firm belief
that federal disability programs must respond to modern reality
rather than remain mired in the mind-set of the last century.
In the past, CCD has recommended changes in the definition
of disability that would: retain the criterion of mental or
physical impairment [or combination of both] verifiable by
accepted clinical methods; replace the concept of SGA with an
assessment of functional limitations in all areas of life
activities; and consider vocational, medical and other factors
in an overall assessment of an individual's functioning in
areas of major life activity. Furthermore, attention must be
paid to how temporary, recurring/intermittent, or partial
disability is addressed by federal disability programs.
Whatever future steps Congress may take in this regard, CCD
urges you to proceed with caution. Any proposals to revise the
definition of disability, whether through statute or
regulation, should be subjected to careful analysis of the
effects on people with disabilities and a realistic assessment
of the true meaning of disability, including for those who are
able to work with necessary, on-going supports.
Multiplicity of Federal Disability Programs--In 1996, the
GAO found that federal assistance to millions of people with
disabilities was provided through 130 programs in 19 federal
agencies.\7\ Very often, service delivery is performed through
numerous public and private agencies at the state and local
level. In the fiscal year studied [1994], GAO revealed that the
federal government spent over $60 billion on 69 programs
targeted exclusively to people with disabilities. In addition,
people with disabilities benefited from between $81 billion and
$184 billion in spending through 61 partially targeted
programs. This list of programs did NOT include AFDC, the
forerunner of Temporary Assistance to Needy Families [TANF]--as
GAO eliminated programs not specifically intended to address
disability. How well these programs coordinate with one another
and how well they serve the people they were created to help
are questions worth considering.
---------------------------------------------------------------------------
\7\ Ibid.
---------------------------------------------------------------------------
Interaction with Other Governmental Programs--As noted
above, SSA disability programs do not exist in a vacuum. There
are over 100 federal programs that affect people with
disabilities. It is imperative to examine how the SSA
disability programs interact with other poverty programs, e.g.,
job training, Food Stamps, housing subsidies, transportation
supports, long-term supports, and similar programs. A major
issue for individuals with severe disabilities concerns the
need to stitch together a patchwork quilt of income, and in-
kind supports in order to live. Too often, taking a job
unravels this quilt in ways that undermine the work effort and
trap them in poverty and government cash assistance.
For example, Medicaid policy allows some states to have
stricter Medicaid income levels, asset levels, income
disregards and even medical disability definitions than SSI.
This means that incentives for SSI recipients to return to work
are seriously undermined because the Medicaid needed to support
work attempts is not always available if Medicaid rules are not
the same as those of SSI. In addition, continuing disability
reviews [CDRs] that find people ``no longer disabled'' not only
deprive them of cash benefits but they cost such persons
continued Medicaid and Medicare which, under current law, are
supposed to be available to those who leave the SSI and SSDI
rolls to work. Furthermore, the Medicaid formula for
determining medical expenses used for individualized
computations of earnings thresholds in determining continued
eligibility under Section 1619(b) now only recognizes publicly-
provided attendant care costs and fee-for-service per capita
Medicaid expenditures on behalf of that particular patient.
Accounting for the true costs of supports becomes an issue when
states' Medicaid reimbursements are only recorded as
capitations to managed care contractors---and do not,
therefore, fully recognize the high costs of services actually
rendered to particular disabled individuals.
HUD housing programs do not have earnings disregards. Local
public housing authorities do have authority to institute
earnings disregards for public housing units---but NOT for
Section 8, vouchers, Section 212, Section 811 or the special
subsidies for people with disabilities established by Congress
in the late 1990s. And even this limited authority has so far
been largely directed at helping TANF mothers in public units
return to work.
A growing body of research indicates that a large
proportion of parents receiving TANF [or who have left TANF]
have disabilities or health conditions that may affect their
ability to succeed in the workforce if they are not provided
with the appropriate supports and services to help them
succeed.\8\ In addition, many families who are eligible for
Medicaid or other publicly funded health insurance coverage are
not enrolled in those programs, due to the de-linking which has
occurred.
---------------------------------------------------------------------------
\8\ Center for Budget and Policy Priorities, Feb. 2000, ``Recent
Studies Indicate that Many Parents who are current or former welfare
recipients have disabilities or other medical conditions''
---------------------------------------------------------------------------
These are but a few of the complexities of the social
security disability programs' interactions with other
government programs.
Integrating SSI with work programs for older disabled
children--Children in the IDEA era have, generally speaking,
been entitled to a free and appropriate public education and,
theoretically, have had access to an array of services while in
school. However, they lose these supports upon attaining a
certain age and often fail to advance into the world of adult
employment as a result. Children and their families need the
services accorded by IDEA in order for them to perform at
satisfactory levels to achieve their educational goals. These
same or similar services may be required for them to then meet
their vocational goals. In addition, there is the need to
eliminate the penalties built into the current system for young
people who need ongoing supports even while working.
Work Incentives--The Ticket to Work and Work Incentives
Improvement Act, in reality a major achievement in addressing
certain deficiencies in federal disability programs, is placed
here to draw attention to remaining hurdles confronting people
on SSI and SSDI. Furthermore, because PL 106-170 has yet to be
implemented, we cannot predict how successful it will be in
eradicating barriers it was created to remove.
A major problem with the SSDI program has been its
eligibility determination system that forces applicants to
assert that they have no residual work capacity in order to
qualify for benefits. Then, if someone attempted to work, the
system abruptly withdrew all supports that individual needed to
survive. The Ticket to Work and Work Incentives Improvement Act
took significant steps toward eliminating this bias through its
provisions assuring extended Medicare coverage for workers with
disabilities and the easier return to benefits should a work
attempt fail. However, SSDI retains the assumption that work
beyond a very modest, less-than-minimum wage level of earnings
means that a person is no longer ``disabled''.
The concept of appropriate supports means the elimination
of all financial and psychological disincentives to work. In
the past, applicants for SSDI had to undergo months of review
in which they had to assert no capacity for work. They waited
months for benefits, often after months of appeals, and waited
again to qualify for Medicare coverage. Only recently, did they
have the presumptive eligibility for entrance into the
vocational rehabilitation system and, even if they did receive
VR services, they were warned not to earn too much, lest they
lose all of their benefits.
If implemented properly, the Ticket to Work and Work
Incentives Improvement Act could address many of these
disincentives. The extension of Medicare will assure continued
health care coverage for SSDI recipients. Depending on how and
whether they are adopted by states, the Medicaid buy-in
provisions have the potential to provide more complete health
care supports to beneficiaries going to work. Again, depending
on how SSA implements the Ticket to Work program, beneficiaries
should have greater choice in provider and type of vocational
rehabilitation services. And, the benefits outreach, counseling
and assistance, if done properly, can offer beneficiaries
clearer road maps to navigate the consequences of going to
work. For those with a recently acquired disability, early
intervention of the type envisioned through the counseling and
assistance planners may mean the difference between returning
to work and languishing on the disability rolls for years.
Finally, the expedited reentry provisions offer some measure of
reassurance that benefits will not be difficult to obtain
should a work attempt fail.
However, while the system manages to make initial
disability determinations, it is totally inadequate at tracking
income and earnings as people take advantage of the
aforementioned services. This inadequacy will become more
apparent as people take advantage of the recently enacted work
incentives legislation. For example, while overpayments to
beneficiaries who work have always been problematic, they
promise to become catastrophic if left unchecked. Beneficiaries
will more deeply mistrust the program, providers won't get paid
under the Ticket if the benefits continue unnecessarily, the
fiscal strain on the program will continue, and other parts of
the disability program will suffer as SSA struggles to correct
the problem without adequate resources. Congress must address
the need for systems improvement and modernization.
