14 million Social Security disability applications were denied in a single decade, between 2000 and 2010, while the percentage of denials escalated from 34 percent to 65 percent. Is this the wrong time to be disabled in America?
Note the following headlines:
Federal Disability Traffic Jam The Washington Times
Soldiers risk ruin while awaiting benefit checks Associated Press
Disability Claims can be tough to collect Wall Street Journal
It’s time to stop billions of dollars of disability benefits from being denied, unnecessarily.
Does the Disability Safety Net have holes in it? If more than 60 percent of Social Security disability claims are denied initially, then why are 63 percent approved at the hearing stage? What causes the turn around? Unfortunately 39 percent of claimants give up before determining if they would be successful going through the appeal process!!
1.2 million Social Security Disability applications were filed in 1999 (48 percent of 579,000 were declined). In 2009, ten years later, 2.8 million Social Security Disability applications were filed (and 65 percent or 1,830,530 were declined). The number of disability applications more than doubled while denials more than tripled. In one year, more than $23 TRILLION dollars of annualized benefits were lost. That’s 1.8 million Americans who won’t collect benefits they thought they were entitled to.
Based on the 2010 average payment to those who qualify, that represents more than $19.5 million of monthly benefits that won’t be paid. Annualized, $23+ trillion dollars per year is an overwhelming amount of disappointment.
Many initial disability claims are denied for simple mistakes and omissions which have absolutely nothing to do with the claimant’s disability status. Think about what it is like to wait 17 months to hear you didn’t answer one question. Then you can wait another 17 months after you’ve added one simple answer. There must be a better way. Those facing claim denials are filing an unprecedented number of appeals burdening the already damaged system even more. With an average of nearly 17 months waiting for a judge to hear their appeal, what’s happening in the meantime?
Currently there’s three-quarters of a million Americans stuck in the Social Security disability backlog. Not being able to pay their bills causes the man of the house enormous mental anguish. The state of marital relationships in these situations deteriorates rapidly. Soon our divorce courts will be experiencing the same type of backlog the Social Security Administration is now facing.
Is this the wrong time to be disabled in America? Tens of millions of dollars in disability benefits go unpaid by private insurers. Over 40 states jointly investigated how one insurer handles their disability claims. Another state set up a system to scrutinize the handling of every rejected claim. What led to the dramatic change in the handling of disability claims? Or has anything changed at all and there’s just more adverse publicity?
As reported in USA Today… 22,500 Veteran’s PTDS disability claims denied as personality disorders. How is it possible that a personality disorder, assuming it existed prior to military service, is diagnosed when psychological evaluations aren’t done prior to induction?
According to the data obtained through the Freedom of Information Act, more than 25 percent of Iraq and Afghanistan vets seeking care at the VA have PTSD. And this statistic doesn’t include the mentally ill vets who haven’t had treatment at the VA due to the stigma associated with PTSD. In the meantime, families go on welfare and food stamps. Homes are being foreclosed. Drugs and alcohol disrupts any hope for family harmony. Homelessness occurs! Suicides begin to take lives that the battlefield didn’t.
One very simple yet insurmountable obstacle is the application process itself. The VA has a long history of bureaucracy. The disability claim form itself is a 23 page document. How many vets are accustomed to 23 pages of paperwork? The word “intimidation” comes to mind as a reason many veterans will never file a claim. A claim for benefits they were eligible for.
Each year TRILLONS of dollars in Insurer, Social Security and Veterans Administration disability claims WILL continue to be denied. It’s imperative the claimants understand how to correctly file a Long Term Disability claim, “doing it right” the first time and dramatically improving the likelihood of collecting benefits.
The U.S. Census Bureau recently projected a 75 percent increase in the age 65+ population by 2030. That will increase the number of age 65+ Americans to 69 million, more than 20 percent of the entire population. An aging population brings with it an automatic growth in the disability “TSUNAMI”. Since the Americans with Disability Act forces disability insurers to continue disability coverage to those over age 65, an older workforce guarantees more claims.
We haven’t seen any valid creditable source that has identified any reason for the escalating rate of claim denials or what we’ll call disability claim “deterioration”. Hence, I can offer what I believe is happening in the backrooms of the insurers claims departments.
Americans currently face the highest unemployment level we’ve experienced over the last three decades. The current state of the economy has impacted our American workforce in disastrous proportions. There’s a natural escalation of disability claims incidence with increasing unemployment.
Mortgages are being foreclosed at an unprecedented rate. Several states have begun to deny previously valid claims as Medicaid budgets have become overwhelmed. Is it any wonder that the cost of medical care, and not being able to pay for it, is the largest cause of mortgage foreclosures?
To continue, we now have causes of disability that didn’t exist two decades ago. Carpel tunnel and chronic fatigue syndrome are being diagnosed more than at any other time in our history. When we add fibromyalgia to the new list, we have an evolving problem that’s creating a nightmare for the disability insurers. These are known as “self reported” disabilities in that there’s no specific medical testing that can diagnose these conditions. It’s easy to understand how disability claim examiners can mistrust “self reported” symptoms. This makes it an onerous process for those who are truly adversely effective by one of these conditions from collecting benefits they’re entitled to.
In summary, we now face a dramatic increase in the 20 percent of the population in an older age group. They’re still working with an increasing incidence of disability. Unemployment compounds the problem even more. And adding new causes of disability and our litigious society results in more PROMISES UNKEPT.
Allan Checkoway’s career includes more than 30 years in the health care insurance field, and a specialty in the brokerage placement of disability and long-term care insurance coverage. Allan is the author of ‘Disability Income: A How To Guide’, published by R & R Newkirk, and ‘Disability Income Insurance’, published by Kaplan Publishing. His articles have been featured in the Wall Street Journal, Legal Economics, Lawyers Weekly, Journal of Financial Planning, National Underwriter, Health Insurance Underwriter, Life Association News, Advisor Today, ProducersWEB, and other professional trade journals.
Allan is Past President of the Disability Insurance Training Council and has received the National Association of Health Underwriters’ Norma Medill Award for Journalism. He served as Regional Vice President of the National Association of Health Underwriters and has been a frequent speaker at the Million Dollar Round Table.
Allan’s newest publication ‘Getting Paid’, a disability benefits resource manual is scheduled for publication December 2011. Allan shares Insider Tips on how to correctly file a Long Term Disability claim, dramatically improving the likelihood of collecting benefits. His new publication was developed to help the multitude of disabled Americans learn ho