We keep hearing that Social Security disability benefit payments are soaring. They're going through the roof. It's ruinous how rapidly disability payments are rising. Funny thing about that. It's not happening, at least not anymore. Below is a chart showing Disability Insurance Benefits payments over the last two years. I know the chart contains some extraneous information but I couldn't copy just the month and the total benefit payments. Notice that benefit payments have gone up in the last two years by 8%, which is certainly significant but hardly a disastrous increase considering the aging of the baby boom population and considering the 3.6% cost of living adjustment at the end of 2011 and the 1.7% cost of living adjustment at the end of 2012. More interesting is that the increase in benefit payments has ground to a halt over about the last year. We seem to be near stasis. This is exactly what the actuaries have been predicting. Once the number of baby boomers reaching full retirement age, making them no longer eligible for disability benefits, started equaling the number reaching their prime years for disability, the boom in disability claims would be over. Well, it's happened. It's right there in the numbers you see below. Total benefit payments in June 2013 were less than they were nine months earlier in September 2012, despite the intervening cost of living adjustment.
| Year | Month paid |
Total benefit payments a |
Cyclical payments b | Medicare premium deductions |
All other payments | ||||
|---|---|---|---|---|---|---|---|---|---|
| Total | Cycle 1 | Cycle 2 | Cycle 3 | Cycle 4 | |||||
| 2011 | Jul | $10,897 | $9,116 | $5,168 | $1,305 | $1,303 | $1,341 | $430 | $1,351 |
| 2011 | Aug | 10,761 | 9,133 | 5,171 | 1,309 | 1,307 | 1,345 | 430 | 1,198 |
| 2011 | Sep | 10,818 | 9,169 | 5,189 | 1,315 | 1,313 | 1,352 | 433 | 1,216 |
| 2011 | Oct | 10,758 | 9,207 | 5,206 | 1,322 | 1,320 | 1,359 | 433 | 1,118 |
| 2011 | Nov | 10,638 | 9,235 | 5,222 | 1,326 | 1,324 | 1,363 | 435 | 967 |
| 2011 | Dec | 10,970 | 9,337 | 5,292 | 1,337 | 1,334 | 1,374 | 434 | 1,199 |
| 2012 | Jan | 11,278 | 9,668 | 5,459 | 1,391 | 1,388 | 1,429 | 428 | 1,182 |
| 2012 | Feb | 11,279 | 9,693 | 5,472 | 1,395 | 1,393 | 1,433 | 429 | 1,156 |
| 2012 | Mar | 11,522 | 9,730 | 5,490 | 1,401 | 1,398 | 1,441 | 438 | 1,354 |
| 2012 | Apr | 11,376 | 9,767 | 5,508 | 1,407 | 1,404 | 1,447 | 434 | 1,175 |
| 2012 | May | 11,247 | 9,811 | 5,529 | 1,415 | 1,412 | 1,455 | 436 | 1,000 |
| 2012 | Jun | 11,625 | 9,816 | 5,531 | 1,416 | 1,414 | 1,455 | 442 | 1,367 |
| 2012 | Jul | 11,434 | 9,841 | 5,539 | 1,422 | 1,419 | 1,461 | 442 | 1,152 |
| 2012 | Aug | 11,124 | 9,849 | 5,542 | 1,424 | 1,421 | 1,462 | 442 | 832 |
| 2012 | Sep | 11,847 | 9,846 | 5,542 | 1,423 | 1,420 | 1,461 | 449 | 1,551 |
| 2012 | Oct | 11,139 | 9,889 | 5,562 | 1,431 | 1,428 | 1,469 | 442 | 807 |
| 2012 | Nov | 11,219 | 9,894 | 5,568 | 1,430 | 1,428 | 1,468 | 449 | 876 |
| 2012 | Dec | 11,788 | 9,966 | 5,627 | 1,435 | 1,431 | 1,472 | 445 | 1,378 |
| 2013 | Jan | 11,583 | 10,079 | 5,676 | 1,456 | 1,453 | 1,494 | 471 | 1,033 |
| 2013 | Feb | 11,590 | 10,076 | 5,677 | 1,455 | 1,451 | 1,493 | 472 | 1,041 |
| 2013 | Mar | 11,827 | 10,089 | 5,684 | 1,456 | 1,453 | 1,496 | 475 | 1,263 |
| 2013 | Apr | 11,572 | 10,106 | 5,695 | 1,458 | 1,455 | 1,498 | 470 | 997 |
| 2013 | May | 11,786 | 10,136 | 5,716 | 1,460 | 1,458 | 1,502 | 471 | 1,179 |
| 2013 | Jun | c 11,734 | 10,136 | 5,717 | 1,460 | 1,457 | 1,501 | 475 | c 1,123 |
First of all, the amount for June 2013 is estimated. At least wait till the numbers are fact before you get too excited.
ReplyDeleteSecond, what if July or August comes out higher, then what?
Charles,
ReplyDeleteThis data skewers your "it's (mostly) all due to the baby boomers!" argument.
The baby boom goes until about 1955, meaning a large number of baby boomers have not aged out from DI to RI. You wouldn't expect to see "stasis" in disability payments until after most boomers had crossed that line if their increasing numbers and increased likelihood for disability were the main cause of the spike in payments...
What this apparent "stasis" DOES line up with is the slowing and reversing of the economic downturn that began in 2008. But of course, we won't talk about that.
3.6% cost of living adjustment at the end of 2011 and the 1.7% cost of living adjustment at the end of 2012
ReplyDeletemust be nice to get a raise from the government...something federal employees don't know much about. But apparently there's enough money to make sure people who aren't working get a raise. What a system!
Yep those folks have it great - I wish I was disabled and survived on a pittance! Then some years i'd get a 'raise' and recieve a tiny % larger pittance!
ReplyDeleteWell since you aren't working, it dhouldnt be equal should it?
DeleteHow about raise government employee health insurance to the level of the public. Thats a raise we would like to see!
ReplyDeleteIf it is soooo terrible working for the government, go work in the private sector.
Actually, my insurance with the government is more expensive and covers less than what I had working in the private sector.
DeleteGovernment's Share
ReplyDeleteThe Government's share of premiums paid is set by law. Amendments to the FEHB law under the Balanced Budget Act of 1997 (Public Law 105-33, approved August 5, 1997) authorized a new formula for calculating the Government contribution effective with the contract year that begins in January 1999. This formula is known as the "Fair Share" formula because it will maintain a consistent level of Government contributions, as a percentage of total program costs, regardless of which health plan enrollees elect.
For most employees and annuitants, the Government contribution equals the lesser of: (1) 72 percent of amounts OPM determines are the program-wide weighted average of premiums in effect each year, for Self Only and for Self and Family enrollments, respectively, or (2) 75 percent of the total premium for the particular plan an enrollee selects.
I don't think that most Medicare recipients know the federal govt pays 75% of the premium for Part B. That $109.40 per month looks a lot better than $437.60!
ReplyDeleteJust like government employees.
ReplyDeleteYeah...darn those overpaid government employees! I'd much rather my retirement or disability claim be taken by a high school graduate making $8.00 per hour.
Delete