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August 10, 2008 at 04:00 PM
Disability insurers plan to aggressively defend themselves against complaints by a powerful U.S. senator that they are hurting the Social Security Disability Insurance program by encouraging claimants who appear not to qualify for SSDI benefits to file SSDI claims.
The response of 9 disability insurers to requests for information from Sen. Charles Grassley, R-Iowa, is due soon.
Grassley requested the information July 21 from Unum, Reliance Standard, Aetna, Cigna, Hartford, Lincoln, MetLife, Prudential and Standard.
In a statement, Grassley contended that “the backlog of Social Security disability cases is abominable, and the last thing those who rely on Social Security need is for insurance companies to be clogging up the system by forcing ineligible applicants to apply.”
He added that, “Policy makers need to know what the insurance companies are doing in order to help the Social Security Administration provide benefits to those who are eligible,” he added.
But, in a July 30 letter to Grassley, Karen Ignagni, president of America’s Health Insurance Plans, aggressively defended the insurers. It is not correct, as the New York Times asserts in a story she wrote, “that private disability insurers compel claimants to submit ‘dubious’ applications for SSDI benefits, or that SSDI applications by privately insured claimants are ‘overloading’ the Social Security disability program.”
She told Grassley that about 2.5 million individuals annually apply for SSDI, versus about 200,000 claims that private DI carriers receive each year–or about 8% of the total.
Of course, she said, “not all of these privately insured claimants file for SSDI and, of those that do, two-thirds are ultimately awarded SSDI benefits.”
Additionally, by providing claimants with expert assistance in completing the application process, private insurers are making the SSA’s review of such applications easier and faster, she said.
The insurers are being asked how many claimants they required to apply for SSDI, how many appeals were mandated and how they pre-screened to ensure claimants had a real chance of qualifying for SSDI benefits.
