1 Social Security Disability Insurance Program Why Has Cost Risen So Much, and What Is Next? Steve Goss, Chief Actuary, Social Security Administration.

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Presentation transcript:

1 Social Security Disability Insurance Program Why Has Cost Risen So Much, and What Is Next? Steve Goss, Chief Actuary, Social Security Administration MAAC September 12, 2013

2 How have we done projecting DI Trust Fund solvency?

Most of the change since 1980 is due to increased population, population aging, and women working more consistently 3

4 Is DI out of control, taking over OASDI? (Note 5% increase in DI cost for 2010 due to recession)

5 As usual, it is mostly about aging (Note the progression of the boomers from )

6 Increased work by women raised insured; partially offset by more undocumented

7 Incidence rates for women have risen to male level

8 Then Maybe it is Not all Due to Increased Awards Based on Mental Impairments and “Back Pain”?

9 Young females: steady distribution by medical impairment Figure 12: Female Age disabled worker new entitlement distribution by primary diagnosis (awarded through June 2012) 9

10 Young males: steady but for HIV bulge in Figure 13: Male Age disabled worker new entitlement distribution by primary diagnosis (awarded through June 2012) 10

11 Older females: increased musculoskeletal but less circulatory and neoplasms Figure 14: Female Age disabled worker new entitlement distribution by primary diagnosis (awarded through June 2012) 11

12 Older males: increased musculoskeletal impairment; less cardiovascular Figure 15: Male Age disabled worker new entitlement distribution by primary diagnosis (awarded through June 2012) 12

One More Thought How will ACA affect Disability cost? –Will low-cost or no-cost health insurance available to fill the gap until Medicare comes in make more able to stop working earlier to apply for disability? –Or will near universal medical insurance and preventive care reduce the incidence of progressive disabling impairments??? Which will be the stronger effect?

14 So where are we on DI? Is the sky falling, cost out of control? No. Or are we following a path foreseen? Yes. Actuarial deficit for DI is 0.32 percent of payroll (0.12 percent of GDP) so we could: Increase tax rate or eliminate the tax max for DI Lower the monthly benefit (PIA level) Time-limit benefits, increase vocational grid ages, experience rate employers, and/or adversarial ALJ (these would have some small effects) Note that increasing NRA shifts cost to DI