The source of this article is the Boston Globe: http://tinyurl.com/58rlx

Reform talk passes disability program by
By Michael Kranish, Globe Staff  |  February 14, 2005

CAVENDISH, Vt. -- Joe Allen had the classic New England dream: He quit his
grueling job as traveling official with an electronics company, bought a
country store in small-town Vermont, and aimed to live happily ever after.
But when a blood disease made it impossible to work, he was advised to apply
for Social Security disability payments. After all, he was told, he had paid
Social Security taxes that are intended for just such emergencies.

What Allen didn't know was that the federal system for approving disability
payments is known for its inequities and inefficiencies. It took nearly two
years and lengthy appeals before his application was approved. During that
time, Allen, who became increasingly ill, lost his store and began to wonder
whether the government was waiting for him to die before mailing a check.

The payments ''saved my life, but I almost died trying to get it," said the
54-year-old Allen, a stout, bearded man who lives with his two dogs in the
mountains near this small town.

The disability program has received relatively little attention amid all the
talk about overhauling its sister program, Social Security retirement. Yet
the disability program is one of the largest in government, providing $71
billion in annual benefits to 7½ million people. A raft of government
reports has concluded that delays in granting benefits are all too common,
with the full appeals process taking nearly three years.

''The process still takes way too long," Martin H. Gerry, the federal
official who oversees the disability system, said in an interview even as he
touted overhauls that are underway. At the same time, government reports say
fraud and waste are rampant in the disability program, including nearly $1
billion in overpayments last year.

All of this may sound like just the kind of problem that President Bush and
Congress are eager to tackle when they begin overhauling Social Security.
But unless there is a dramatic shift, that will not happen.

Bush has said he is focused only on the retirement portion of the program,
which he wants to change by allowing private investment of some Social
Security taxes. While White House officials acknowledge that the disability
portion is plagued by problems, they said they hope that the problems can be
fixed administratively.

Overhauls first discussed nearly four years ago are only slowly being
implemented, however. Only one state, for example, has instituted a switch
from paper documents to computerized record keeping, with more to come this
year, officials said.

The 12.4 percent in Social Security taxes that workers and employers pay
includes a 1.8 percent tax that goes to a fund strictly for disability
payments -- a levy that many workers may not realize they are paying. While
every employee who pays Social Security taxes is entitled to retirement
benefits, only those who pass a series of exams are allowed to receive
disability payments.

The program has grown significantly as the baby boom population ages: About
7.5 million people receive the disability benefits, including 1.8 million
dependents. The program's $71 billion per year cost is in addition to the
$398 billion per year cost of retirement and survivor benefits.

While the White House says Bush is not yet focusing on the disability
program, some in the disabled community worry that benefit cuts will be
applied to both the retirement and disability programs as a way to save
money. For example, if the retirement plan benefits are cut by tying
payments from the current system of wage indexing to price indexing, as some
have proposed, it is unclear whether the same cut would be applied to
disability benefits.

In addition, Thomas Sutton, president of the National Organization of Social
Security Claimants' Representatives, worries that Bush's plan for private
Social Security accounts could hurt people with disabilities. He gave the
example of a person who is disabled at age 37 and cannot return to work.
That person would receive disability benefits but under the Bush plan would
not be contributing to a private account. Upon retirement, that person would
not have nearly as much money in a private account as a nondisabled person.

''Those of us who are advocates for the disabled are very concerned about
the impact of privatization on the disabled and the survivors of the
deceased, who are about one third of the people who receive Social Security
benefits," Sutton said.

If Bush is concerned about the retirement program being in crisis, he has
cause to be even more alarmed about the disability system. The disability
program is scheduled to start taking in less money than it pays out in 2008,
compared to 2018 for the retirement program, officials said. The disability
program will then start relying on its trust funds, which are slated to run
out by 2029, and it might eventually draw on resources now spent on the
retirement fund, potentially worsening the overall problem.

But the biggest problem with the disability system, according to critics, is
that it seems designed to be inequitable. While the disability program is
run by the federal government, much of the decision-making authority is
handed over to state-employed workers. That may explain why only 36 percent
of initial claims are approved in Connecticut, close to the national
average, compared to 60 percent of those who apply in New Hampshire. Medical
reviews are performed by state bureaucrats, often based on evaluations done
by private consultants whose expertise varies widely.

A federal report said applicants are much more likely to get benefits in New
England, which is overseen by the Boston office of the Social Security
Administration, than in other parts of the country. ''The odds of being
allowed benefits for claimants whose hearings took place in the Boston
region were approximately two times higher than for claimants whose hearings
took place in other regions," according to a 2004 report by the Government
Accountability Office, a disparity that apparently has not received public
notice until now.

Social Security Administration officials acknowledge that decision-making
can vary widely because some states do not have as many medical or
vocational specialists as others. ''There is a very uneven distribution of
expertise," said Gerry, the agency's deputy commissioner for disability and
income security programs. He suggested the disparities may even out when the
results of various appeals are taken into account, but his spokesman said
later that data are ''not readily available" to prove that theory.

To many people seeking benefits, the system can appear to be a maze that
only a lawyer can penetrate. If a person is denied benefits during an
initial review, there are four more steps that can be taken: an appeal to
reconsider the denial; an appeal to an administrative law judge; an appeal
to another review board; and, finally, a federal court suit.

As a result, there is a thriving business of thousands of lawyers who file
appeals and, if they win their case, are allowed to take 25 percent of the
previously denied benefits. In the month of January 2005, lawyers received
$68 million in such fees in 20,000 cases, according to a report by the
Social Security Administration.

Every year, about 2.5 million people file claims for disability benefits. Of
those, 37 percent are initially approved. After appeals, the final approval
rate climbs to 53 percent, according to Gerry.

Gerry acknowledged that the system can be daunting, noting that the Social
Security Administration employs 1,000 administrative law judges and holds
650,000 hearings a year, making the disability claims process ''the largest
administrative law system in the world."

Gerry said he is especially concerned that a poor person with disabilities
who cannot afford a lawyer will not get benefits. ''I'm dissatisfied with
where it is, and [Commissioner of Social Security Jo Anne B. Barnhart] is
dissatisfied with where it is," Gerry said about the disability system.
''However, I'm satisfied we're making substantial progress to improve it,
and we will try as quickly as possible to get it to where it should be."

Once a person with disabilities receives benefits, which average $894 per
month, few leave the system voluntarily. Only about one in 500 people on
disability tell the Social Security Administration that they have improved
enough to go back to regular working hours and conditions. Separately,
13,900 of 784,000 cases reviewed by the government in 2003 resulted in a
cessation of benefits, a Social Security official said.

Allen's case appears typical of those who experience delays in receiving
payments. He did not know about the disability benefits when he went to town
officials and asked for welfare assistance.

''It was the most humiliating thing I had ever done," Allen said. ''They
said to apply for Social Security."

Allen said his claim was denied his twice. Then, with the help of Vermont
lawyer Judith Brownlow, he went before an administrative law judge.

He said he wore shorts on the wintry day, enabling the judge to see that
Allen's legs had bloated to 29 inches at the calf because of his medical
condition.

The judge overruled the initial denial. ''He was clearly someone who
deserved the benefits," Brownlow said.



© Copyright 2005 The New York Times Company

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