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Social Security Status Update 2017

The 2017 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds set forth the following findings through the end of 2016:

    • The Fund was providing benefits to 11million disabled workers and dependents
    • Total expenditures were $922B while income was $957B
    • “Asset Reserves” in the form of U.S. Treasury Bonds increased from $2,813B to $2,848B. These projected reserves are expected to increase to $3,000B by 2022 and be depleted by 2034
    • Social Security’s total income is projected to exceed its total cost by 2021
    • The Disability Trust Fund has projected income to cover expenditures for the next 10 years
    • The Disability Trust Fund is projected for depletion in 2028 as a result of increasing disability payments with the entire social Security Trust Fund depleted by 2035

These estimates take into account many estimated future variables including life expectancy, disability incidence/termination, employment, gross domestic product, immigration, interest rates, among others. For this reason, the dates and estimates will be revised time and again over the years.

Here is the rub that you of which you must be aware. The government routinely withdraws funds from the Social Security Trust Fund to pay for daily operations. In return, it issues “IOUs” in the form of U.S. Treasury Notes. If these notes were to be redeemed to fund the Social Security Trust Fund, it would require the government to borrow money to supply the needed money. This action would, in turn, necessitate issuance of bonds for purchase which will increase the national debt substantially. The national debt at the time of this writing was $13.6T. The redemption of the Treasury Notes issued to the Social Security Trust Fund would increase this by $2.8T or 22%. Such an enormous debt increase would have repercussions throughout the U.S. economic system in terms of dollar valuation, credit rating, etc.

The most important take away from this discussion is the pressing need for action by the United States Congress. The “kick the can down the road” approach and avoiding the proverbially “third rail” of politics in addressing the impending shortfall in the Social Security Trust Fund is irresponsible.

Unfortunately, there are clear political lines drawn by the parties. Republicans wish to restrict benefits and make eligibility harder whereas Democrats prefer to create funding (through taxes of some type) to insure the Fund’s solvency. Until there is some actual cooperation between the parties, there will be means to address the situation as neither party wants to be solely responsible for changes to the current system due to the political liability inherent in doing so.

Posted in Social Security |

 

Social Security Disability Case Hearing Delays 2017

FACTS

Hearings were postponed in 8 – 9% of the cases in 2012 – 16.

The hearing no-show rate for claimants in 2016 was 9%.

No relationship has been found between hearing scheduling and no shows/postponements. It has been attributed to the transient nature of claimants and limited staffing for providing follow-up hearing reminders. In addition, hearing offices with low no show rates have a low number of unrepresented claimants.

76 days elapsed between hearing scheduling and hearing held date in 2016. In 2017, the notification requirement was increased from 20 days to 75 days before the actual hearing.

A Pre-Hearing Conference Expansion pilot program initiated in January, 2016 was discontinued in January, 2017 due to a decision-writing backlog before it could be determined if the program had an effect on reducing no show/postponement rates.

Recommendations from SSA to reduce delays caused by no shows and postponements include:

∙ Using stronger language in the hearing notice so claimants understand that a failure to appeal at the hearing can result in a forfeit of the right to a future hearing

∙ Put the burden on claimants to notify SSA of address changes and create a presumption that failure to do so is evidence of their lack of interest in pursing the claim

∙ Making sure the SSA system incorporates changes reported by field offices

∙ Require claimants to decide if they want a representative before a hearing is scheduled

∙ Give administrative law judges the authority on reporting claimant representatives who are not taking responsibility for representing claimants (appearing at hearings while unprepared)

∙ Ensure sufficient staff hiring

Unfortunately, the Office of the Inspector General failed to address the main cause of no shows and postponements: the huge delays inherent in the Social Security disability claims process. These ridiculous delays, requiring persons to wait up to two years to have a hearing, result in undue hardships to claimants. During the waiting period, it is common for claimants to lose their homes or move their residences on multiple occasions due to a lack of funds to pay for these. In the process, contact with SSA and claims representatives are lost, resulting in a great number of no-shows and causing postponements. Of course, rather than take responsibility for the cause of the problem, SSA proposes solutions which either blame the claimant or the representative.