Challenge of the Baby Boom
It is no secret that during the next twenty years, there
will be a large increase in the number of people who reach both
retirement and early retirement ages. Strategies must be
explored to help individuals reaching early retirement age, who
lose their ability to perform their existing jobs, to remain in
the workforce for as long as possible. Currently, the SSA
disability programs only respond once someone's disability has
reached the acute stage in which an individual is driven out of
the workforce entirely.
The sheer number of baby boomers will have an enormous
impact on SSA's operations. According to SSA's Office of the
Actuary, by 2010, SSDI applications will increase by 54% and
SSI disability applications by more than 10%.\9\ Over the same
period, the increase in the normal retirement age also will
affect the number of disability applications.
---------------------------------------------------------------------------
\9\ Testimony of Cynthia Fagnoni, Director, Education, Workforce
and Income Security Issues, General Accounting Office, to the Ways and
Means Social Security and Human Resources Subcommittees, Hearing on
Social Security's Readiness for the Impending Wave of Baby Boom
Beneficiaries, Feb. 10, 2000
---------------------------------------------------------------------------
In addition, SSA has been faced with more complex and
changing work challenges. The disability determination process
is complicated and lengthy. The SSA customer population has
changing expectations about technology. More claimants are non-
English speaking or limited-English speaking, leading to a need
for more bilingual staff. Recent legislation requires SSA to
provide increased rehabilitation and employment services for
people with disabilities, to maintain a schedule of continuing
disability reviews and other eligibility reviews, and to
implement new approaches to prevent fraud and abuse.
The problem is aggravated by the fact that SSA's workforce
also is aging and will begin to lose significant numbers of
experienced staff, including senior management and leadership
personnel. More than one-half of SSA's 63,000 employees will be
eligible to retire by 2009 or leave government service after
twenty years with pension rights.\10\ Between 2007 and 2009,
about 3,000 employees are expected to retire per year. The
service delivery problems have been exacerbated by SSA's
prolonged period of downsizing--since 1982, SSA's workforce has
declined by 27%. At Subcommittee hearings earlier this year,
the Social Security Advisory Board, the Commissioner of Social
Security, and the General Accounting Office raised the issue of
how SSA should plan to retain experienced staff and train new
managers to meet these needs.
---------------------------------------------------------------------------
\10\ Ibid.
---------------------------------------------------------------------------
The CCD Social Security Task Force has voiced concern for
some time over the continued long-term downsizing of the SSA
workforce and believes that failure to conduct appropriate and
timely CDRs and other eligibility reviews could lead to
decreased trust in the integrity of the Social Security and SSI
programs. In addition, the new efforts to assist people with
disabilities to go to work, through the Ticket to Work and Work
Incentives Improvement Act of 1999, will require new and
expanded approaches for SSA interaction with beneficiaries.
Adequate staffing levels are critical for these and other
efforts to be successful, especially given the coming
disability and retirement years of baby boomers.
The independent, bipartisan Social Security Advisory Board
has unanimously urged that SSA's ``administrative budget, like
its program budget, be explicitly excluded from the statutory
cap that imposes an arbitrary limit on the amount of
discretionary government spending.'' \11\
---------------------------------------------------------------------------
\11\ Testimony of the Honorable Stanford Ross, Chair, Social
Security Advisory Board, before the House Subcommittee on Social
Security, Committee on Ways and Means, February 10, 2000
---------------------------------------------------------------------------
We believe that the entire Limitation on Administrative
Expenses [LAE] should be removed from under the domestic
discretionary spending caps so that SSA's administrative
functions can continue to operate smoothly for beneficiaries.
[For background, see CCD statement for the record, March 16,
2000]
Issues for the Future
No single hearing can capture the entire range of questions
that need to be asked about the future of federal disability
programs. The CCD Social Security Task Force recognizes that
this is just the beginning of an exploration of ways to
modernize SSDI and SSI. We also recognize that some of these
questions fall under other committees' jurisdictions. That,
however, may indicate a need for greater coordination among
Congressional bodies responsible for programs affecting people
with disabilities. Based on our testimony, we would like to
offer several issues that the committee should examine as it
continues its investigations.
Does the definition of disability under social
security adequately capture the spectrum and continuum of
disability today? Does it reflect the interaction of
vocational, environmental, medical and other factors that can
affect the ability of someone on SSI or SSDI to attain a level
of independence?
Do current SSA program policies foster or hinder
acquisition of technology that will lead to greater
independence? Are these technologies covered under impairment
related work expenses? Would someone acquiring necessary
supports to go to work encounter problems with asset and
resource limits imposed under federal disability programs.
Should tax credits or other incentives be provided for people
to obtain these supports to go to work?
How competent is SSA at communicating with its SSI
and SSDI beneficiaries with visual impairments? Frequent
failure of SSA to produce notices and documents in accessible
formats lead to penalties imposed on such beneficiaries and
increased administrative expenses in dealing with the
consequences.
Should CDRs be reevaluated for those covered under
Medicaid Section 1619(b) or individuals still relying on
Medicare to prevent denial of the very health care coverage
offered to encourage people to work?
Can the stricter income, asset levels allowed
under Medicaid's 209[b] provisions undermine promotion of
Medicaid buy-ins and other initiatives designed to assure
continued health care coverage for individuals on SSI and SSDI
going to work?
Are changes needed in the current Medicaid 1619[b]
formula for individualized determinations to allow for other
medical costs of working disabled persons met by other
programs? [e.g. Medicare, state pharmacy assistance, AIDS Drug
Assistance Programs, WIC, public maternal and child health
programs, cash medical purchases and private health insurance.]
Why are earnings disregards recognized for SSI,
SSDI, Medicaid and Medicare purposes not so honored by housing
subsidy programs as well? Income and assets excluded by the
PASS program are excluded under the housing statutes. The HUD
programs should similarly recognize other disability-related
disregards.
How well do veterans' programs interact with and
serve veterans with disabilities who rely on SSDI and/or SSI?
Can steps be taken to replicate the earnings
disregards and work incentives of the SSI and SSDI programs in
Medicaid and the AIDS Drug Assistance Programs? This is
important for individuals dependent for drugs on non-SSI-based
Medicaid (e.g., TANF-related cases) and the AIDS Drug
Assistance Programs rely for essential pharmacy coverage on
programs which currently have NO meaningful earnings disregards
or other work incentives.
Should state standards for exemption from welfare
time limits and work/training requirements make allowances for
families in which either a primary or secondary parent cares
for a child with a disability? Studies suggest that at least
20% of TANF cases have disabled primary caretakers, children or
second parents (since many states can and do now include two
parent families).
Again, these are but a few questions that arise when
considering the array of federal programs affecting Social
Security beneficiaries with disabilities. We appreciate the
subcommittee's attention to these issues and look forward to
continuing to work with the members in examining the future of
the disability programs.
Chairman Shaw. Thank you, Mr. Young. Mr. McCrery.
Mr. McCrery. Professor Berkowitz, having been a history
major in undergraduate school, I welcome the opportunity to
grill a professor of history. I found your testimony very
interesting and as was sometimes the case though in my history
classes, I learned a lot of facts but I am not sure the point
that I learned. So I am going to ask you, if you would, to
describe for us any of these emerging trends that you cautioned
us to be aware of. Can you identify any of those for us that
you discovered in your research?
