Republicans in Congress have been searching for a way to offer a legislative fix to Social Security and have proposed three plans to expand private disability insurance while curtailing Social Security Disability insurance. The Government Accountability Office has expressed skepticism about all three of the proposals. The GAO has pointed out that SSDI and private disability insurance differ in multiple ways, including accessibility, the duration of benefits and the conditions that might qualify. If one of the proposals is passed and enacted into law, fewer people may be able to access disability benefits even though they are unable to work.
The Proposals to Expand Private Insurance
Three proposals to curtail SSDI by expanding private disability insurance have been submitted for review. One plan would call for more employers to offer private disability insurance on an opt-out basis. All employees would automatically be placed in the program and would need to opt out if they didn’t want to participate. Another plan would offer a tax credit to employers to incentivize offering private disability insurance to replace between two to three years of SSDI benefits. Finally, the third proposal would require all employers to offer private disability insurance to their employees. The workers would be responsible to pay a minimum of 40 percent of their own premiums. Disabled workers would have to first use up two years worth of private disability insurance before they could receive SSDI benefits. At that time, SSDI benefits would only provide catastrophic coverage to the disabled workers.
Reasons for the GAO’s Skepticism
The GAO gives several reasons for its skeptical response to the three expansion proposals. It notes that most workers who have private disability insurance have higher incomes than those who rely on the protections afforded by the Social Security Disability insurance program. They also note that private disability insurance places caps or limits on coverage for certain types of disabilities such as mental health issues. The proposals also do not provide any details about rehabilitation for workers or accommodations in the workplace for people who have disabilities. From the GAO’s response, it appears that an expansion of private disability would not work as a fix to Social Security without further investigation.