Posted in Social Security Disability Benefits | Tagged , , , |

 

An Overview of Social Security Disability Benefits (2017)

There is constant mischaracterization concerning Social Security Disability recipients who are often disparaged as being “too lazy” or “unwilling” to work. The facts reveal a much different reality.

By 2015, there were more than 10 million disabled persons were receiving Social Security Disability benefits. This is decreasing with the aging out of the Baby Boomers into retirement age. This decline began in September, 2014. Any overall rise in applications is a result of the aging population in the United States as 25% of the population is composed of Baby Boomers, the older of whom are in or entering their retirement years.

The annual number of disability awards rose to the highest level so far in 2015 with 839,429, of which 741,478 were disabled workers and the remaining were children and widows.

The final award rate for disabled worker applicants was 35% with 23% awarded at the initial application, 2% at reconsideration, and 10% at hearing. Denied disability claims average 61%.

The average Social Security Disability recipient has worked 22 years before receiving benefits.

8.1 million persons received Social Security Disability, 3.5 million receive Supplemental Security Income, and 1.3 million received both types of benefits. This accounts for only 16% of total benefits paid.

It is estimated that one in four twenty-year age persons will become disabled before reaching age 67.

67% of the private workforce does not have long term disability coverage other than SSD.

31% of workers report having no savings set aside specifically for retirement.

There are currently 2.8 workers for each Social Security beneficiary which will be reduced to 2.2 by 2035.

The average Social Security Disability check is $1170/month.

Many SSD recipients are terminally ill with 1 in 5 males/1 in 6 females dying within 5 years of receiving benefits.

Most SSD recipients who wish to work to supplement their income only have work capacity to earn a few thousand dollars per year.

There is no widespread fraud in the Social Security Disability approval system with studies finding an allowance decision error rate of only 0.6%.

For these reasons, those advancing the argument that too many undeserving persons are receiving Social Security disability are clearly not knowledgeable of the facts.

Posted in Social Security Disability Benefits | Tagged , , |

 

Why Disability Insurers Pick on Older Workers

Picking on older folks is not just for families and friends anymore. Except, when it is done by disability insurers, the consequences are far more severe.

In general, people are not lizards. We degenerate and do not regenerate. For that reason, most disabling conditions become worse as the aging process proceeds. The insurers act as if this simple fact just does not exist.

Add to this the problems that older workers have obtaining new employment. Regardless of their experience in their respective fields and prior dependability, older workers are commonly viewed as being greater liabilities in terms of increased health care costs, safety concerns, lacking mental flexibility, age-related productivity concerns, and inability to work with younger workers. Further, employers are faced with older workers whose skills have become obsolete and are reluctant to invest in training them. Older workers require extended training as compared to their younger counterparts who tend to learn quicker. This is particularly difficult in an era when many industries are undergoing rapid technological change. Again, disability insurers just invent their own logic which runs contrary to reality.

So, what do disability insurers do? They deny claims for older persons who are making new claims or have been on claim for years. This is done on purpose as it is nothing more than a numbers game. The disability contract only pays to retirement age (ranging from age 65 – 67). So, the insurer will only be liable for a few more years of disability payments at the most. This provides only a small sum by which to decide whether to hire an attorney to fight for the benefits. Many times, the amount is low enough as to preclude contingency fee interest for most attorneys since ERISA-governed benefits are not eligible to sue for compensatory or punitive damages. This gives insurers a distinct advantage and a savings mechanism. Fewer paid claims increases their profit.

Moreover, most of these older claimants are receiving Social Security Disability and are eligible to receive retirement account payments. The other sources of income serve as disincentives for these workers to fight for their private disability payments as they do not wish to be bothered with a legal battle.

We have represented older workers in many of these cases and take insurers to task on these issues. It is patently unfair to treat older worker claims in this fashion. Insurers have a lot to answer for if the case is prepared correctly and all the disability issues are covered. For this reason, you need an experienced disability benefits attorney who is willing to go to court in these cases. It is important to ask about an attorneys experience and court record in advance before making this important decision.

Posted in General Disability Issues | Tagged |

 

So, How Good Are the Decisions Written by Your Administrative Law Judge

In March, 2017, the Office of the Inspector General (OIG) for the Social Security Administration (SSA) issued a report which addressed the quality of decisions issues by administrative law judges (ALJs) following Social Security hearings.