Mr. Berkowitz. Yes, sir. I guess the most important one is
simply that we should recognize that when you try to tighten
the rolls as one might want to do in pursuing a work strategy
then you have the risk always of expanding the rolls and what I
meant to say by that is that this was tried in the eighties in
a bipartisan way. Congress passed a law in 1980 which
encouraged the Social Security Administration to periodically
re-examine people who were on the disability rolls and in 1981
aided by a GAO report the new administration decided to do that
and to pursue that policy aggressively.
What in fact happened though was that this policy was
pursued so aggressively that administrative law judges who were
part of the system of disability determination and the courts,
which are part of this disability determination system, and
ultimately the Congress itself, including this Subcommittee,
but many others throughout Congress cautioned the Social
Security Administration not to move aggressively on this
matter. Too many people were being dropped from the rolls, and
new legislation was passed in 1984 at the end of a very long
process. As Professor Burkhauser pointed out, the disability
rolls went up a great deal in the long run.
So in trying to cut the rolls we can make the mistake
sometimes of actually defeating our objective. That would be
lesson number one.
Lesson number two might simply be that when we pass a new
law like as we did in 1972 with the creation of the
Supplemental Security Income Program, we should try very hard
to look at prevaling trends. What happened in the case of SSI,
I think, is that the discussions that began in 1969 were all
centered on President Nixon's welfare reform proposals.
People didn't think much about the so-called adult welfare
categories, and they failed to see that, just as the discussion
was maturing over several Congresses, the disability incidence
was going up. So by the time the law was passed and by the time
it was put in place there was a tremendous rise in the
disability rolls. This is an example of not looking at the
trends in the middle of trying to put together a very delicate
political deal, another lesson that we have to look at.
I guess a third and final lesson is that I think we should
emphasize here as we think about interventions on the
disability rolls that the person who is trying to apply for
disability benefits is facing a great deal of uncertainty. He
doesn't know whether he is going to get benefits, and so
therefore he is very reluctant to engage in rehabilitation. I
am put in mind of a description from the thirties from Harry
Hopkins' WPA and other welfare programs of how hard it was for
someone in the thirties to actually go in and ask for help from
the Federal Government. It was the last thing they wanted to
do.
Many of these people that are entered on the disability
rolls are in similar positions and therefore as we think about
our interventions we should think about the uncertainty that
they face. These are all lessons I draw.
Mr. McCrery. So are you suggesting that we should be more
aggressive, the government should be more aggressive in getting
individuals into rehabilitation from the outset rather than
having this lingering doubt about whether they are going to
qualify for benefits.
Mr. Berkowitz. Well, I have suggested in the past that
there might be an interim benefit status that we might call
rehabilitation status which would precede full benefits. But
there is a very delicate question of policy that you would have
to consider at some length. The other thing that you might
think about is that we have always put SSDI together with
Social Security, just as we do in this Subcommittee.
Maybe that is not the right way to think about disability
policy. I think we have seen in the last 10 years or so, sort
of a separation between the notion of retirement and Social
Security and SSDI. Maybe we need to look at SSDI as a somewhat
different program. Maybe there needs to be--the same way there
is a Committee to consider the problems of the aging in
Congress--some sort of oversight Committee that looks at
disability. But these are all big changes that you would have
to consider for a great deal of time before making.
Mr. McCrery. Thank you, Mr. Chairman. I see my time has
expired. I may want to come back after you all have finished
and ask a couple more questions.
Chairman Shaw. Mr. Tanner, do you have any questions?
Mr. Tanner. Mr. Chairman, I apologize for being late. I
have been unavoidably detained by about three other--this is
the only job that I have ever had where one thinks nothing of
it to be scheduled to be in three different places all at the
same moment, and so I apologize and I am looking forward to
reading through the record. Thank you.
Chairman Shaw. OK. Mr. Baron. You indicated that a majority
of the people with a serious mental illness are desperately
poor and likely to remain at or near the poverty level for the
remainder of their lives and will do so whether they work or
not unless there are significant changes in our national
policies. What changes would you want us to consider?
Mr. Baron. I would want to consider a fairly broad range of
changes. There are certainly a great many people in the
disability community generally and among people with mental
illness who have the capacity to go on to higher education and
post-graduate degrees, who have the capacity to reach on any
levels of professional engagement. We need to invest more
heavily in making sure people have access to and financial
support to increase their education. It is a commonplace
observation that the higher your educational level the more
substantial your income is likely to be.
We need to help more people with disabilities and certainly
more people with serious mental illness to get the educational
qualifications that they need and to place a much greater
emphasis on education. We need to place a much greater emphasis
on specific skill training for those who are not going on to
college educations so that they have a set of skills that make
them much more likely to work. But I also think we need to take
a look at those people who are not likely to go on to college
educations, who are not likely to benefit from technological
skilled training programs, and think clearly about how we
provide greater financial and other sources of support to
people who are, like many Americans, working to make a living
within the working class in our country.
We need to find a way to help people grab hold of
prosperity in a job market that makes it very difficult for
them. Further, we have among disabled populations in general,
but certainly within the population of people with serious
mental illness, a number of people who are not going to be able
to work full time. Their disability is going to preclude full-
time work.
I don't want to presume to suggest the specific policies
that we need to mount to address those problems but we do need
to find a way to make it possible for people whose optimal
vocational level is at part-time to earn a decent living and to
combine that living with disability payments and social
supports that make it possible for them to go beyond the
poverty level.
Anybody who is working, full time or part time, and is
dependent upon secondary labor market jobs lives at or near the
poverty level. I am not sure that we want serious disability of
any kind to relegate people to a poverty level existence.
Chairman Shaw. Mr. Mohney--by the way your name tag there
is misspelled. It is spelled with an A instead of an O. You
reported a recovery rate among your clients, who are also
Social Security beneficiaries, of roughly six times that of
Social Security. Do all these recoveries represent successful
return to work and what aspect of your claim management do you
believe is most responsible for this success, which is rather
startling?
Mr. Mohney. I would say that the vast majority of these
recoveries reflect successful return-to-work. In terms of the
aspects of the claim management process clearly it is the
things we talked about. It is triage, recognizing that
different claims are different and have different recovery
potential matching up the right types of resource with the
right claim on a very individualized basis to understand and
promote return to work.
It involves continuing review. Disabilities, again our
experience is that most disabilities do not last a long period
of time and so we need to work with our insureds to focus on
their abilities to focus on opportunities to provide vocational
rehabilitation services that might benefit them. Early
intervention is key and one of the problems with the length of
time associated with the approval process for Social Security
is that we find that many times insureds have to fight so hard
to be accepted that they accept a disability mindset and that
once that mindset has been accepted it is very difficult to get
them to think in terms of return to work and be as interested
in vocational rehabilitation.
Motivation is key and I think we need a system that is fair
on the front end in terms of the approval process and very
interactive throughout the process geared toward return-to-
work.
Chairman Shaw. Well, are you--compare that with the Federal
system.
Mr. Mohney. My impression of the Federal system is that
there is opportunity for improvement, particularly along the
lines of the ongoing claim management particularly in the areas
of early intervention having clinical resources review the
situations, look at the appropriateness of care, looking at
whether treatment plans are developed toward returning the
person to work versus simply getting them out of the hospital.
