The Social Security system is choking on paperwork and spending millions of dollars a year screening dubious applications for disability benefits, according to lawsuits filed by whistleblowers.
The lawsuits say insurance companies are the source of the problem, forcing many people who file disability claims with them to also apply to Social Security, even those who clearly do not qualify for the government program.
The Social Security Administration defines disabled much more stringently than the insurers generally do, so it rejects most of the applications, at least initially. Often, the insurers then tell their claimants to appeal, the lawsuits say, raising the cost.
The insurers say that requiring a Social Security assessment is a standard practice and that there is nothing wrong with it. The policies they sell allow them to coordinate their benefit payments with others to make sure no one is paid twice. Thus, if a disabled person can get benefits from somewhere else - such as workers' compensation, a disability pension or Social Security - the insurance company can reduce the benefit check by that amount.
The flood of referrals makes it hard for Social Security to respond to people who are truly disabled, said Kenneth D. Nibali, the former top administrator of the Social Security disability program.
"Anybody who is forced to come into this system and who doesn't need to be there is affecting someone else," said Nibali, who retired in 2002 and is an expert witness for the plaintiffs. "They're holding up cases for the people who have been waiting for months and years, who in many cases are much worse off."
The disability program is in much worse shape financially than the old-age portion of Social Security. It is projected to run out of money in 2026, 16 years before the old-age trust fund reaches that point.
The disability caseload is expected to grow as the work force ages, because recovery time increases with age. The number of people waiting for hearings on their claims by an administrative law judge has more than doubled since 2000, and the average wait has grown to 512 days in that time, from 258 days.
Social Security is based in Woodlawn, where the agency has more than 6,300 employees. It has 12,000 employees in Maryland.