As a preliminary point, the Appeals Council (AC) routinely monitors cases in which ALJs approve benefits in order to verify the quality of the written decision. Denials which are appealed to the AC are automatically reviewed as part of the appeal process following an appeal from an ALJ hearing denial.

SSA has been tracking “decisional quality” since 2014 which is defined as whether the Appeals Council agrees with ALJ benefit approval decisions. Prior to this report, ALJ decisions were approved 85% of the time, the previously set “agreed rate average.”

The current report details that 310 ALJs do not meet with agreed rate average. Worse yet, 27 ALJs had agree rates below 65%. Corrective action has been undertaken on only a handful of these ALJs

Even more disturbing is the fact that 10 Hearing Offices had decision agree rates below the established norm. No action is being taken concerning the particular offending Hearing Offices.

These are imperfect findings as denied claims must be appealed to the Appeals Council for review to be considered. For this reason, less than 25% of all ALJ decisions are eligible for consideration.

There is a separate review mechanism for dismissal denials. These are cases which are dismissed for technical reasons for which no hearing his held. The dismissal “agree rate” is only 72% , meaning that 28% of dismissals are expected to be done improperly. This is of little surprise as dismissals are routinely used by many ALJs as a means of adjudicating claims in an expedited and often unfair manner. Given the technical nature of the denials, a very high agree rate should be established. But, this would not allow SSA to resolve its backlog of approximately one million cases as quickly.

Due to the limited information provided by reviewing less than 25% of decisions, most of which are not claim denials, OIG has recommended that national agree rates for denials should be established and monitored. SSA has agreed with the recommendation.

This agreement is surprising, but this counsel remains dubious. Nearly 20 years ago, SSA announced its initial review program which included only favorable decisions. At a national conference, this counsel asked a high ranking SSA employee why denial decisions were not routinely reviewed. No answer was forthcoming. It can only be hoped that the culture at SSA has evolved to the point of acknowledging that many of its ALJs use improper “denial formulas” in writing their decisions which would not pass muster if reviewed by the AC.

At the present date, only 44% of hearings result in a granting of disability benefits. It is time the high 56% case denial rate attracts attention and requires review of claim denial decisions.

Posted in Social Security Administration, SSA |

 

Challenges and Concerns at SSA – Fall, 2016

The good news at the Social Security Administration (SSA) is that more hearings are being scheduled, coming close to the rate of hearings going on three years ago before the great slowdown resulting in a backlog of over one million hearing level cases.

Obviously, allowing delays to where one million hearing cases exists is a national disgrace. Most of the persons waiting for hearings are citizens who paid into the Social Security system throughout their work lives. At a time when an estimated 63% of Americans cannot afford an unexpected bill of $500, it is a given that waiting for a hearing for one to two years will result in bankruptcy, loss of homes, loss of cars, and, in more cases than it should occur, loss of a supporting spouse. Putting citizens through financial misery in order to receive a relatively small monthly benefit is reprehensible. In 2016, the average monthly benefit is $1,116 with a maximum benefit of $2369 for top wage earners. No one is “living large” on Social Security disability benefits.

But, of course there remain challenges to the system which are preventing SSA from clearing the hearing backlog. The first problem is the ongoing concern of Congressional funding. As it stands, the SSA allotted budget is insufficient to fund ongoing operations without up to two weeks of furloughs for employees during which time all offices would be closed to the public. Further, a full hiring freeze would be instituted resulting in service degradation as well as increased wait times and system delays. This would only put more hardship upon this nation’s most vulnerable citizens.

The budget problem is long simmering in nature with its budget shrinking 10% since 2010 while beneficiaries have increased 12%. The current fight concerns President Obama’s request for a $522M in increase in funding for 2017 while House Republicans have countered with a $772M cut in funding including a spending reduction of $582M.

Further, Acting SSA Commissioner Carolyn Colvin has been in her position since 2/13/13 without ever being installed as in the position of full Commissioner of SSA. House Republicans are responsible for this inaction as well.

