A Professor Theorizes

     There’s a podcast out of the Wharton School of Business at the University of Pennsylvania about one professor’s theorizing about ways to convince people to work longer and delay starting their Social Security benefits. She wonders whether some lump sum bribe would work. 

     With fewer than 10% of people now waiting to age 67 to start drawing Social Security, I’m doubting this scheme would work. Health issues drive many, perhaps most, retirement decisions. People are much more into sufficing rather than maximizing income and wealth than this professor realizes. 

     Governments incentivize people to do some things and avoid doing others. This is an area where additional incentives seem over the top to me. Elderly poverty is certainly a problem but I don’t think this would be an appropriate or effective way of addressing the problem.

Minor But Interesting Development

     I'm noticing that some United States District Courts are now issuing opinions in adult Social Security cases which identify the plaintiff only by first name and last initial. It seems to be more than one Judge or District doing this. It’s being done to protect privacy. I'm sure that anyone who really wanted to could look in the Court's records and discover the real name. This would just protect privacy on Westlaw, the major online database of Court opinions. I just noticed it. I can't think it's been around long. It's not being done in any of the North Carolina Districts. Does anyone know where this started?

That's A Lot Of Payment Mistakes

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

When beneficiaries receive both DI [Disability Insurance] and WC/PDB [Workers Compensation/Public Disability Benefit], SSA [Social Security Administration] must reduce, or offset, their DI payments to ensure the combined amount of DI and WC/PDB does not exceed whichever is greater of (1) 80 percent of their average current earnings or (2) the total family benefits.

During DI claims processing, SSA staff should obtain WC/PDB information, verify WC/PDB payments, retain WC/PDB documents, and remind beneficiaries of their responsibility to report WC/PDB payments to SSA. SSA systems calculate DI payments based on WC/PDB information entered by SSA staff. Incomplete and inaccurate WC/PDB information can cause improper payments.

From 1 segment of the Master Beneficiary Record, we identified 4,558 beneficiaries awarded DI benefits in Calendar Year 2014 who indicated they had filed, or intended to file , for WC/PDB. From this population, we reviewed a random sample of 200 cases. ...

SSA did not always accurately determine WC/PDB offset during DI claims processing. Of the 200 cases in our review, SSA

• did not obtain sufficient information for 60 beneficiaries’ WC/PDB claims and/or payments before it processed their DI claims ;

• obtained sufficient WC/PDB information for 43 beneficiaries but did not accurately enter it into SSA’ s records ; and

• did not retain the documents that supported the WC/PDB information entered for 6 beneficiaries.

Additionally, SSA did not always provide required printed reminders to beneficiaries of their responsibility to report changes to their WC/PDB payments to SSA.

The insufficient information and inaccurate records caused SSA to improperly pay 25 beneficiaries $26 6,929—$207,941 in underpayments and $58,988 in overpayments. Based on these results, we estimate 11,400 beneficiaries were under- and overpaid $121.7 million because SSA did not properly offset their DI benefits when it processed their DI claims.

SSA subsequently detected the improper payments in 15 of the 25 cases after it processed the DI claim. In one additional case, SSA detected some, but not all, of the improper payments. For the remaining nine cases, SSA did not detect the improper payments. Although SSA found many of the improper payments, the errors that occurred when it processed the D I claims still had negative effects, including SSA’ s inability to recover some of the resulting overpayments. ...

     I don't know what the solution is. The workers comp offset is too complicated but I don't know how to simplify it without increasing unfairness. More staff would help. If there was some way of making state workers comp agencies report workers comp payments in a standardized way that would help but I fear that would just shift the mistakes to the state agencies. Things get complicated when cases get settled.
     By the way, I doubt that OIG was even looking at subrogation cases. Subrogation is where a claimant gets workers comp but later settles a third party claim. Let's say the claimant was in an on the job automobile accident. They get workers comp but sue the driver of the other vehicle. If they get a settlement or jury award, they have to pay back their workers comp. That means they should be treated as if they never received workers comp. The problem is that frequently the subrogation isn't reported to Social Security. I'm betting that claimants are underpaid in most subrogation cases, usually by tens of thousands of dollars and sometimes by hundreds of thousands of dollars.

COLA Estimated To Be 2.8%

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     The Senior Citizens League estimates that this year's Social Security cost of living adjustment (COLA) will be 2.8%, which would be the highest since 2012.