I believe that there is tremendous opportunity there as it
relates to the continual review and as it relates to getting
individuals focused on their abilities and their potential for
return to work and supporting that.
Mr. Tanner. Mr. Chairman.
Chairman Shaw. Yes. Mr. Tanner.
Mr. Tanner. The thought occurred to me, in this system does
it make sense to look at the definition of disabled--is the
definition of disabled adequate or would a less restrictive
definition be of any--make any sense?
Mr. Mohney. Mr. Tanner, I clearly think that would be and
we talked earlier about a comprehensive strategy and review of
the situation. I believe the definition of disability needs to
be revised. In particular, we find on the private side real
benefit where individuals are able to return to work gradually
and that is typically how return-to-works occur. It does not
occur all at once but it occurs gradually with a buildup in
time and hours. And on the private side we do provide partial
benefits such that they are not simply dropped from our roll. I
think that that would be a significant incentive that would be
beneficial in the program, yes, sir.
Mr. Tanner. Does anyone else have a comment about that?
Mr. Berkowitz. May I, sir?
Mr. Tanner. Yes.
Mr. Berkowitz. Even if we did have a change in definition,
it would be important to remember that the original system was
created as a reaction against the workers' compensation
program, which those of you who have served in state
legislatures know is still a major concern in states today.
The problem in the workers' compensation program in the
states has been permanent partial disabilities, partial
disabilities that prove to be a major problem, and if you were
to move in a direction of some sort of partial disability
definition, you would be opening up many problems for potential
expansion of the rolls so that would have be looked at very
carefully.
Mr. Tanner. I understand that but I am talking about making
sense as to the goal of helping people achieve independence.
Yes, sir. Mr. Young.
Mr. Young. CDC has long advocated for a modification of the
way we look at disability, something that looks more at
functional limitations and functional abilities and then uses
those results to help serve people in the best way possible.
What we do right now is just determine whether people are
making $700 a month or not and that tells you something but it
doesn't tell you a lot more.
And that next look, the functional abilities, impairments,
barriers, between that person and the job are the questions
that need to be asked and the solutions that need to be
determined for where a new definition of ability to really be
effective and for us to really make progress on transforming
the current early retirement program into a full support
program for those who need to retire but a support program for
those who want to work as well.
Mr. Burkhauser. Mr. Tanner, my grandmother used to say that
the road to hell is paved with good intentions. The Dutch had a
partial disability program and the reason that their disability
transfer rolls are so high today is that they had an
elegibility test which if you were judged to be 15% disabled
but weren't employed meant you were eligible for full
disability benefits unless it could be shown by the agency that
it was unemployment and not disability that was causing the
problem.
This type of entry into their system was probably the major
reason why the Dutch rolls are twice the size of the United
States or any other country in the world. We need to take
serious the notion that folks with disabilities can work and
change our policy goals so that our first priority is to get
folks with disabilities into employment.
That is what Sweden and Germany do. Even though they have
very high replacement rates, much higher than we have in the
United States, they have a view that no one can get onto the
disability benefit rolls unless they have gone through a year
or two of rehabilitation and it is shown that they can't work.
Hence income benefits are definitely a second round program in
those countries.
Mr. Tanner. So the problem is not necessarily definitions
but more execution of rehabilitation.
Mr. Young. No, the problem is both. The definition does
feed into the problem because you come into the system and you
spend at least 5 months and maybe 2 years proving you have not
a bit of residual work capacity. And then the next thing you
get that happens is you get a letter saying would you like to
go to voc rehab. And the disconnect in people's minds is just
phenomenal.
If we are serious about supporting people with severe
disabilities who want to work, we have to change the way we
start that mind process going and support people right up at
the front but then recognize that no matter what you do, what
supports you provide, what training, what technology, some
people will not be able to work. Find those folks, give them
what they need, find the folks who can work, support them as
they need, and then let the process go on.
Chairman Shaw. Mr. McCrery.
Mr. McCrery. Professor Burkhauser, you mentioned just now
again your work first strategy. In your testimony you said that
in order to keep rolls at socially acceptable levels a work
first strategy must be employed. Leaving aside the question of
what is a socially acceptable level, could you expound a little
on the work first strategy? What are some of the tools that we
should look at to implement a work first strategy?
Mr. Burkhauser. In both Sweden and Germany you go on a
temporary disability benefits program before you go into the
permanent system and every worker who comes onto the temporary
rolls in Sweden and Germany is given rehabilitation that
connects them to the work force. It is only after that has
proven unsuccessful that people are allowed onto the permanent
rolls.
Mr. McCrery. Excuse me. Is this done prior to a
determination of disability? In other words, is it done upon
application of the individual for benefits or how does that
work?
Mr. Burkhauser. One of the things that goes on in these
countries that is different than here is that each has a
sickness benefit so people receive this benefit almost
immediately and can be on that program for a couple of months.
At that time employers are involved with the social agencies to
see whether the worker needs rehabilitation. In addition there
are in Sweden, jobs targeted for folks with disabilities. In
Germany there are quotas. Firms with 16 or more workers are
required to employ a worker with a disability for every 16
workers.
In Sweden and Germany firms are not allowed to fire a
worker based on health conditions, so there are all sorts of
firm level programs that are institutionalized that make it
more likely than in the United States that firms will
accommodate their employees who experience the onset of a
disability. In our country, as Tony Young was saying, there is
a long period following the onset of a disability before you
are entitled to disability benefits and it is only after you
get the benefits that there is some effort to do some
rehabilitation.
The key is to put the rehabilitation effort up front. One
possibility would be to have a system where you pass an initial
screen that is sufficient to get you into a rehabilitation
program and possibly a temporary benefit. But this would
strictly be a temporary benefit to go along with
rehabilitation. The determination for permanent benefits would
then occur after 6 months or even a year or 2 years.
Mr. McCrery. OK. Thank you. Thank you, Mr. Chairman.
Chairman Shaw. Thank you. I will throw this out to anyone
who would like to take it. What are we doing here with regard
to taking someone who may be physically impaired so that they
cannot be rehabbed to get back into being a carpenter, an
electrician or a plumber, but they are not mentally impaired,
so that they can get into another field through advanced
education. What are we doing about that?
Mr. Young. We have the Rehabilitation Act that is supposed
to address those issues and in fact.
Chairman Shaw. How is that operating?
Mr. Young. Well, there is a hearing in itself, sir. The
Work Force Investment Act, which has lots of money for job
training in there that I guess is part of what we need to talk
about as far as coordination of disability programs and what
Social Security can do and what the Rehabilitation Services
Administration can do and what the Department of Labor can do
as far as retraining people. But there are lots of people who
do to rehab every year and I think about 200,000 or so get
placed in new jobs.
Of course, the demand is much greater than the number of
people who actually go through the process and end up with jobs
and that is the end of the story.
Chairman Shaw. Do we need three agencies doing that or
would it be better to try to focus on one agency?
Mr. Young. Again, sir, I think that is a hearing of itself.
I think we very well don't need three agencies doing that.
Chairman Shaw. Maybe we ought to look into that next year.
Mr. Young. I think that would be a good idea.
Mr. Berkowitz. Mr. Chairman, there was a period when we
spent a substantial amount of trust fund money essentially
subsidizing the vocational rehabilitation program in an effort
to get people rehabilitated. I think it is fair to say that
that was not a particularly strong success and we changed it
and no one is that sad that we did.
