While discussing the recent Social Security Trust Fund report, I noted that there was a slight increase in the number of disability claims. It turns out that one reason for the increase is that sleazy insurance companies are trying to reduce the benefits they have to pay out by shifting the burden to Social Security:
The Social Security system is choking on paperwork and spending millions of dollars a year screening dubious applications for disability benefits, according to lawsuits filed by whistle-blowers.
Insurance companies are the source of the problem, the lawsuits say. The insurers are forcing many people who file disability claims with them to also apply to Social Security– even people who clearly do not qualify for the government program.
The Social Security Administration defines “disabled” much more stringently than the insurers generally do, so it rejects most of the applications, at least initially. Often, the insurers then tell their claimants to appeal, the lawsuits say, raising the cost.
The insurers say that requiring a Social Security assessment is a standard practice and that there is nothing wrong with it.
The policies they sell allow them to coordinate their benefit payments with others to make sure no one is paid twice. Thus, if a disabled person can get benefits from somewhere else –like workers’ compensation, a disability pension or Social Security–the insurance company can reduce the benefit check by that amount.
It’s reaching ridiculous levels:
Jessica Ortiz, a 27-year-old gas station attendant in San Diego, said that was what happened to her. Her disability insurer, the Unum Group, called more than 10 times after she was hurt in a car crash, insisting that she apply for Social Security and asking repeatedly where her application stood. Unum was paying her only $50 a month under her policy, she said, which seemed a small amount to merit so much attention.
She did not need or want money from Social Security, and did not think she was entitled to it. Her doctors had told her she would recover, and Social Security is limited to people whose disabilities are total and permanent. But she applied because Unum insisted, she said.
Ten months after her accident, Ms. Ortiz returned to work. Social Security turned her down, as she had expected. People who can work are by definition unqualified for disability pay from the government. But when she told the Unum representative what had happened, he told her she could still appeal.
“If I were the government, I’d be pretty upset,” she said. “No wonder the pot could run out of money.”
….Forcing people who are injured to apply for Social Security before paying their claims appears to bolster insurers’ profits in several ways. If claimants refuse to apply, the insurers can simply stop paying their benefits, said Dawn Barrett, an employee of the Cigna Corporation, who grew frustrated sending people to Social Security and who is now a plaintiff in one of the lawsuits. More typically, she said, people apply for Social Security when an insurer tells them to. That allows the insurer to reduce its claim reserves, money that is kept in conservative investments for benefit payments. And in the insurance industry, smaller reserves mean bigger profits.
“It’s all about the numbers,” Ms. Barrett said.
Finally, disability insurers tell many of their claimants to appeal Social Security’s rejections again and again, until some are finally accepted. Then the insurers can take those people off their rolls, shifting the cost to the government.
Just for the record: Ms. Ortiz, you and I both are the government, and we should be upset. But really this is just another symptom of degenerate wealthy white culture….[link]
mikethemadbiologist
What’s that last link – and what’s whiteness got to do with it?
I used to work for AlliedSignal, before they bought out Honeywell so they could hide behind that unsoiled name. The company started a sick leave policy such that if you were out too many days they would force you to apply for state disability insurance, and they would deduct from your pay what the state might pay in benefits. If you failed to sign, they’d fire you for insubordination.
I don’t know of anyone who actually caved in on this. I do know it was fun to talk loudly in the hall, offering a third option — turning state’s evidence in criminal proceedings against our management. I think the local management didn’t trust HQ’s army of lawyers to keep them out of jail.
It’s from such experiences I’ve come to understand civil penalties against corporations are just penalties imposed on investors: only the fear of prison will keep any of these people honest.
The comment about “degenerate white culture” is an intentional dig at the right wing-propagated myth that the only people who need Social Security are black welfare queens who buy Cadillacs with food stamps. Because “degenerate black culture” encourages them to be lazy and live off the magnanimity of the white man, see?
My insurance provider sends out a questionnaire every few months asking me to list any other possible benefits provider for all of my dependents (spouse and 3 kids) in the hopes that they can get out of providing the service I pay them for. And if it isn’t returned right away they *stop paying all claims* until it’s returned.
Yet they informed one medical office that they’d sent me a check and the office should contact me for payment and it’s been almost 6 months, 15 phone calls, and 3 seperate claims of “we’re sending the check out tomorrow” and still no check. And this is one of the biggest national providers, not some rinky dink operation.
I kinda figured that, or maybe even a more-radical dig at the Powers What Be. (Of course, there is a chance that the Unum Group executive offices are populated with the corporate counterparts of Clarence Thomas & Condoleezza Rice – who by equal probability travel on a company Learjet assembled by a tornado in a junkyard…)
here in canada they do the same thing. a relative who is permanently disabled due to a work injury is not entitled to long term disability under wcb rules, so had to go thru our version of social security for the disabled. at first they were told by a local politician to go on welfare. this is a huge and insurmountable problem as this affects everything in a person’s life and screws it up for those who need it for other reasons. it took almost a year for this to happen and they receive less than half of what they ought to according to workers comp numbers. f*&^ers.
thanks very.
thanks