Academic journal article Social Security Bulletin

Trends in the Characteristics of DI and SSI Disability Awardees and Duration of Program Participation

Academic journal article Social Security Bulletin

Trends in the Characteristics of DI and SSI Disability Awardees and Duration of Program Participation

Article excerpt

Trends in the Characteristics of DI and SSI Disability Awardees and Duration of Program Participation by Kalman Rupp and Charles G. Scott*

We analyze the effects of trends in the age and diagnostic mix of new disability awardee cohorts from 1975 through 1993 on expected duration on the Disability Insurance (DI) and Supplemental Security Income (SSI) rolls. The 1975-93 shift toward younger awardees is estimated to increase duration by 1.4 years for DI and about 5 years for SSI. Much of the increase in SSI duration is attributable to the recent influx of childhood awardees. For workingage adults, the DI and SSI trends are comparable. We also estimate that about half of the 1975-93 increase in DI duration is explained by the increase in the proportion of younger DI-insured workers. During the 1993-2006 period, the effect of changes in the age mix of DI-insured workers will be reversed. This will moderate, but not eliminate, likely upward pressures on caseloads arising from the anticipated rise in incidence rates and the future effects of past increases in expected duration.

Discussions on factors causing the increases in Social Security disability caseloads usually highlight the rise in the number of awards. Changes in the number of new awardees, however, do not directly translate into caseloads; duration is the essential link. Those who stay on the rolls for a long time contribute disproportionately to caseloads, and therefore to program cost. The best currently available estimates suggest that the lifetime average stay during the preretirement years (prior to age 65) for the Social Security Administration's (SSA's) Disability Insurance (DI) program is 9.7 years and for the Supplemental Security Income (SSI) program is 10.5 years (Rupp and Scott 1995). Actuarial estimates (Wilken 1986) show that such long disability stays on the rolls are associated with substantial lifetime benefit outlays. According to Wilken's study, in 1985, the present value of DI and Medicare benefits was $35,247 for males aged 60, and $118,525 for males aged 30. These dollar values have substantially increased during recent years.

This article provides an overview of the factors affecting duration on the DI and SSI disability rolls based on previous studies and original research by the authors, and analyzes implications for caseload growth, projections, and policies. A better understanding of factors affecting duration on the disability rolls should improve our ability to project future caseloads, to assess the effects of policy alternatives on caseloads, and to identify promising interventions designed to contain caseload growth. Duration on the rolls can be seen both as a function of factors affecting selection into the DI and SSI disability programs, and as the result of factors directly affecting program exits and reentry. Selection into the disability programs is affected by the disability and economic criteria of eligibility. The programs share the same disability selection criteria. The severity of disability criteria exerts two contrasting effects on duration: The relatively high mortality risk reduces expected duration, while low recovery associated with severely disabling conditions increases it.

DI and SSI differ in terms of economic eligibility. DI requires that the person meet an insured status based on recent work activity. Importantly, while the DI-insured status is a precondition of entry, it does not affect exits from the rolls. In contrast, SSI is means tested, and therefore financial eligibility factors (changes in income and assets) form a potential source of exits and reentry. Some people qualify for both DI benefits and SSI payments. Over the years, the disability and economic eligibility criteria of DI and SSI interact with largely exogenous demographic and economic factors that influence duration.

Programmatic variables also directly affect duration by influencing exits and reentry. Such variables include workincentive provisions, continuing disability reviews, vocational rehabilitation, various rules concerning suspensions, terminations, and return to the rolls. …

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