Underpayment Problems

     From a recent report by Social Security's Office of Inspector General (OIG):

An OASDI [Old Age, Survivor's and Disability Insurance] underpayment accrues when a beneficiary is due a partial or full monthly benefit amount that has not been paid. SSA’s automated systems should detect and process most underpayments due living beneficiaries. However, when SSA’s systems cannot process these underpayments, SSA employees must manually issue them. Further, SSA employees must manually process all underpayments due deceased beneficiaries.

Manually issued OASDI underpayments of $6,000 or more require a secondary review. However, SSA policy does not require a secondary review of manually issued underpayments less than $6,000. ... 

Of the 250 sampled underpayments, SSA issued 62 (25 percent) incorrectly, with payment errors totaling $90,235. Specifically, SSA employees issued 

• 45 underpayments totaling $69,348 more than what was due the beneficiaries — we project SSA issued 187,620 underpayments totaling approximately $289 million more than what was due and 
• 17 underpayments totaling $20,887 less than what was due the beneficiaries — we project that for 70,880 underpayments, SSA did not issue approximately $87 million that was due.

     You might think that the solution would be to just require supervisory approval of all underpayments but there are two problems with this. First, it would require more staff time and the agency lacks the personnel to get its current workload done. Second, supervisory approval would only get you so far. Supervisors also make mistakes, especially when they're overworked.

     If you want better performance from Social Security, you're going to have to give the agency additional operating funds.

Early Intervention For Schizophrenia Not Preventing Disability

     Schizophrenia is a truly horrible disease. It's tragic to see once promising young people reduced to unstable, unproductive lives haunted by the madness of schizophrenia. Schizophrenia always starts before age 30 but continues for the rest of a person's life. There is no cure for schizophrenia. The treatments available generally make long term institutionalization unnecessary and can prevent frequent hospitalization but do little to restore normal functioning. In particular, the treatments available don't touch the negative symptoms of schizophrenia -- lethargy and inability to have appropriate emotional and social responses. The negative symptoms may not sound that bad but they are actually devastating. Everyone familiar with the disease prays for some treatment that would improve the lives of schizophrenics.

     One approach to schizophrenia that seemed to have promise was early intervention -- identifying schizophrenics as soon as possible and offering them intensive treatment. This led to various Recovery After an Initial Schizophrenia Episode (RAISE) studies funded by the National Institutes of Mental Health (NIMH).

     Some results from a RAISE study are available and they're not encouraging, at least insofar as Social Security might be concerned. Here's an excerpt from the abstract of a RAISE study:

Method: The Recovery After an Initial Schizophrenia Episode–Early Treatment Program (RAISE-ETP) study, a 34-site cluster-randomized trial, compared NAVIGATE, a coordinated specialty care program, to usual community care over 2 years. Receipt of SSA benefits and clinical outcomes were assessed at program entry and every 6 months for 2 years....

Results: Among 399 RAISE-ETP participants, 36 (9%) were receiving SSA disability benefits at baseline; of the remainder, 124 (34.1%) obtained benefits during the 2-year study period. The NAVIGATE intervention improved quality of life, symptoms, and employment but did not significantly reduce the likelihood of receiving SSA disability benefits. Obtaining benefits was predicted by more severe psychotic symptoms and greater dysfunction and was followed by increased total income but fewer days of employment, reduced motivation (e.g., sense of purpose, greater anhedonia), and fewer days of intoxication. [I'm not sure what sort of intoxication they're talking about. Substance abuse isn't a part of schizophrenia. Some schizophrenics have substance abuse problems like some schizophrenics have high blood pressure but as far as I know there's no connection.]

Conclusions: A 2-year coordinated specialty care intervention did not reduce receipt of SSA disability benefits. There were some advantages for those who obtained SSA disability benefits over the 2-year treatment period, but there were also some unintended adverse consequences. Providing income supports without impeding recovery remains an important policy challenge.

Not Much Fraud To Talk About

     The Social Security Subcommittee of the House Ways and Means Committee held a hearing yesterday on antifraud efforts at Social Security. The hearing was more notable for what didn't happen than what happened. There was no new announcement of some fraud ring preying upon Social Security. I'm not sure how much longer Republicans will try to milk the Conn case but they don't have a new case to talk about.

     The agency witness talked about anti-fraud computer systems that Social Security has installed. Apparently, a fair amount of money and time has gone into this. However, the agency witness didn't have anything to say in his written remarks about fraud that had been uncovered using these systems. Maybe it's too early to expect results from these systems, maybe Social Security hasn't tried hard enough to make the systems work or perhaps organized fraud at Social Security is actually quite uncommon. I think the Republican leadership of the Subcommittee would really, really, really like for Social Security to uncover lots of organized fraud since that would be in keeping with their political and social beliefs. I think they're going to be disappointed. If there is anything organized, it's probably quite small and more likely involves Social Security employees than members of the public.

