A disability policy for the 21st century | Opinion Jan 2012

By David Stapleton and David Mann, researchers at Mathematica - 01/19/12

Of the roughly 17.5 million working-age people in the United States living with a disability, nearly 70 percent receive disability benefits. A recent study revealed that 12 percent of all federal spending goes to supporting this population—$357 billion in 2008. Just 33 percent of working-age people with disabilities are employed, compared to 73 percent of those with no disability. This costly system is failing both people with disabilities and taxpayers.

The federal government began offering Social Security Disability Insurance (SSDI) benefits to older workers no longer able to work because of long-term impairments in 1956. The nation has since expanded SSDI coverage and launched additional programs to support Americans living with significant disabilities. This support system, however, has failed to keep up with the changing needs of Americans or the realities of current economic times. Despite the promise of the Americans with Disabilities Act, people with disabilities, as a group, are falling further behind their peers without disabilities and are becoming more—not less—dependent on government programs.

The disability support system has two fundamental structural flaws. First, our major programs define disability as an “inability to work” due to “medically determinable” impairments, even though advances in medicine and technology now make it possible for some people with very significant impairments to work. Structured around this definition, the current system discourages work and encourages long-term dependence on public supports. Of the nearly 13 million working-age Americans receiving SSDI or Supplemental Security Income (SSI) benefits today, over half live in poverty. Most will continue to receive benefits until they become eligible for Social Security retirement benefits or die.

Second, the patchwork of state and federal disability support programs, each with different entry points, creates pervasive inefficiencies and perverse incentives that hinder substantive reform. For example, states are responsible for delivering employment services to help people with disabilities become self-sufficient, but they have little incentive to do so because the federal government pays for almost all income support and most health care for people who are not self-sufficient.

An overhaul of the disability support system is needed to encourage and empower people with disabilities to seek employment, to reduce service duplication, to improve program efficiency and to increase the return on taxpayer investment. Implemented incrementally, comprehensive reforms could facilitate greater economic independence for people with disabilities and curb the growth in public spending for their support.

Transforming the disability support system should start with a vigorous debate on alternative approaches and a commitment to ensuring that large-scale changes are based on solid evidence. Congress could jump-start this process by creating a national disability demonstration commission. Such a commission could develop and test bold new ideas that comprehensively address the problems of our flawed and fragmented system. Instead of making minor tweaks, the commission could facilitate real change across government jurisdictions, integrating innovative financing with effective service delivery. The commission would need to allow waivers of current regulations, and interventions would need to be carefully designed and thoroughly tested to minimize risk for current beneficiaries.

To start the conversation on rethinking disability policy and restructuring the disability support network, we offer, in a recently released report, one possible method of reorganizing support for this population. We suggest creating a state- or locally based system of disability support administrators (DSAs) to act as central points of intake and coordination for people needing services. This service-coordinator approach could simplify the process for applicants and improve individual outcomes. We also describe how financing could be realigned to promote the objectives of the restructured system. Further, we point to the need to make funding allocations more reflective of the business cycle, increasing during economic contraction and decreasing during rapid economic expansions. Will this approach work? We won’t know until it is tested, but we are convinced that no substantial progress will be made if we fail to test such comprehensive approaches to reform.

Reforming the national disability support system is critical to improving outcomes and reducing costs in the long term. Without structural reforms that enable people with disabilities to participate more fully in the economic mainstream, the efforts of fiscal reformers to tighten eligibility and trim benefits for existing programs will only lead to an increasingly bleak economic future for this population.

# David Stapleton is the director of Mathematica Policy Research’s Center for Studying Disability Policy. David Mann is a researcher at Mathematica.

http://thehill.com/blogs/congress-blog/labor/205167-david-stapleton-and-david-mann-mathematica-policy-research