Not all the blame goes on the GOP. A substantial number of administrative law judges (ALJs) have become discontented with SSA’s requirement that they schedule 50 hearings a month in order to increase processing of cases and clear the immense backlog. Some ALJs have taken the approach of scheduling 50 hearings a month, then continue many cases for invented reasons such as needing additional evidence, allowing a vocational evidence to review new evidence, ordering a consultative examination, among other excuses. This conduct reduces the number of cases for which decisions are rendered. Further, when the delayed cases are rescheduled, the are again counted toward the 50 cases of the subsequent month. In this way, ALJs are passively resisting doing more work in order to reduce the hearing backlog.

For these reasons, it is clear that SSA faces challenges from outside and within which will prevent the clearance of the one million case backlog for any time in the forseeable future.

Posted in Social Security Administration, SSA | Tagged , , |

 

Social Security Funding Status 2015

The Social Security Administration (SSA) has reported concerning the funding status for its programs for fiscal year 2015.

The good news is that the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, the same as projected last year. Once depleted, persons receiving benefits will have their benefits automatically decreased to 79%. On its own, the Disability Insurance Trust Fund will become depleted in 2023, extended from last year’s estimate of 2016 with 89% of benefits remaining payable after depletion. As it turns out, the asset reserves for the OASDI Trust Funds increased by $23B in 2015 with the combined funds still growing. This growth is expected to continue through 2019 after which the program costs are expected to exceed income. In 2015, SSA paid 60 million people benefits.

The outlook for the Medicare Program is not as rosy. In 2015, the Medicare Program covered 55.3M persons of which 46.3M were aged 65 or older and 9M were disabled. 2015 expenditures were $647.B with total income received of only $644.4B. The fund depletion date is estimated to occur by year 2028, two years earlier than reported last year. The only good news is that a projected surplus is projected for years 2016 – 2020 after which funding deficits are expected. Overall, until 2016, the Medicare Program had been running deficits since 2008.

Posted in Medicare, Social Security | Tagged , |

 

Never Out with the Old at the Social Security Administration

The May, 2016 report from the Office of Inspector General (OIG) for the Social Security Administration (SSA) addressed the Disability Case Processing System (DCPS) being developed by SSA to perform its work.

Since 2008 when SSA decided to proceed with the DCPS system, it has invested over $300M into the project and has endured many delays. This amount is equivalent to nine years maintenance on the current systems utilized. The DCPS systems project appears to have failed and will be of little benefit. Even if implemented, the first stage of implementation for only limited use would cost between $90 – 165M with no estimated accounting for operating costs for the new system once implemented. No cost estimate has been placed for full project implementation.

Given the problems experienced, OIG has recommended that SSA discontinue its efforts to develop DCPS in November, 2014. SSA decided to proceed further with the project instead.

In 2015, a review by the United States Digital Service (USDS) identified significant concerns with the software including coding problems and an overly complex database design which led to degraded performance. Based on these findings, SSA finally decided to discontinue development of the DCPS software. The new monies invested into trying to prove the usefulness of the software were approximately $23M.

Following discontinuation of the specialized software, SSA decided to pursue another avenue and utilize commercially available software. This was termed the “Core” approach. The first release of the Core Sytem is due between July and December, 2016, at a cost of $90 – 165M. In redeveloping the DCPS system, SSA believes it can reuse 22% ($71M) to develop the Core functionality. In other words, it will have wasted approximately $300M in the unsuccessful development efforts invested into the DCPS system.

The OIG report criticizes SSA for its failure to discontinue its efforts to develop the DCPS and continuing to rely on maintenance on its old systems. In addition, SSA was faulted in failing to address “critical functionality that could have had a significant effect on the long-term costs and schedule.”

What concerns OIG is that SSA has failed to undertake any comprehensive analysis of alternatives to its current system. Without such consideration, it cannot be determined if the system can be simplified in terms of support and maintenance so as to reduce infrastructure costs. Moreover, SSA failed to provide detailed documentation of the assessments it did undertaken, preventing any independent evaluation of the reasonableness of its decisions.

This ordeal is a perfect example of a “Golden Fleece” awardee if Senator William Proxmire (D-Wis, 1957 – 89) ) were still with us today. This is a tremendous waste of government resources with little oversight or regard to the taxpayer.

