Good morning and welcome to our second hearing in our hearing series on Securing the Future of the Social Security Disability Insurance Program. Today our focus is on combating waste, fraud and abuse.
In our first hearing we talked about the important milestone set in 1956 by the creation of this cash benefit program for those who could no longer work due to a disability. From the beginning, there was a great deal of concern about the high risk for fraud, waste, and abuse because of the changing nature of disability and the inherent subjectivity of determining whether a person was truly disabled.
Today, the disability insurance program pays benefits to individuals with disabilities that meet certain medical criteria, as long as they worked long enough and paid Social Security taxes.
Over the past four decades, disability program costs have soared from $18 billion to $124 billion as the number of those receiving benefits has more than tripled from 2.7 to 9.7 million. The size of the overall workforce, more women in the workforce, the aging of the baby boomers into their disability-prone years, and relaxed eligibility requirements have all contributed to this growth.
That continued growth is putting a massive strain on the program. According to the 2011 Trustees’ Report, without Congressional action, the Disability Insurance program will be unable to pay full benefits beginning in 2018, only a few years from now. And as the size, cost and complexity of the disability insurance program have increased, so has the program’s exposure to waste, fraud, and abuse.
In fiscal year 2011, Social Security paid $130 billion in disability benefits. That’s about what it costs to run three Federal agencies, the Department of Homeland Security, NASA, and the Department of Housing and Urban Development. In that same year Social Security’s disability overpayments were 1.4 percent of total benefits paid. That percentage may sound small, but 1.4 percent of benefits equals $1.8 billion in overpayments.
In fact, according to Social Security, each tenth of a percentage point in payment accuracy represents about $706 million in outlays for the retirement and disability program. Said another way, for every one tenth of one percent Social Security improves its payment accuracy, it can pay disability benefits for a full year to close to 5,300 people. That’s real money for those who can’t work and who count on these benefits to keep a roof over their head and food on the table. Finally, while Social Security collected $839 million in overpayments in FY 2010, cumulative overpayment debt still reached $5.4 billion that same year.
Continuing disability reviews also protect the disability program by making sure those receiving disability benefits are still disabled. Every $1 spent on the reviews results in at least $10 of program savings, including both Medicare and Medicaid. There is a growing backlog of medical continuing disability reviews, and in the Budget Control Act, Congress authorized $13 billion in additional funding over the next ten years exclusively for these and other reviews.
The best way to protect the disability program is to prevent fraud before it occurs. The Cooperative Disability Investigation program does just that. This program is a joint effort between Social Security and the Office of Inspector General, working with the State Disability Determination Services and State or local law enforcement. Since 1998, efforts by these units nationwide have resulted in $3.1 billion in disability program savings. As impressive as some of these anti-fraud efforts appear, their very success raises questions about how many other examples of abuse are yet undetected.
The disability program is of vital importance to millions of Americans whose lives are changed forever by the onset of a disability. We need to protect that program for those who truly need its benefits. Waste, fraud, and abuse in the disability insurance program cheat honest, hardworking American taxpayers. As we work to secure the future of this program, we need to protect taxpayers from con artists who are stealing from the system by making sure benefits are paid only to those who deserve them — an undertaking I know all of us on the Subcommittee stand firmly behind.