Understanding the Growth in Federal Disability Programs: Who Are the Marginal Beneficiaries, and How Much Do They Cost?

by Adele Kirk, University of California, Los Angeles

SSI and SSDI, the two work disability programs administered by the Social Security Administration (SSA), have been marked by concerns about target efficiency since their inception.  Despite these concerns, entry criteria have been gradually relaxed over the years, and enrollment has grown tremendously.  Some growth is attributable to demographic shifts, such as the aging of the population.  But research has identified other important drivers of growth in the program, including economic incentives to apply for benefits and the relaxation of disability screening criteria.

While administrative data can document some aspects of program growth, they provide few insights about how much heterogeneity might exist among beneficiaries in areas such as health status, residual work capacity, and costs to the system.  This study will use a newly available data linkage initiative that links more than a decade of cross-sectional National Health Interview Surveys (NHIS) with retrospective and prospective administrative data from SSA and the Centers for Medicare and Medicaid Services (CMS). This study will provide new insights into the characteristics and system costs of  policy-relevant subsets of disability beneficiaries.  These analyses will use two different definitions of a marginal beneficiary: those who self-identify themselves as non-work-limited in the NHIS interview and “administratively marginal” beneficiaries whose administrative records suggest that they benefited from changes in SSA review criteria.  A final analysis will explore the degree of overlap and disagreement between the two definitions regarding who is identified as marginal.

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