You may already have seen the intriguing NPR report on Social Security disability claims, “Unfit for Work: The startling rise of disability claims in America.” The report details the surge in claims to the Social Security disability program over the past several decades, attributing it to an aging workforce that, in many cases, is displaced and turns to government programs when blue-collar jobs are eliminated.
On its own the NPR package is a gold mine of business story nuggets, for while it concerns a public program, it’s also a workforce/workplace/careers (or lack thereof) story. It also touches a lot of players in private practice, like the doctors who make a living by certifying people as disabled. (I took note of the author’s comment about the seeming randomness of the “disability” label; as she remarks, many thriving and productive employees work despite painful conditions, while others seek to be out of the workforce.) Also observe that disability claims rise and fall with the unemployment rate; the programs are a refuge for people who seem to have nowhere else to turn. In one Alabama county, the author reports, one in four adults is receiving disability payments.
If you want to emulate the NPR report, take a look at this July 2012 publication by the Social Security Administration. It’s the annual statistical report on the Social Security Disability Insurance program and the 191-page (PDF) full report is a trove of data including benefits by state, diagnosis, demographics and so on. It also includes information about benefits to claimants families, disabled people who work and other circumstances.
Meanwhile, you can also take a look at business angles related to disability insurance. In addition to SSDI, private insurers such as the well-advertised Aflac offer policies through employers that will pay a range of benefits to workers who are injured, sick or otherwise unable to clock in. Talk with major employers in your area, HR consultants and insurers about trends in claim levels, types of claims and demographics. Also ask about trends in what employers offer and the out-of-pocket cost to workers. Here’s a recent report from the Council for Disability Awareness, an industry group representing insurers; it’s fairly rich with detail about trends in claims. Note that claims in 2011 were $9.3 billion, up 2 percent over the previous year, which employers attribute to the economy. So are they, too, conceding that many employees are using disability as a refuge from unemployment?
Mental disorders as a source of disability are rising, and claims by women and workers over 60 are rising, according to the report. Also, while down in 2011, claims for “infection and parasitic diseases” have been going up; what’s behind that?
You can add a personal finance sidebar explaining the various types of disability insurance (long-term, short-term, public, private, workers compensation) — be sure to have a CPA weigh in on the tax consequences because the income-tax liability for each type of policy does vary.
Who besides claimants makes money from disability insurance claims? Attorneys, for one — note in the NPR story that one firm, Binder & Binder, reaped more than $68 million in fees for representing disability claimants. I’m sure you can find similar players in your area; how is the disability income split between law firm and claimant, and what other costs are there for people who hire such representation?
And, since this is a topic that always raises the specter of fraud, why not take a look at spin-off business for investigators and attorneys related to false disability claims? I readily found large, multi-state investigatory firms that specialize in this niche; how about a business or career profile? The International Association of Special Investigation Units, a professional society, offers a list of state chapters that might be able to provide you with leads to disability fraud specialists.