Monday, June 18, 2012

Would the ACA reduce the number of Americans on disability insurance?

What do people who have lined up all night (in their cars) for a day of free medical care at a Remote Area Medical clinic in rural Tennessee think of the Affordable Care Act?

Many have never heard of it, reports TNR's Alec MacGillis in Kaiser Health News. But one uninsured patient offered instant economic analysis that the CBO would be well advised to take note of: it was hard to find visitors to the clinic who would not benefit directly from the law. Barbara Hickey, 54, is a diabetic who lost her insurance five years ago when her husband was injured at his job making fiberglass pipes. She gets discounted diabetic medication from a charity, but came to the clinic to ask a doctor about blood in her urine.

Under the law, she would qualify for Medicaid. Her eyebrows shot up as the law was described to her. "If they put that law into effect, a lot of people won't need disability," she said. "A lot of people go onto disability because they can't afford health insurance."
States like Tennessee have kicked a lot of people off Medicaid in recent years -- in Tennessee, you may now be ineligible if you earn as little as $10,000. Conversely, the federal disability rolls have swelled since the financial meltdown and have been rising steadily since the 1990s. Investor's Business Daily reported on April 20 of this year:

A record 5.4 million workers and their dependents have signed up to collect federal disability checks since President Obama took office, according to the latest official government data, as discouraged workers increasingly give up looking for jobs and take advantage of the federal program.

This is straining already-stretched government finances while posing a long-term economic threat by creating an ever-growing pool of permanently dependent working-age Americans.

Since the recession ended in June 2009, the number of new enrollees to Social Security's disability insurance program is twice the job growth figure. (See nearby chart.) In just the first four months of this year, 539,000 joined the disability rolls and more than 725,000 put in applications.

As a result, by April there were a total of 10.8 million people on disability, according to Social Security Administration data released this week. Even after accounting for all those who've left the program — about 700,000 drop out each year, mainly because they hit retirement age or died — that's up 53% from a decade ago....The number of applications last year was up 24% compared with 2008, Social Security Administration data show.

The disability system itself is in need of reform.  It's too easy to get on, and there's no incentive to get off. Providing a massive incentive to enroll by making health insurance unattainable by any other means is part of the problem.

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