The other thing that I might add is that over time as we
have tried to organize the government, we have created a lot of
distance between vocational rehabilitation and our SSDI
program. Vocational rehabilitation is one of the bargaining
chips in the creation of the Department of Education and so it
went over there when it was created. And of course SSA is now
an independent agency but that bureaucratic distance and indeed
rivalry between vocational rehabilitation and SSA has been a
factor in the historical record and that hasn't helped
coordinate efforts between the two agencies.
Mr. Mohney. Mr. Chairman, I would add that on the private
side we have had great success in focusing on retraining and
focusing on labor market surveys and functional capacity
assessments to match up individuals who perhaps have some
impairment, some restrictions and limitations, but are
interested in working and finding other occupations that they
can be successful in. It has been cost effective. It must be
applied selectively. I don't think there is a broad, one
category fits all approach, but when applied selectively to
individuals it can be highly cost effective.
Mr. Baron. Could I?
Chairman Shaw. Yes, sir.
Mr. Baron. Just one other observation that in thinking
through how to better utilize government dollars to retrain and
re-educate people, I would want to caution us to think as
closely as we can about the kinds of jobs we want to train and
educate and prepare people for and to be clear that the kinds
of jobs that are going to be developing over the next decade or
two are quite different than the kinds of jobs that we might
have prepared people for a generation or even a decade ago and
that if we want to provide people with retraining and re-
education for new careers it ought to be for new careers that
lead them toward prosperity and do not lead them back into jobs
that it is going to be hard for people to make economic
progress through. And that is a different kind of investment
and probably a much greater investment than many of us have
currently been thinking about.
Chairman Shaw. Well, thank you all very much. They called
the vote at just the right time. I was afraid they were going
to call it around 11 and we were going to have to make you
gentlemen wait but I appreciate your time and I appreciate your
testimony. It has been very helpful. Thank you. We are
adjourned.
[Whereupon, at 11:42 a.m., the hearing was adjourned.]
[Submissions for the record follow:]
Statement of Kenneth Nibali, Associate Commissioner for Disability,
Social Security Administration
Mr. Chairman and Members of the Subcommittee:
Thank you for providing me the opportunity to discuss
initiatives to ensure that the Social Security Administration's
beneficiaries with disabilities receive the supports needed to
achieve independence. This is an important issue, and the
Social Security Administration (SSA) has placed a high priority
on helping its Social Security Disability Insurance (SSDI) and
Supplemental Security Income (SSI) beneficiaries return to
work.
I will discuss SSA's disability process, the current work
incentives available to individuals with disabilities and the
Ticket to Work legislation that will provide more opportunities
for individuals with disabilities to return to work. I will
also discuss some of the differences between SSA's programs and
private insurer programs.
Social Security Disability
Generally, when people think about Social Security, they
think about retirement benefits. Nearly one third of Social
Security beneficiaries, however, are the surviving family
members of workers who have died or are severely disabled
workers or their wives and children. The protection provided by
the SSDI program is extremely important, especially for young
families. For a young, married, average income worker with two
children, Social Security is the equivalent of a $223,000
disability income insurance policy. In the event of severe
disability, the SSDI program stands between these families and
poverty. Additionally SSI serves the most economically
vulnerable population with disabilities, most of whom are
living in poverty.
In June 2000, 5,884,200 beneficiaries were receiving Social
Security benefits on the basis of disability--4,959,500
disabled workers, 724,400 disabled adult children, and 200,300
disabled widows and widowers. In addition, 170,800 spouses and
1,419,800 minor and student children of disabled workers were
receiving benefits. Further, 5,304,324 blind or disabled
individuals received SSI benefits. About 30 percent of these
individuals received both SSDI and SSI benefits. Thus, in June,
SSA sent benefits to over 9.5 million individuals on the basis
of disability. In fiscal year 1999, disabled workers and their
dependents received over $50 billion in cash benefits under the
SSDI program and disabled individuals received over $24 billion
in cash benefits under the SSI program.
Furthermore, SSDI benefits are the gateway to the Medicare
program to those individuals who have been eligible for
disability benefits for 24 months. These benefits provide
health care coverage that to many SSDI beneficiaries is simply
irreplaceable, since many would not be able to obtain insurance
in private markets simply because they are disabled. The
Medicare program paid over $24 billion in benefits in fiscal
year 1999 to individuals whose entitlement to Medicare is based
on their SSDI benefits. Thus, almost $75 billion was paid in
fiscal year 1999 from the Social Security and Medicare programs
on behalf of disabled workers and their families.
As with the retirement program, SSDI is funded through a
payroll tax on covered earnings, paid by employees, their
employers, and the self-employed. The current DI payroll tax on
earnings is 0.9 percent for employees and employers, each, and
1.8 percent for the self-employed.
SSDI is designed to protect workers covered under the
Social Security program who become severely disabled, with
applicants judged on the basis of a uniform set of standards.
The criteria we use to award disability benefits requires that
the condition either be expected to result in death or last at
least 12 months. To qualify, the individual must be unable
because of a medical condition to perform any substantial work
in the national economy. Thus, the inability to do one's own
past work or the inability to find suitable employment are not
a sufficient basis for meeting the definition of disability.
Our regulations provide for a five-step sequential evaluation
based on the statutory definition of disability, and require
that a claimant not currently be engaging in substantial
gainful activity (SGA)--a level of work currently set at $1,170
per month for blind beneficiaries and $700 per month for non-
blind beneficiaries, a level recently proposed to be adjusted
annually to the national average wage index. Additionally,
applicants must have worked 20 quarters during the 40 quarter
period ending with the quarter in which disability began
(special provisions apply for workers who are under age 31),
and they must complete a 5-month waiting period after the onset
of the disability.
After a claim is taken in one of Social Security's field
offices, it is forwarded to one of the State Disability
Determination Services. These State employees are responsible
for following up on at least one year's worth of medical
evidence in support of the claim, scheduling consultative
examinations if necessary, and making the disability
determination at the initial and reconsideration (the first
level of appeal of an adverse initial determination) levels.
The States are fully reimbursed for making these
determinations. The process of evaluating an individual's
disability accounts for the administrative costs for the
disability program being somewhat higher (3.0 percent of
benefits) than those for the retirement and survivor program,
largely because of the cost of obtaining medical evidence and
the need for a thorough evaluation by a physician or other
highly trained professional reviewer.
While the Social Security eligibility criteria are very
strict, we also have a very structured system to ensure that
applicants' rights are protected and that those applicants who
are eligible actually get their benefits. Currently, a
physician must be part of the decision-making team, although we
are testing a system where certain claims, generally the most
severe and obvious cases, would be decided by a trained
layperson. After a reconsideration denial, a claim can be
appealed to an administrative law judge, then the Appeals
Council and up to a federal court. We also are testing a model
that would streamline the process by eliminating the
reconsideration step. While the primary purpose of SSDI is to
replace a portion of income, the program also includes
provisions designed to encourage beneficiaries to return to
work.
Current Work Incentive Provisions
Work incentives assist beneficiaries with disabilities to
enter or reenter the workforce by protecting entitlement to
cash payments and/or health care until this goal is achieved.
Some work incentives are common to both the SSDI and SSI
programs, while some are unique to one program or the other.
Because even the common work incentives may be treated
differently by either program, I would like to briefly discuss
work incentives as each program treats them.
SSDI Work Incentives
There are several work incentives for SSDI beneficiaries
built into the Act, most notably impairment-related work
expenses (IRWE), the trial work period (TWP), the extended
period of eligibility for reinstatement of benefits (EPE), and
continuation of Medicare. The availability of these incentives
is dependent upon the disabled beneficiary continuing to have a
disabling impairment.
