Social Security Disability Insurance

Despite statutory provisions and efforts by the Social Security Administration (SSA)--as well as medical and technological interventions that have afforded greater potential for some beneficiaries to work--not more than one of every 500 disability insurance beneficiaries has left the rolls by returning to work. Yet relatively small improvements in return-to-work outcomes potentially offer significant savings in cash benefit outlays. To help improve return-to-work outcomes, Members of Congress and advocates for the disabled have recently proposed various reforms, such as allowing working beneficiaries to keep more of their earnings, safeguarding medical coverage, and enhancing vocational rehabilitation. This testimony discusses (1) factors that working beneficiaries believe are helpful in becoming and staying employed and (2) trade-offs and challenges that exist in improving work outcomes.

GAO noted that: (1) the group of DI beneficiaries interviewed identified a range of factors that enabled them to return to work; (2) factors most prominently cited were an improved ability to function in the workplace as a result of successful health care and encouragement from family, friends, health care providers, and coworkers; (3) on the other hand, DI work incentives--such as purchasing Medicare upon exit from the rolls--and assistance from Social Security Administration staff appeared to play a limited role in helping beneficiaries become employed; (4) a number of respondents said, however, that the provisions that allow them to work for a period of time without losing cash and medical benefits and to retain health care coverage for a limited time period after cash assistance ends were helpful; (5) availability of worksite-based health insurance appears to differentiate respondents who plan to leave the rolls in the future from respondents who plan to stay; (6) in addition, GAO's analysis of some of the proposed changes to work incentives--such as gradually reducing the DI cash benefit level as earnings increase--indicates that there will be difficult tradeoffs in any attempt to change the work incentives; and (7) although GAO's work sheds additional light on this issue, the lack of empirical analysis with which to accurately predict outcomes of possible interventions reinforces the value of testing and evaluating alternatives to determine what strategies can best tap the work potential of beneficiaries without jeopardizing the availability of benefits for those who cannot work.