Posted in Social Security, Social Security Administration, SSA | Tagged , , , |

 

The Aftermath of a Social Security Denial

If you lose a Social Security hearing, you should not give up hope. This is confirmed by the Office of the Inspector General Report from April, 2016 studying case denials from 2011. A survey of cases from that year revealed that nearly 30% of cases were paid on appeal with nearly another 30% of cases paid upon new application and not requiring another hearing.

So, what can you take away from this? First of all, this report would have been more useful if it included the percentage of denied cases taken upon on appeal. For example, if only 50% of cases were appealed following a claim denial and 30% were successful, that would translate to a 60% win percentage. That would be really good. Also not defined are the percentage of cases that lose at the Appeals Council and are subsequently appeal to the federal court. But, even at the 30% rate as stated, why on earth would you not appeal? A one in three chance of getting benefits for pursuing your case is well worth it.

Even if the appeal is not successful, a new application could be filed thereafter, giving you another nearly 30% chance of receiving your disability benefits.

Therefore, both routes combined result in a possible benefit granting in 60% of cases. And, since there is no penalty for appeal and losing or for filing a new application after an unsuccessful one, you should not be discouraged from pursing your case following an initial.

So, what is the downside to this equation: TIME. An appeal to the Appeals Council will take the better part of a year with a federal court case taking at least another six months. Even if you take the approach of filing a new appeal, it does not end up in the lucky near 30% of decisions granted prior to hearing, then you will wait the better part of two years to get another hearing for your eventual “do over.”

Again, the technicalities of dealing with SSA can be very confusing for claimants, many of whom do not realize that competent representation in the first place gives them a greater than 50% chance of winning their case as opposed to those going it on their own.

Hopefully, these statistics are helpful to you and we remain available to consult should you need representation or have further questions.

Posted in Social Security | Tagged , |

 

Why Was My Short or Long Term Disability Claim Denied?

Believe it or not, this may the most frequently asked question we hear from clients. The problem is that clients are so focused upon their individually-centered existence that they forget what the insurer is really about: MAKING MONEY.

It has very little to do with the particular claimant as opposed to the economic model under when this system operates. For this reason, we are fond of saying: “It is not what is black and white, rather than what is green.” Or, in Watergate terms: “Follow the money.”

The insurance company cares little or nothing about the actual substance of your case. They need to deny as many cases as possible so as to reduce their losses. You just need to look at the business model for disability insurers. They collect premiums and make money on the float (period of time from the time premiums are paid until benefits will become payable) and from claims that are eventually denied.

If you take the time to read the actual formulaic claim denial, it sets forth a recitation of several plan provisions, followed by a selective recitation of the medical evidence, then comes the findings of their hired gun reviewer/examiner, then culminating in the findings that disability benefits are not payable.

Although your disability claim may seem very well supported in terms of having medical reports reciting your diagnoses and, perhaps, a finding that you are not able to work, this is clearly insufficient to prove your case to an insurer.

The insurance company is hoping for one of three courses of action for you to take: (1) getting defeated and giving up the claim; (2) filing your own insufficient appeal; or (3) seeking representation from your local attorney who says that he/she “will see what they can do” despite having little experience in such cases. Each and every one of these course of action can be fatal to your claim.

This is where we come in.

Our appeals commonly run a hundred pages in length with many medical, legal, functional capacity, and vocational arguments which are backed by thousands of pages of exhibits backing the medicine and demonstrating the bad past behavior of the insurer in question.

The information created and held by this firm is not available to the public. The internet will not save you despite how many articles you download. Further, these article never tell you how to appeal your case successfully to a particular insurer. Each insurer has its own variation on the “denial formula” which must be responded to in kind.

Therefore, the first thing you do when faced with a claim denial is call an experienced attorney. If you appeal the case and include a few more medical records and a couple letters with no more, you will ultimately be unsuccessful and may not be able to put more in the administrative record. For insurers who only have a single appeal system, you have just lost your case.

And, don’t for a minute, believe that the all-too-helpful insurance representative only is dying for you to follow the advice to file your own appeal without getting an attorney. They live for this moment. Don’t do it. You will be very sorry as there may be no means of rescuing your case thereafter.

Posted in General Disability Issues | Tagged , , , , |

 

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