Certain impairment-related work expenses may be deducted
from gross earnings when determining SGA. An expense qualifies
as an IRWE during a period of work when:
The item or service enables them to work;
They need the item or service because of their
disabling impairment;
They pay the cost and are not reimbursed by
another source (e.g., Medicare, Medicaid, private insurance);
The expense is ``reasonable''--that is, it
represents the standard charge for the item or service in their
community.
The TWP enables disabled beneficiaries to test their
ability to work by allowing them to receive full benefits
regardless of how high earnings might be. The TWP continues
until the accumulation of 9 months (not necessarily
consecutive) of ``services'' performed within a consecutive 60-
month period. We use this ``services'' rule only to control
when the TWP stops. ``Services'' means any activity in
employment or self-employment for pay or profit or of the kind
normally done for pay or profit (whether or not it is SGA). We
currently consider work to be services if earnings are more
than $200 a month (or more than 40 self-employed hours in a
month). SSA recently proposed this level be increased to $530
per month.
Following the end of the TWP, beneficiaries have a 3-month
grace period before beginning the 36-month extended period of
eligibility. During the EPE, the beneficiary does not receive a
cash benefit in any month earnings exceed SGA. Cash benefits
can be reinstated anytime during this 36-month period that the
beneficiary earns less than SGA and continues to meet the
definition of disability. Currently, Medicare coverage
continues during this period and for three additional months.
At that point, individuals with disabilities can buy Medicare
coverage. Effective October 1, 2000, based on the new Ticket to
Work Incentives Improvement Act, premium-free Medicare is
extended an additional 4 years.
In addition to providing incentives to work, we also refer
beneficiaries with disabilities to their local State Vocational
Rehabilitation (VR) agency, or to other service providers in
the public and private sector who try to help beneficiaries
return to work. In fiscal year 1999, SSA paid State VR agencies
about $120 million for their services provided to over 11,000
beneficiaries with disabilities who worked at least 9 months at
the substantial gainful activity level. Although this was a
record year for reimbursements, we look forward to much more
progress in this area.
Under the Ticket to Work and Work Incentives Improvement
Act of 1999 (TWWIIA), disabled beneficiaries will receive a
ticket that they may use to obtain employment services,
vocational rehabilitation services, or other support services
from an employment service network (EN) or a State VR agency.
The ticket will be assigned to the participating employment
network of the beneficiary's choice, assuming the EN is willing
to accept the assignment. Under the TWWIIA, the number and
scope of available ``rehabilitation'' options for beneficiaries
was expanded to include public and private VR services,
including employment services and assistive technology. All ENs
must meet the qualifications set by the Commissioner.
A purpose of the TWWIIA is to provide disabled
beneficiaries more supports to test their ability to work. In
addition to improving access to services, a disabled
beneficiary using the ticket is not subject to continuing
disability reviews. Thus, disabled beneficiaries receive a
greater opportunity to become self-sufficient without losing
their benefits.
SSI Work Incentives
Some general information about the SSI program is useful to
explain the work incentive provisions as they apply to that
program. The SSI program differs from Social Security in that
the monthly Federal benefit standard (currently, $512 for an
individual and $769 for an eligible couple) is reduced
dollarfordollar by the amount of the individual's ``countable''
income--i.e., income less all applicable exclusions. The result
of this computation determines whether the individual (or
couple) is eligible and the amount of the benefit payable.
SSI law defines two kinds of income: earned and unearned.
Earned income is wages, net income from selfemployment,
remuneration for work in a sheltered workshop, royalties on
published work, and honoraria for services. All other income
(including income received in kind) is unearned.
When determining an individual's countable income,
exclusions are taken for various types of income. There is a
general $20 exclusion, applied to an individual's unearned
income. In the case of earned income, we exclude a portion of
the $20 general exclusion that has not been used, and then
exclude the first $65 and one-half of the remainder of the
earnings. This greater exclusion for earned income acts as a
work incentive for all SSI recipients.
In determining the benefits of individuals with
disabilities, we exclude IRWEs. For these individuals, we
exclude work expenses directly related to the individual's
disability, such as attendant care services, assistance in
travelling to and from work and personal assistance related to
work.
Under SSI we also exclude income saved or being used to
pursue a plan for achieving selfsupport (PASS) that has been
established by a disabled or blind person. These plans are
established to help blind and disabled individuals become self-
supporting by excluding income that is set aside to help the
individual reach a specific occupational goal. In December
1999, there were 1,045 SSI recipients with a PASS established,
although not all of those individuals reported earnings for
that month.
We also encourage self-sufficiency among SSI recipients who
are under the age of 22. Under the Student Earned Income
Exclusion, students can exclude up to $400 of earned income per
month when determining their eligibility. The maximum yearly
exclusion is $1,620. Recently, President Clinton proposed
raising the monthly and yearly exclusions to $1,290 and $5,200,
respectively.
Finally, the laws governing SSI contain provisions that
enable blind and disabled individuals to continue working and
receiving income beyond the limit that would normally result in
ineligibility.
Under section 1619(a) of the Social Security Act, a
disabled beneficiary who would cease to be eligible because of
earnings over the SGA limit (currently $700 a month) can
continue to receive cash benefits until the amount of earnings
would cause him or her to be ineligible for benefits under SSI
income counting rules. Being a recipient of this special
benefit equals being an ``SSI recipient'' for Medicaid
eligibility purposes.
Section 1619(b) provides ``SSI recipient'' status for
Medicaid eligibility purposes for certain SSI recipients. These
individuals have earnings that preclude the continued payment
of an SSI benefit but are not sufficient to provide a
reasonable equivalent of the SSI, social services, and Medicaid
benefits that the individuals would have in the absence of
earnings. For these individuals, the loss of the social service
and Medicaid benefits would seriously inhibit their ability to
continue working.
According to SSA's Office of Research, Evaluation and
Statistics, there were approximately 340,000 SSI disability
beneficiaries (or 6.4 percent) who were working in December
1999. About 70,000 of these individuals were receiving benefits
under section 1619(b). These beneficiaries do not receive an
SSI payment but retain their Medicaid coverage. Almost three-
fourths of those who received this type of SSI benefit had
amounts of earned income below the substantial gainful activity
level.
Ticket to Work and Work Incentives Improvement Act of 1999
Last December the President signed the TWWIIA into law. I
want to express again my thanks to the Chairman and the members
of the Subcommittee for your support in getting the ``Ticket''
passed. This legislation will help individuals with
disabilities who want to work by lessening their fears about
losing health care coverage and income during attempts to work.
It improves and expands their VR choices, providing
enhanced work incentives, outreach activities and new service
structures. Ever since the TWWIIA was enacted, we have been
actively engaged in the hard work of implementing its various
provisions. We again look forward to working with you as the
different provisions take shape and begin to show the results
we anticipate--more people with disabilities entering or
reentering the workforce.
We will be reporting to Congress regularly about the
progress of the TWWIIA program. By December 2002, we must
report to Congress on the adequacy of our payment rates to
employment networks. Over the next six years we must make three
separate reports to the House Committee on Ways and Means and
Senate Committee on Finance evaluating the progress of program
activities, as well as conclusions on whether or how the
program should be modified.
