Can Private Disability Insurance Expansion Fix SSDI Issues?
In SSDI’s eligibility determining process, medical records review is a very important step. This blog examines Headquarters: whether private disability insurance expansion could 8596 E. 101st Street, Suite H 1-800-670-2809 provide cost savings for the SSDI Trust Fund. Tulsa, OKwww.mosmedicalrecordreview.com 74133 Main: (800) 670 2809
The U.S. Government Accountability Office (GAO) recently undertook a study to review three major private disability insurance (PDI) expansion proposals put forth by researchers with a view to address the fiscal condition of the Disability Insurance Trust Fund. The GAO was asked to review the proposals and find out whether expanding PDI could result in potential savings to the Disability Insurance Trust Fund. SSDI or social security disability insurance is administered by the SSA (Social Security Administration) and provides financial and other assistance to disabled, qualifying individuals who are unable to work because of their disabilities. In the eligibility determining process, medical records review is a very important step.
Let us look at the three proposals. David Babbel and Mark Meyer, of Charles River Associates proposed that the federal government should do more to educate employers regarding the value of providing voluntary, employee-paid disability insurance programs. Employers could be encouraged to offer voluntary disability plans on an “opt out” basis. In such a program, the employer puts everyone in a voluntary program automatically. The employees who want to opt out would be required to take to active steps to leave the plan. Heritage Foundation’s Rachel Greszler proposed using a tax credit to encourage employers to provide PDI coverage. This coverage sponsored by the employer would substitute 2 – 3 years of SSDI
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benefits. SSDI would provide benefits only after the disabled employee has used up the employer-sponsored coverage for disability. David Autor and Mark Duggan put forth a proposal that required employers to provide at least 2 years of PDI for all workers. At least 40% of the premiums would be paid by the workers themselves. SSDI would provide catastrophic disability coverage after the 2 years of PDI coverage is used up. All the above 3 proposals say that cost savings is possible for the Disability Trust Fund by expanding PDI. This is possible because once PDI is expanded, workers would be provided earlier access to cash and employment supports. This would in turn reduce the number of SSDI claims, or the length of time SSDI benefits are paid to claimants.
What the GAO Found The GAO’s analysis found that coverage and key features of SSDI and PDI differ in many ways. The main differences include: The number of workers covered Characteristics of covered workers Eligibility Benefits Return to work assistance
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SSDI covers around 96% of workers whereas 33% of workers have PDI coverage through their employers. PDI coverage is more prevailing among workers with higher wages such as those in management positions, and in certain business sectors such as finance. Another difference observed is that some PDI policies may pay benefits for medical conditions that SSDI would not cover. These PDI plans may time limit payments for mental health and musculoskeletal disorders, whereas SSDI does not. Yet again, both SSDI and PDI policies have features designed to help beneficiaries return to work; however, PDI policies may provide such supports more quickly than SSDI. The GAO found certain drawbacks in the abovementioned proposals. None of the 3 proposals provide enough information to evaluate how SSDI enrolment and costs might be affected with an expansion of PDI. The proposals do not give information regarding the type and timing of return-to-work services that would be provided under expanded PDI. They do not take into account the differences in the populations served by the two policies. It is not clear whether cost savings to the Disability Insurance Trust Fund would actually be realized. Stakeholders that the GAO interviewed regarding these proposals pointed out a number of issues about other possible implications of PDI expansion that the proposals do not clearly or completely address. www.mosmedicalrecordreview.com
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o How would expanding PDI affect PDI premiums and what impact would this have on enrolment? o What additional requirements or administrative work would be placed on employers if they were to expand PDI? o Would PDI expansion provide standard services or employee protections that are currently under SSDI, especially regarding PDI expansion proposals that would replace SSDI for 2 years? These findings have left the GAO unsure about the benefits of the three proposals. As the GAO analysts pointed out, they need more information to analyze the proposals and arrive at a solid inference. SSDI offers great support to millions of Americans, with benefits being disbursed on the basis of a fair and unbiased medical record analysis and other formalities. Any measure taken to modify this program can be done only with great caution.
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