SOP
My employer provides a nice long-term disability insurance policy for each of the attorneys on staff. I don't pay the premiums, the partners do. After reading this article in today's NY Times, I think they just might be wasting their money.
It seems that private disability insurers are forcing claimants to file for Social Security Disability benefits even though those claimants don't qualify for the federal program because the claimants can expect their conditions to improve enough to return to work. As a result, the Social Security Administration has been flooded with applications for benefits which they must process and those who truly are precluded from working ever again are stuck in an ever-lengthening line.
The Social Security system is choking on paperwork and spending millions of dollars a year screening dubious applications for disability benefits, according to lawsuits filed by whistle-blowers.
Insurance companies are the source of the problem, the lawsuits say. The insurers are forcing many people who file disability claims with them to also apply to Social Security — even people who clearly do not qualify for the government program.
The insurers say that requiring a Social Security assessment is a standard practice and that there is nothing wrong with it.
The policies they sell allow them to coordinate their benefit payments with others to make sure no one is paid twice. Thus, if a disabled person can get benefits from somewhere else — like workers’ compensation, a disability pension or Social Security — the insurance company can reduce the benefit check by that amount.
The flood of referrals, however, is making it hard for Social Security to respond to people who are truly disabled, said Kenneth D. Nibali, the former top administrator of the Social Security disability program.
Now, there is nothing inherently wrong with coordinating benefits, but when a private disability insurer steers a car accident victim with relatively modest injuries to the Social Security system to avoid paying out $50 a month, people should be suspicious, as was one of those claimants profiled in the article.
Why bother to play these games? Well, it has to do with how insurance companies increase their profitability:
Forcing people who are injured to apply for Social Security before paying their claims appears to bolster insurers’ profits in several ways. If claimants refuse to apply, the insurers can simply stop paying their benefits, said Dawn Barrett, an employee of the Cigna Corporation, who grew frustrated sending people to Social Security and who is now a plaintiff in one of the lawsuits. More typically, she said, people apply for Social Security when an insurer tells them to. That allows the insurer to reduce its claim reserves, money that is kept in conservative investments for benefit payments. And in the insurance industry, smaller reserves mean bigger profits.
Nice scam, eh?
Just another example of the corporatocracy's privatizing profits but socializing risks. And who pays? Apparently we do.
It seems that private disability insurers are forcing claimants to file for Social Security Disability benefits even though those claimants don't qualify for the federal program because the claimants can expect their conditions to improve enough to return to work. As a result, the Social Security Administration has been flooded with applications for benefits which they must process and those who truly are precluded from working ever again are stuck in an ever-lengthening line.
The Social Security system is choking on paperwork and spending millions of dollars a year screening dubious applications for disability benefits, according to lawsuits filed by whistle-blowers.
Insurance companies are the source of the problem, the lawsuits say. The insurers are forcing many people who file disability claims with them to also apply to Social Security — even people who clearly do not qualify for the government program.
The insurers say that requiring a Social Security assessment is a standard practice and that there is nothing wrong with it.
The policies they sell allow them to coordinate their benefit payments with others to make sure no one is paid twice. Thus, if a disabled person can get benefits from somewhere else — like workers’ compensation, a disability pension or Social Security — the insurance company can reduce the benefit check by that amount.
The flood of referrals, however, is making it hard for Social Security to respond to people who are truly disabled, said Kenneth D. Nibali, the former top administrator of the Social Security disability program.
Now, there is nothing inherently wrong with coordinating benefits, but when a private disability insurer steers a car accident victim with relatively modest injuries to the Social Security system to avoid paying out $50 a month, people should be suspicious, as was one of those claimants profiled in the article.
Why bother to play these games? Well, it has to do with how insurance companies increase their profitability:
Forcing people who are injured to apply for Social Security before paying their claims appears to bolster insurers’ profits in several ways. If claimants refuse to apply, the insurers can simply stop paying their benefits, said Dawn Barrett, an employee of the Cigna Corporation, who grew frustrated sending people to Social Security and who is now a plaintiff in one of the lawsuits. More typically, she said, people apply for Social Security when an insurer tells them to. That allows the insurer to reduce its claim reserves, money that is kept in conservative investments for benefit payments. And in the insurance industry, smaller reserves mean bigger profits.
Nice scam, eh?
Just another example of the corporatocracy's privatizing profits but socializing risks. And who pays? Apparently we do.
Labels: Insurance Companies
posted by Diane at 4:36 PM
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