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Harold Pollack: What ‘This American Life’ missed on disability insurance

Over the weekend, "This American Life" and "Planet Money" ran a long reported piece by Chana Joffe-Walt looking at the extraordinary growth of America’s disability insurance system. In Hale County, Ala., one in four residents is on disability, and Joffe-Walt spent time with a young child whose disability check has become the key to his family’s survival. Ezra interviewed Joffe-Walt about her piece here.

But is there more to the story? Is America's disability insurance system in need of fundamental reforms? I asked Harold Pollack, an expert on disability policy at the University of Chicago's School of Social Service Administration (he's also a nonresident fellow at The Century Foundation). A lightly edited transcript of our conversation follows.

Brad Plumer: One of the big themes of the "This American Life" segment was that as the U.S. economy has slumped and jobs have vanished, disability insurance has essentially become the safety-net program of last resort. More people are now qualifying for disability than ever before — it now costs $260 billion per year. Is this really what the program is designed to do?

Harold Pollack: These tensions go back to the very beginning of this program. It has always been a matter of deep controversy and anxiety about how to draw the boundaries between eligibility and non-eligibility. And the worry among fiscal conservatives has always been that it would become a backstop income guarantee for people who couldn't find a job.

If you go back to 1985 and look at Jerry Mashaw's book "Bureaucratic Justice," even then there's an interesting account of how the agency has tried to deal with these problems, and how one can fairly and accurately make determinations for hundreds of thousands of applicants. It's not feasible to stage an OJ-style trial for everyone who applies for disability, but you still want real and defensible standards for who qualifies and who doesn't.

But the program is also a lot more stringent than that "This American Life" piece would have you believe. The fact is, the vast majority of applicants are denied, and there are qualified diagnoses that are very stringently applied.

BP: One thing we've seen is that more and more people have qualified as disabled during the recession. Some of that is simply due to the unavoidable fact that America's getting older. But some is due to rising unemployment. If there are strict standards, how can that be?

HP: Disability really does need to be thought about in the context of economic opportunities. If you have a bad back, and the only jobs available are manual labor, that's a real limitation. You're unable to work. So it very much matters that we're in a deep recession, and a lot of the opportunities people faced are limited.

You can't remove the economic context from the disability conversation. I don't know about the particular physician they discussed [in Hale Country, where one in four residents qualified for disability], that might not be totally consistent with what the program's intended to do. But I can certainly see where he's coming from.

BP: Now there's another big concern that once workers qualify for disability, they leave the labor force altogether. They never work again. Is that a real worry? Is the disability program really luring away people who could work? 

HP: I don't think so. One way to see this is to look at the employment rates for people who applied for disability but were then denied. And those are actually quite low, below 50 percent. That suggests we're not pulling people out of the workforce who would otherwise be there.

It's also worth remembering that the adult benefits for disability are not that high. If people are leaving the labor market so that they can get $13,000 per year and health care because that's better than anything that employers can provide, what does that tell you about the state of the economy?

BP: Now when we talk about "disability insurance," we're essentially talking about two distinct programs. One involves disability benefits for adult workers who can no longer work. But there's also the program to help parents with children with disabilities. How is the latter supposed to work?

HP: When a child has a significant set of impairments or disabilities, a parent often needs access to medical care and social services to take care of the child. Sometimes parents have to expend a lot of time and effort, or they need to purchase health services that aren't covered elsewhere. [Note: Average costs range from $6,000 to $11,000 per year.]

If you have a child with cerebral palsy, and you're extremely poor, you'll likely need the help of the SSI disability program in many cases. And there are many, many children across America who need this program and who have significant disabilities.

BP: One thing the "This American Life" segment found is that the number of children on disability has been rising quite a bit since the 1990s. Does that suggest the program has been changing in unintended ways?

HP: What makes this problem complicated is that since 1996, the welfare caseloads have also plummeted. It's always been the case for parents of disabled children who are poor, there has either been welfare or disability, and parents often used one program or the other. So as welfare became more restricted, there were reasons for people to shift into the SSI disability program.

But the shift hasn't been nearly as dramatic as "This American Life" made it seem. The overall proportion of poor kids on SSI has been pretty constant in recent years. And even as the poverty rate has gone up, the rise in children on SSI disability has been dwarfed by the much bigger decline of children in the old welfare system. I made a graph to show this:

And there's another way to see this. The Women's Employment Study (pdf) followed 500 long-term welfare recipients, and found that, of those, only 37 ended up on SSI. Another 114 applied but were unsuccessful.

BP: So it's not really true that there are lots of parents out there coaxing their kids onto disability so that they can get government benefits?

HP: There are occasionally anecdotal accounts of parents coaching their kids to misbehave in school so that they can qualify for disability. But that just doesn't show up in the numbers. The majority of applications for things like ADHD [attention deficit-hyperactivity disorder] are denied.

BP: Nick Kristof of The New York Times wrote a column awhile back where he worried that too many kids were being admitted into the disability program and then being held back in school by their parents so that the checks would keep flowing. And he was particularly alarmed that two-thirds of kids on disability stay on adult disability when they turn 19. Is this a problem?

HP: Yeah, the way he presented this statistic was very misleading. The program is actually quite stringent at the front end. And that means the kids who do qualify are much more likely to have chronic issues that last into adulthood. Many of the kids on childhood SSI have unambiguous conditions that are lifelong. So the fact that most of them qualify for adult disability doesn't tell you much about the program.

BP: Do you think there are ways to reform the disability program? 

HP: There are a couple of issues here. The disability programs could always be run better, and one shortcoming of the "This American Life" story is that there was little discussion of the nuts and bolts of this. For example, it would be wise to make more investments in the administrative capacity of the Social Security Administration so that they could do more reviews, check up on people with continuing disabilities and see if they're still eligible.

Ultimately we want to make sure this program is done in way that's effectively advancing the goals we care about. And to achieve public legitimacy these programs need to remain stable over time.

BP: One of the things Chana Joffe-Walt mentioned in her interview with Ezra is that a huge portion of the cost of disability insurance was health care — about $80 billion of the $260 billion the government spends each year. So could health-care reform change that?

HP: Right, it's interesting that the words "health reform" never came up in the "This American Life" piece. There was a 56-year-old man who had a heart attack and then went on disability. People like that may end up having real health insurance problems, especially when they have preexisting conditions. One thing I hope will happen is that when the health insurance exchanges [as part of the Affordable Care Act] become operative, that will provide opportunities for many people who are otherwise turning to disability for help.

I do think we need to think about better ways to provide certain health services. A lot of people are forced into disability programs because they have particular health needs, and we should think about whether there's a way to provide options for those people outside the program.

American attitudes about disability have changed so much over the past generation, which in general has been a triumph of social policy. But it's been an incomplete triumph. Our awareness of mental health issues as disabilities has been a good thing, for instance, but it's also made new challenges for public policy.

Related: Ezra Klein interviews Chana Joffe-Walt on her piece on disability.