Report On Confirmation Hearing

     Federal News Radio is reporting on yesterday's confirmation hearing on Andrew Saul's nomination to become Commissioner of Social Security. It's a more complete summary than what I gave yesterday.

     The Federal News Radio piece doesn't go into it but don't think that if Andrew Saul is confirmed that he'll have to vacate his office on January 20, 2019. Although the term the Senate is considering at this point only goes through January 19, 2019, the Social Security Act allows a Commissioner to stay in office after his or her term ends until a new Commissioner is confirmed. Even if the Senate is controlled by Democrats next year and refuses to confirm Saul for a full term, he would be able to stay in office for the rest of Trump's term as President. By the way, if Saul is confirmed for a full term, he'll be 78 years old by the time he finishes his term. Maybe he'll be able to do it but that's not the sort of thing you can count on.

Saul Confirmation Hearing

     The Andrew Saul confirmation hearing has ended. There was no obvious opposition nor even any difficult questions. Saul promised to stay out of issues like privatizing Social Security. He couldn't be confirmed otherwise. Saul tried to downplay his association with the Manhattan Institute that has called for privatizing Social Security.

     One thing that concerns me is that Saul seemed to believe that his management abilities might improve backlogs at Social Security. It's understandable that he might think that. Usually, new Social Security Commissioners think the same thing. However, those backlogs, can't be managed away. They're caused by lack of operating budget. Believing that backlogs can be managed away got previous Commissioners in trouble. They came up with schemes that they thought would work wonders but which only made the problems worse. I may have to dig up some old posts describing what happened before but I think those who have been around a while know implicitly that the backlogs can't be managed away.

     In his opening remarks, the chairman of the Committee, Senator Hatch spoke about why only the nomination for the term ending January 19, 2019 was being considered. He said it was to avoid setting a precedent about confirming someone for a term that only begins in another Congress. The ranking member, Senator Wyden, however, promised that the Saul nomination for a full term would be taken up in the next Congress. I have no idea why he would make such a promise. I hope he got something in return. However, if Wyden is Chairman of the Committee next year, the nomination could still be derailed in other ways. At least I hope it would be. I don't see why Democrats would want Saul in that position until January 2025.

Saul Nomination Hearing Starts At 10:30 Today

     The Senate Finance Committee nomination hearing for Andrew Saul to become Commissioner of Social Security begins at 10:30 today. You can watch online.

     There may be fireworks. Social Security Works has put out a press release strongly opposing the nomination.

     Social Security Commissioners have fixed six year terms. The nomination being considered today is only for a term ending in a little more than three months. Why bother confirming him? The Social Security Act says that once confirmed a Commissioner can stay in office after his or her term has ended until a successor is confirmed. Confirm Saul now and he can stay in office as long as President Trump stays in office. Perhaps they'll try later to confirm him for the full six year term beginning in January 2019. Perhaps not.

Three New Rulings

     The Social Security Administration will publish in the Federal Register tomorrow three new Social Security Rulings. On cursory examination, Social Security Rulings 18-01p Determining the Established Onset Date (EOD) in Disability Claims and 18-02p Determining the Established Onset Date (EOD) in Blindness Claims are of little consequence. 

     The third may matter a little although it is an issue that rarely arises. From Social Security Ruling 18-3p, Failure to Follow Prescribed Treatment:

... We will not determine whether the individual failed to follow prescribed treatment if the treatment was prescribed only by a consultative examiner (CE), medical consultant (MC), psychological consultant (PC), medical expert (ME), or by a medical source during an evaluation conducted solely to determine eligibility to any State or Federal benefit. ...

Prescribed treatment does not include lifestyle modifications, such as dieting, exercise, or smoking cessation. ...

The following are examples of acceptable good cause reasons for not following prescribed treatment: ...

The individual’s fear of surgery is so intense that it is a contraindication to having the surgery. We require a written statement from an individual’s own medical source affirming that the individual’s intense fear of surgery is in fact a contraindication to having the surgery. We will not consider an individual’s refusal of surgery as good cause for failing to follow prescribed treatment if it is based on the individual’s assertion that success is not guaranteed or that the individual knows of someone else for whom the treatment was not successful. ...

     I don't see the point of asking  a medical source to give information about their patient's fear about having surgery. Wouldn't it make more sense to rely directly upon the patient's own testimony about those fears? Isn't this an inherently subjective matter? Why rely upon statements from a physician who regards their patient's objections as ridiculous? This seems like it's searching for a way to hurt fearful people.