Trends Behind Growing Disability Claims in Kentucky

By John Gregory | 12/09/17 8:00 AM

There’s been a dramatic spike in the number of American receiving disability benefits in the last 35 years thanks to a combination of changing demographics, a volatile economy, and court and legislative actions.

Between 1980 and 2015, disability awards to children and working-age adults increased by more than 200 percent nationally, according to a recent report from the Kentucky Cabinet for Health and Family Services. In the commonwealth, disability enrollment rose by nearly 250 percent.

KET’s Connections explored the factors fueling that increase and what state officials think could be done to ensure that the neediest individuals receive the assistance they need. The guests were Commissioner Bryan Hubbard of the Department of Income Support at the Kentucky Cabinet for Health and Family Services, and Dustin Pugel, a research and policy associate at the Kentucky Center for Economic Policy.

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Why Disability Claims Increased
America’s social safety net dates back to New Deal and the passage of the original Social Security Act in 1935. In the 1950s, lawmakers added Social Security Disability Insurance (SSDI) to support working adults who suffer a serious mental or physical impairment that prevents them from holding a job. In the 1970s, a new program called Supplemental Security Income (SSI) added payments to the aged as well as child and adults who are blind or disabled.

Cabinet for Health and Family Services Commissioner Bryan Hubbard says disability filings started to sharply increase in the mid-1980s. That’s when Congress passed revisions to the Social Security Act that relaxed standards that would’ve required more stringent, objective medical diagnoses to become eligible and made enrollment in disability easier.

Then in 1990, a U.S. Supreme Court ruling changed how children would qualify for disability coverage under SSI. Hubbard says instead of having to obtain a specific medical diagnosis of disability, children would only have to display a functional limitation stemming from a disability.

A final factor contributing to the increase in disability claims arrived with the financial crisis of 2007 and 2008.

“During the last recession we had a significant number of workers, primarily those aged 50 and older, who were essentially offloaded into the Social Security disability system,” says Hubbard. “They were the workers who were of long-tenure, of higher pay, and deemed to be of long-term financial cost to those institutions who handed them the pink slips first when the financial meltdown occurred.”

The result, according to CHFS report on Social Security in Kentucky, is astounding growth in the number of people on disability. Between 1980 and 2015, those receiving SSDI and SSI grew by 211 percent nationally, and by 249 percent in the commonwealth.

“These are rates of growth which are exponentially larger than what our organic population growth has been,” Hubbard says, pointing to overall population growth in the U.S. of 42 percent, and 21 percent growth in Kentucky.

Disability and Older Workers
Dustin Pugel of the Kentucky Center for Economic Policy says some of the spike in SSDI claims could have anticipated because of changing demographics. He says with each decade of age, a worker is twice as likely to experience a disabling injury.

“So folks especially in the 50-64 [age] range… are at a higher chance of having a disability,” says Pugel. “And in the last 20 years, the Baby Boomers have aged into that category.”

Employers and employees pay into the SSDI program. To qualify for SSDI, the individual must have worked a quarter of their adult life or for five of the last 10 years. Pugel says the qualifying disability must impede an individual’s everyday activities or create the likelihood of death with five years.

Hubbard says more than 330,000 Kentuckians qualify for SSDI, and 95 percent of them will never return to productive work. He contends that has contributed to a host of other problems, especially for older adults going on disability.

“They lost their jobs, in many cases they lost their homes, and they lost everything that they worked to earn,” he says. “In return the policy solution was filter them to the Social Security disability program, which gave them a poverty check, a medical card, [and] a prescription for some pain pills.”

“The increase in dependency has fueled every problem that we have in this state when it comes to the drug-driven breakdown of families and communities,” Hubbard adds.

There is some room for hope, though. Pugel says the number of individuals on disability peaked in 2011. It’s now on the decline as those who earned SSDI age out of that system and convert to traditional Social Security retirement benefits, or as people have left SSI because they gained more income with the improving economy.

Individual Fraud Or Systemic Dysfunction?
Some politicians like to claim there is rampant fraud and abuse in entitlement programs. But Pugel say that’s not an issue for SSDI and SSI. He says fraud rates are actually very low for both programs despite high profile cases like the one involving Eric C Conn, a disability attorney in eastern Kentucky who pleaded guilty to defrauding the government out of more than $550 million.

“I think he did a lot to really damage the image of these programs that are really helpful to people who need it,” Pugel says.

“It’s actually really hard to get on disability insurance,” he adds. “Only 28 percent of applicants ever get on it, and the criteria is really exacting.”

And even those who do become eligible for the supports aren’t getting wealthy, according to Pugel.

“These benefits are very meager but important,” he says. “For SSI the benefits are about half of the poverty level and for SSDI they are right at the poverty level, so they really are not something that most folks can live off of. They’re really just to help get by.”

Instead of individual abuse of the system, Hubbard sees bigger, more bureaucratic influences at play in the growth of disability payments.

“They are driven by a systematic, premeditated expansion of the entry portals by the federal government, and the creation of a system that often functions like an apparatus of state-sponsored suicide, anesthetizing and euthanizing its dependents, a disproportionate number of whom are either young, poor, or both,” he says.

In looking to the future, Hubbard says the disability system should be refocused on objective, medically based models that give the genuinely disabled the benefits they need. Everyone else, he says, should be directed to programs that will retrain for other work in available jobs that they could physically perform. He says that will help break the cycles of poverty and long-term unemployment, alleviate the drug crisis, and improve the state’s economy.

“There’s no reason that we shouldn’t be able to expound, at every level of our government, the value that goes into a person’s autonomy, worth, and their ability to contribute to their community by being a productive citizen,” Hubbard says.