     Update: Here's a report from the right wing Washington Times on the hearing. You can sense the disappointment pervading the piece.

Don't Plan On Working On And On

     From CNBC:

A stark reality of retirement planning is that your future is riding on the quality (read: plausibility) of your assumptions. Abject optimism can be dangerous. ...

[A] potential flawed assumption is that you will be able to keep working past 65. Yet the recently released 2017 Retirement Confidence Survey by the nonpartisan Employee Benefit Research Institute finds that more than half of workers say they expect to still be on the clock past age 65. By comparison, less than 15 percent of today's retirees kept working that long. ...

It's simply too risky to assume you will indeed be able to work longer. A survey by the Transamerica Center for Retirement Studies (TCRS) found that nearly two-thirds of retirees left the workforce earlier than expected because they were laid off, reorg-ed out of a position, or due to general unhappiness with a job. Only 16 percent of retirees who exited the work force earlier than they expected did so because they felt they could financially afford to.

Moreover, a new report from Prudential puts a dollar value on why your current employer may not be inclined to do back flips to keep an older you happy and engaged. The estimated one-year cost to a firm when an employee delays retirement: $50,000. ...

     And they're not even mentioning the effects of health conditions on retirement decisions.
     Raising full retirement age to 67 was a bad idea. Increasing it further would be a terrible idea. People need security in retirement and Social Security is the only assurance that the vast majority of Americans have or will ever have.

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Comments Will Now Be Moderated

     It's become apparent to me that most of the comments posted on this blog are now coming from two sources, paid shills and cranks. The shills bother me worse than the cranks. When I see multiple comments filed at 3:30 in the morning all saying that government employees are lazy, Social Security is horribly inefficient and its management is corrupt, I'm pretty sure it's been posted by paid shills who are seeking to undermine funding for Social Security. Russia isn't the only one who employs these shills. It's a cheap way to influence public opinion. Trump's election suggests that it can make a difference. Yes, I do believe the Koch brothers and others are this devious.

     I will now moderate the comments. If you submit a comment, it won't be posted until I have reviewed it. I'll try to act on the comments promptly but I'm not making any promises on the time frame. I have a life. I'm going to reject repetitive or abusive comments. I'm not planning to censor them otherwise. It's my blog so I get to make the decisions. I'd be delighted if others would start their own Social Security blogs. Many voices should be heard.

Life Expectancy And Retirement Benefits

     The National Bureau of Economic Research has done a study on increases in life expectancy and retirement benefits in the United States. A few years ago when this study was begun there was much talk of increasing the full retirement age for Social Security benefits. That talk has mostly died away. It's politically impossible now. It's hard to imagine it becoming politically possible in the foreseeable future. Perhaps the least unlikely change would go in the opposite direction -- lowering the age limit for Medicare from 65 to 50 or 55. There is a fair chance of that happening should Democrats control the White House and Congress after the 2020 elections or even if Democrats control Congress after the 2018 elections.

     The study points out what was already well known, that while there has been an increase in overall life expectancy, those with lifetime earnings in the lowest 40% are experiencing little or no increase in life expectancy. This is increasing the gap in lifetime benefits between those with the highest and lowest lifetime income by $130,000.     

     The study contains this interesting graph (click on it to see it full size):

     To explain this, the 1930 cohort is people born in 1930 and the 1960 cohort is people born in 1960. Quintile 1 is the 20% of people who have the lowest lifetime earnings while quintile 5 is the 20% of people who have the highest lifetime earnings.

     Note that there was essentially no change between the 1930 cohort and the 1960 cohort. People make silly arguments about how different generations of people are vastly different. I've never seen that. 

     Note that poor people are much more likely to draw disability benefits than wealthy people. It shouldn't be hard to understand why. The same factors that make people poor make them more likely to become disabled. Low cognitive abilities, low educational attainments and serious chronic mental illness all predispose to both poverty and disability. Also, poverty leads to poor health care access which also predisposes to disability. None of this has anything to do with rural versus urban poverty. There's just more poverty these days in rural areas than urban areas.

Glad This Didn't Happen Here

     U.S. Social Security has its problems but it does an excellent job of protecting data security. Look to India for an example of how things can go very wrong. Somehow, the names, addresses, bank account information, and Aadhaar number (the equivalent of a U.S. Social Security number) of 1.4 million Indians were posted on a Indian government website.