Festina lente

There's apparently a pretty standard procedure for applying for Social Security disability: you apply. They reject you. You appeal. Some unspecified period of time later, your appeals win, and you get to go on disability. This New York Times article has a pretty harrowing explanation of the process:

Of the roughly 2.5 million disability applicants each year now, about two-thirds are turned down initially by state agencies, which make decisions with federal oversight based on paper records but no face-to-face interview. Most of those who are refused give up at that point or after a failed request for local reconsideration.

But of the more than 575,000 who go on to file appeals — putting them in the vast line for a hearing before a special federal judge — two-thirds eventually win a reversal.

Mr. Astrue and other officials attribute the high number of reversals to several causes. Those who file appeals tend to be those with stronger cases and lawyers who help them gather persuasive medical data. During the extended waiting period, a person’s condition may worsen, strengthening the case. The judges see applicants in person and have more discretion to grant benefits in borderline cases.

Requiring face-to-face interviews at the initial stage could reduce the number of appeals, Mr. Astrue said, “but given the huge volume of cases coming through, it would be incredibly costly, and the Congress is not willing to fund that.”

The growing delays in the appeal process over the last decade resulted in part from litigation and financing shortages that prevented the hiring of new administrative law judges. In addition, the number of applications is rising as baby boomers reach their 50s and 60s.

This is not quite as psychotic as it sounds. Disability is made deliberately difficult to apply for because the free rider problems in disability systems can be quite immense; by one estimate, from McKinsey, the actual Swedish unemployment figure is not 5% but 15%, after you take into account the working-age population who are on disability or in early retirement. Unless Sweden's much-vaunted kribbe-to-grav welfare state is somehow producing massive numbers of extra physical and emotional cripples, it's hard to escape the conclusion that some of these are people who could, if they wanted, hold down jobs.

Disability systems were originally designed to deal with conditions that were easy to evaluate--do you have two legs, or not? But they've been expanded to cover conditions such as depression and back pain that are literally in the minds of the patients: there is no way to detect malingering. In the 1970s, this gave rise to a number of well-publicised cases of able-bodied adults collecting disability. To prevent that, we've designed an application system that is preferable to working only if you really can't hold a job.

Despite what the article says, the boomers aren't a very good explanation for the rising caseload. Boomers are healthier than any previous generation, so much so that active life expectancy (ALE) is actually increasing faster than average life expectancy. Which is why, if you look at the data, you'll see that changes seem to be driven not by creaky knees, but by changes in awards for hard-to-verify categories like mental disorders. Just like in Sweden (although to a smaller extent), disability seems to be an increasingly popular substitute for unemployment insurance or welfare.

Of course, if you think the government should support more people, this is a feature, not a bug. But even if you don't, it's hard to see what should be done about this. Discouraging malingerers this way also entails immense suffering for the truly needy, who lose houses and hope while waiting for the government to relent.