Currently, we are preparing an NPRM package to implement
these provisions. We plan to begin implementing the ticket
provisions in some States in January 2001, distributing tickets
in a staged process through May 2001, with the remaining States
phased-in by January 2004. We are currently accepting
applications from those who want to serve as employment
networks.
The new law requires SSA to conduct demonstration projects
to evaluate the effects of reducing benefits $1 for every $2 of
earnings over a certain limit. Beginning in December 2001,
annual reports to Congress are required on the projects, with a
final report due no later than one year after the project is
complete. Currently, we are in the process of designing the
parameters of the $1 for $2 demonstration projects. Additional
legislation would be required before implementation of these
projects may begin.
Additionally, Congress extended SSA demonstration authority
until December 2004 to allow SSA to explore various projects
that will enable more individuals to return to work. We are
assessing which experiments and projects we shall pursue.
Private Insurance vs. Social Security Administration's
Disability Programs
The SSA disability programs differ from other insurance
programs offered through the private sector in a number of ways
ranging from the definition of disability to beneficiary
characteristics and timing of benefits. However, SSA can still
benefit from lessons learned by these alternate insurance
providers in determining how to further improve its programs.
Private systems often use a less restrictive definition of
disability. Generally, the first definition for disability in
private insurance is the inability to do the person's own
occupation; this makes for a quicker and easier determination.
After six months to two years, the definition extends to any
occupation. SSA must make a long-term, broad-ranging
entitlement determination. Favorable SSDI determinations
normally cannot be changed without demonstrating medical
improvement, while a private insurance determination can be
reversed or discontinued without determining that the
individual's disabling condition has medically improved.
Furthermore, SSA must meet strict requirements for providing
claimants legal due process and for ensuring uniformity across
its national program.
SSA's beneficiaries are on average more severely and
permanently disabled than workers in those other systems and
have significantly lower expected return to work rates. Private
insurers often target policies and services to relatively low-
risk clients such as professional or technical employees. Some
insurers may not offer individual disability insurance to
people in higher risk jobs, or may offer it at a cost to the
employee that is prohibitive. SSA provides benefits to any
eligible disabled worker or low income disabled person and must
accept disabled individuals with high-risk as well as low-risk
profiles for high lifetime disability costs.
SSA tends to serve on average a less affluent and less
educated population than private disability insurance providers
do. As such, applicants under the SSA-administered disability
programs often require greater assistance with the disability
application and adjudication process than do applicants for
private insurance disability benefits especially since the
latter may receive employer assistance in pursuing their
claims. The SSDI and SSI programs must cover individuals with
all types of impairments (pre-existing conditions, mental
impairments, etc.) while private insurers can choose what
conditions they will cover.
One-half of SSDI claimants have been out of work for over a
year before applying for benefits. This is due to a combination
of reasons, such as the availability of short-term insurance
from the employer, the claimant's decision to wait for the
termination of sick leave and Worker's Compensation benefits,
or the claimant's reliance on COBRA coverage. The current
connection with the employer is often broken and sometimes
health insurance lapses. Therefore, some SSDI applicants do not
have complete and current medical documentation of their
disability. Private insurance is frequently associated with an
employer-based benefit program, and documentation of the
medical condition is often available through the employee's
employer-provided health insurer. In some cases, the employer
will assist the claimant in obtaining evidence under the terms
of their insurance coverage. Additionally, there is typically
not an extended period during which the applicant does not have
health insurance coverage.
SSA agrees that earlier intervention, and earlier
identification and provision of necessary return-to-work
assistance for applicants and beneficiaries should be
researched and considered as part of an overall return-to-work
strategy. However, applications for SSDI and SSI are often
months after the onset of the episode. Other than through our
new demonstration project authority, SSA cannot refer
disability claimants for reimbursable VR services until they
are awarded benefits. We agree that earlier intervention to
assist presumably disabled applicants with securing appropriate
return to work services should be researched and considered as
part of an overall return-to-work strategy. How best to
coordinate this with State unemployment insurance, State
temporary disability benefits, and State workers compensation
programs are just some the details that will need to be worked
out.
Conclusion
We want to build on the momentum provided by the enactment
of the TWWIIA and to increase incentives to work for all people
with disabilities. Our commitment is to make every effort to
enrich the lives of all people with disabilities and to help
all those who want to work do so. One of the best ways for SSA
to do this is to continue its active implementation of the
TWWIIA program, including the evaluation of its progress and
our reports to Congress.
We know that return to work efforts must include
coordination with other Federal departments and agencies as
well as the private sector to find new and innovative ways to
encourage work. Solutions to the redesign of the Federal
disability programs require the active involvement of several
Federal agencies, including the Departments of Education,
Labor, the Treasury, and Health and Human Services. On March
13, 1998, President Clinton signed Executive Order 13078,
establishing the Presidential Task Force on Employment of
Adults with Disabilities. The mandate of the Task Force is to
evaluate existing Federal programs to determine what changes,
modifications, and innovations may be needed to remove barriers
to employment opportunities faced by adults with disabilities.
The work of the Task Force will help ensure that national
initiatives identified will receive high priority within
respective departments and agencies.
The private rehabilitation community, private insurers,
consumers, employers and advocates for people with disabilities
can greatly assist SSA in implementing the TWWIIA. We will
continue to look for ways to further enhance the productive
capabilities of disabled beneficiaries with our private sector
business partners.
We look forward to working with the Subcommittee and
Congress to achieve our mutual goal: removing as many barriers
to work as possible and providing as many incentives and
supports as possible to enable people with disabilities to
participate in the workforce.
Statement of American Occupational Therapy Association, Inc., Bethesda,
Maryland
The American Occupational Therapy Association (AOTA)
submits this statement for the record for the hearing on July
13, 2000. AOTA commends the Subcommittee for holding this
hearing in its ongoing efforts to address the challenges facing
the social security disability programs and its recipients.
AOTA supports the notion put forth by the Consortium of
Citizens with Disabilities (CCD) that the original assumption
of federal disability programs was that people who become
disabled would remain so throughout the remainder of their
lives, and that little thought was given to what would happen
if these individuals returned to work after becoming eligible
for benefits. We agree with CCD that disability is a dynamic
condition, evolving in response to advances in technology and
medical intervention, improvements in services and the
expectations of persons with disabilities. Many individual and
policy barriers continue to prevent persons with disabilities
from achieving economic independence through work and work-
related rehabilitation services (such as occupational therapy).
What is Occupational Therapy?
Occupational therapy is a health and rehabilitation service
reimbursed under Medicare, Medicaid, health insurance policies,
the Rehabilitation Act, worker's compensation, and other
programs. Occupational therapy services can help individuals
with disabilities desiring to enter or return to the workforce
to assess their capabilities, to learn skills, and to achieve
success in the work place. Using purposeful activity (or
``occupations''), such as work simulation and conditioning
activities, occupational therapists assess and intervene with
individuals whose ability to function in a competitive work
environment is affected due to physical or emotional illness,
injury or condition. Occupational therapy intervention includes
assessment of functional limitations and capabilities needed to
perform meaningful, productive work.
Occupational therapy practitioners are licensed or
otherwise regulated in every state and territory. They use
their knowledge of the structure and function of the human
body, the effects of illness and injury, and the components of
activity to achieve recovery, to improve functioning and to
increase clients' involvement in productive and other
activities.
Performance areas, performance components, and performance
contexts are the parameters of occupational therapy's domain of
concern.
Performance areas are broad categories of human
activity that are typically part of daily life. For
occupational therapy, these are activities of daily living
(ADLs), including instrumental activities of daily living
(IADLs), work and other productive activities, and play or
leisure activities.
