Insurance Companies Are Killing Social Security

Okay, this is pretty unsavory business. Insurance companies are costing the Social Security Administration hundreds of millions of dollars in their quest to get out of paying benefits to injured Americans. [NY Times]

Here�s how the system works. Pay attention, it�s not terribly complicated. Say you get hurt at work. If your injuries are temporary or you can still find other work, you�re eligible for disability benefits from your insurance company. (In fact, that�s exactly what your employer pays the insurance company for.) If your injury is total, permanent, and stops you from ever holding down another job, you qualify for government disability benefits from Social Security. Your insurance company will then deduct how much money you get from the government from what they have to pay you so you�re not double-dipping.

Here�s where it gets tricky. Insurance companies are abusing the system in an attempt to get out of paying you at all. The more claims they can deny, the more money they keep in their own pockets.

The insurance companies are forcing everyone to apply for Social Security benefits, whether they qualify or not. If you refuse because you know you�re not qualified, they drop you. If you apply and are denied, they make you appeal the decision.

Experts �do not fault the idea of coordinating benefits with Social Security and workers� compensation. Instead, they contend that insurers are recklessly dumping people on Social Security�s doorstep, without properly screening them to make sure they have a chance of qualifying.�

The process is crippling the Social Security Administration with needless paperwork and huge expense. It�s stopping people who are truly disabled from getting benefits and is running the system dry.

To process a claim, Social Security must compile detailed medical records, send applicants to doctors for tests and, interview co-workers and family members. That takes a long time and it ain�t cheap.

The average wait for a claim to be processed by Social Security has grown from 258 days in 2000 to 512 days today.

The average disability application costs Social Security $1,180. To go through the appeal process costs the agency $4,759.

Oh, and Social Security is slated to run out of money for disabilities by 2026, about 16 years ahead of the old age fund.

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