Disability Distress

SSA has two programs for providing financial assistance to those with disabilities. The disability program is the largest, funded with money collected from payroll taxes. Only workers who have paid into the Social Security fund are eligible for the benefit. In fiscal 2002, the agency will pay more than $62 billion in benefits to 7 million disabled workers and their families, an average of $755 per month. The second program, Supplemental Security Income, is a financial assistance program for aged, blind or disabled individuals whose income falls below a certain threshold. In fiscal 2002, SSA will pay $31 billion in SSI benefits to about 6.4 million people. In contrast, SSA will pay $384 billion in retirement benefits.

Many have questioned how disability programs are administered. Congress established the first disability benefit in 1954. With the expectation that it would be a small program, Congress gave the federal government responsibility for funding and regulating the program, but gave state agencies responsibility for making benefit decisions. As the program has expanded, federal and state governments have assumed overlapping roles with no one clearly in charge. "The state agencies take our money and follow our rules, but they have no qualms about saying they don't work for us," says Ken Nibali, SSA's associate commissioner for disability.

People seeking benefits must apply at an SSA field office. The field office forwards claims from applicants who meet eligibility criteria to a federally funded state agency, known as the Disability Determination Service, for approval. Once claims are approved by the state, the state notifies SSA and the agency distributes monthly benefit checks.

The appeals process for rejected claimants has caused the most criticism. Claimants who have been turned down can be reconsidered by the state agency. If the state agency rejects the appeal, the case moves to the federal level, where an SSA administrative law judge hears the case, usually with additional medical evidence. For claimants turned down by an SSA judge, the last option before filing a federal lawsuit is to seek benefits from the SSA Appeals Council. The three appeals processes can take months, if not years. A recent report by the General Accounting Office (GAO-02-322) called the current disability benefits process "complex and fractured." Nearly 75 percent of rejected claimants appeal. About two-thirds win.

Over the past decade, SSA has proposed disability reforms-including giving state disability examiners more authority and reorganizing administrative hearing staffs at SSA-to create a more consistent review and appeal process. GAO estimates the agency has spent more than $100 million since 1994 on disability reforms, but the results have been disappointing and, in some cases, have increased costs and added to delays.

Doug Willman, who heads Nebraska's Disability Determination Service, says reforms failed because SSA did not seek input from front-line state workers or develop a realistic vision for disability programs. He says SSA needs to offer more training and more consistent policies at both the federal and state levels so that decisions are not regularly reversed upon appeal. "The SSA people involved with the day-to-day taking of disability applications, determining eligibility and getting the right check to the right person do an excellent job. When we get out of the day-to-day and think about planning and strategic management, SSA has not done well," Willman says.

At her October Senate confirmation hearing, Social Security Commissioner Jo Anne Barnhart said it is unacceptable that it can take two or three years to settle disability claims. She said one of the goals of her initial review of SSA programs would be to determine a reasonable time for settling claims and the amount of resources the agency needs to resolve them.