Performance components are fundamental human
abilities that, to varying degrees and in differing
combinations, are required for successful engagement in desired
performance areas. These components are sensorimotor,
cognitive, psychological, and psychosocial.
Performance contexts are situations or factors
that influence an individual's engagement in desired and/or
required performance areas.
Occupational therapy assessment involves examining
abilities in and the relationship between performance areas,
components and contexts. Intervention may be directed toward
elements of performance areas (e.g. dressing, vocational
options), performance components (e.g. strength, endurance,
problem solving) or the environment.
Occupational Therapy and Work Rehabilitation
Occupational therapy contributes to the promotion and
management of productive occupation as well as the prevention
and treatment of work-related disability. Through skilled
observation and evaluation of a person's performance,
occupational therapists can identify a person's interests,
abilities, and needs as they related to general work
performance and to specific job and workplace design.
Appropriate intervention strategies are developed based on the
evaluation results, and are designed to explore and expand work
options, to enhance or develop work-related capacities, and to
obtain or retain employment.
In providing work-related services, including workplace
redesign, work disability prevention, and management programs,
occupational therapy performs several tasks including:
Evaluating the client's work roles and work
performance and the impact of their abilities on performance
Analyze work tasks and the work environment
Collaborate with other team members in
coordinating occupational therapy services
Provide recommendations about adapting work tasks
or environments for the worker and/or employer
When developing interventions, occupational therapists
consider the client's age, interests, values, culture, skills
and abilities, motivation, and psychological and psychosocial
status as well as work role, task demands, work environment,
and available resources. Intervention strategies may include
direct services or consultation to individuals and groups.
Successful return to work can be dependent on many issues
that an occupational therapist is qualified to address,
including looking at the individual's physical and
psychological tolerances essential to appropriate fulfillment
of the vocational planning process, and development of
appropriate work behaviors that will improve retention and
reduce recidivism. For example:
Conclusion
Occupational therapy can be an important component of a
program to enable individuals to return to work, tailoring
rehabilitation, work training, and job modifications and
placement. AOTA stands ready to assist the Subcommittee in its
efforts to improvement federal disability programs to enable
persons with disabilities to have the opportunity to work.
Congress has begun this work by passing the Ticket to Work and
Work Incentives Improvement Act (TWWIIA) last year (P.L. 106-
17). TWWIIA is a major step toward eliminating many of the
existing barriers to work in federal disability programs. We
applaud the Subcommittee for taking the next step and looking
at other barriers to work for persons with disabilities.
Statement of Terri Spurgeon, President, National Association of
Disability Examiners, Lansing, Michigan
Mr. Chairman and Members of the Subcommittee, on behalf of
the members of the National Association of Disability Examiners
(NADE) I want to take this opportunity to thank you for holding
this series of hearings on the problems and challenges facing
the Social Security and Supplemental Security Income (SSI)
disability programs today. Our membership is committed to the
preservation of the disability program and deeply concerned
about the problems we encounter in the administration of these
programs. Those concerns have been described in earlier
testimonies before this Subcommittee and will not be reiterated
here. We would, however, like to address those issues involving
the solvency of the disability trust fund and return to work
barriers and incentives.
The Social Security and SSI disability programs play a
vital role in the lives of millions of Americans. Disability
benefits provide an important safety net for disabled
individuals and their families. However, we believe that the
majority of those who apply for these benefits would prefer to
remain in the workforce. We welcomed the recent efforts of the
Congress and of the Social Security Administration (SSA) to
facilitate and encourage a beneficiary's efforts to return to
work by removing barriers such as loss of medical coverage and
by authorizing and establishing return--to-work demonstration
projects.
Individuals who understand that their claims will be
reviewed at the appropriate time are much more likely to take
advantage of return to work initiatives. We strongly support
SSA's focus on continuing disability reviews (CDRs) and we
appreciate the Congressional initiatives to provide the
necessary funding to conduct these reviews. The public should
be able to expect that the Social Security Administration (SSA)
will administer the disability program in a cost-effective
manner. We believe it is vital that sufficient resources
continue to be made available to permit to become-and remain-
current on these reviews. These reviews are vital because of
the importance they have on the economic security of the
disability trust fund and on the public's confidence in the
disability program. However, while we support the present CDR
initiative, we believe this process would be more effective if
the current Medical Improvement Review Standard (MIRS) were
revised. (A copy of NADE's analysis of this subject is attached
for your review.).
Although time-limited benefits are common in many private
disability programs, and have been proposed as one means to
encourage claimants to obtain appropriate treatment and
rehabilitation to re-enter the work force, we do not advocate
such a proposal for the Social Security or SSI disability
programs at this time. Unlike private insurers and other
disability programs, the programs administered by Social
Security do not award benefits for partial or short-term
disability. By definition, individuals who are awarded Social
Security or SSI disability benefits are unable to engage in any
substantial gainful activity for a period of not less than 12
months. These individuals should be able to expect that SSA
will not terminate those benefits unless there is a change in
their condition that would warrant termination. At the same
time, however, we believe that disability benefits should be
paid only to those who meet the statutory definition of
disability and that individuals who are capable of returning to
the workforce do so. This requires an efficient and effective
CDR process.
The CDR process has not been utilized in the way it was
envisioned. SSA's need to utilize limited funds for more
pressing needs have made it impossible to pursue the CDR
process without the recent special appropriations from the
Congress. NADE firmly believes that if CDRs can be conducted
timely, if genuine errors in decision-making can be corrected
at the CDR level by changes in the MIRS, and if additional
disincentives to return to work can be eliminated, then a
medical review standard can serve both the disabled population
and the general public better than the wholesale changes that
time-limited benefits would entail.
The General Accounting Office, in their July 13, 2000
testimony, noted that, ``In recent years, SSA has piloted
numerous incentives to redesign and thereby improve its
disability determination process.'' NADE has supported these
efforts and many of our members are, or have been, involved in
piloting and prototyping this new process. We would hope that
simplifying and streamlining the process would enhance and
support the current return to work initiatives.
While NADE supports efforts to make the decision making
process more efficient, we do not support change for the sake
of change. It appears that SSA is planning to go forward with
national roll-out of the new disability claims process before
data--including the impact this new claims process has had on
both administrative costs and program costs--has been fully
assessed. Earlier we contacted Commissioner Apfel expressing
both our concerns with and suggestions for national roll-out. A
copy of that correspondence accompanies this testimony.
We would also like to take this opportunity to express our
concern that several of the states involved in the prototype of
the new disability claims process are reporting that hundreds
of claims have been received for which they have yet to
initiate any case development. These claims are sitting
untouched, filed away, until such time that the DDS has
sufficient staff to initiate the required development. This
backlog of cases was created as the DDS's made the required
adjustments to begin processing claims in the new manner
prescribed by the prototype. The DDS's were not given
sufficient lead time or training to prepare for the new
process. These backlogs do not serve the public interest,
improve a claimants potential for return to work, or enhance
the public's confidence in the disability program.
NADE is concerned about the viability and stability of the
Social Security and SSI disability programs and the integrity
of the disability trust fund. We appreciate your willingness to
solicit a wide range of viewpoints and suggestions for
improving these programs. NADE feels honored to be invited to
submit our views and we offer the expertise of our members,
working with the Subcommittee, as a means to achieve that goal.
[Attachments are being retained in the Committee files.]