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Federal disability insurance collapse by 2016?

While the demise of the entire Social Security system has been in the headlines for decades, little attention, if any, has been paid to the disability portion of Social Security. According to a recent item in Bloomberg Business Week, disability insurance funds are projected to be gone by 2016. That means a few things, none of which are any good:

Disability insurance companies have risk-shared with the federal government for years. In most cases, the disability insurance company does not take on the total risk of the policies it sells. The amount of money a claimant receives from Social Security is deducted from the benefit paid by the insurance company. The insurance companies are partners with Social Security. So disability insurance companies have a vested interest in ensuring that the broke-by-2016 projections do not become a reality.

And since the insurance industry has long been the single most powerful lobbying group in Washington, we are fairly confident that somehow, some way, monies will be found. Where will the money come from? Our best bet would be the taxpayer's already tight coffers.

If by some lobbyist's worst nightmare, funding is not put into place, a far worse scenario is possible. Despite cynics who look at every claim as fraudulent, most workers and families depend on the Social Security disability benefit because they are genuinely too sick or injured to work. If the system is not funded, we'll end up paying for it one way or another.

Our suggestion? Call your Congressional representative. Apparently most of them are putting Social Security disability on the back burner as they deal with issues that are more likely to win voter approval. In an election year, the tough issues get tamped down.

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