The timing couldn’t be worse. Medical disabilities are having a growing financial effect on Americans’ lives — at the same time that the struggling economy is presenting its own challenges. For example, according to a 2008 Harvard Law School study, nearly 1.5 million Americans are in jeopardy of losing their homes due to a medical disability.
To discuss the effects that a disability can have on an individual, their family, and the economy as a whole, the Council for Disability Awareness (CDA) convened an expert panel on May 25 at the MassMutual Learning and Conference Center in Chicopee, MA to broadcast a live webinar, “Disability Update: Timely Tips, Trends and Topics.” Each of the three panelists offered a unique perspective on the risks that disability poses to American workers and families — read on for the results.
Current challenges — and opportunities
According to Dr. Andrew Crighton, chief medical officer at Prudential Financial, a new, younger generation of workers is affected to a greater degree by stress and mental health issues than previous generations have been, leading to a surge of new patients into the health care system. Primary care physicians are in increasingly short supply. These trends, combined with the anticipated flood of new patients after the implementation of health care reform, may overwhelm existing providers, limiting access to care when disability strikes — and making disability insurance more valuable than ever.
Workers can’t count on Social Security
Dorcas Hardy, principal of D.R. Hardy and Associates and former commissioner of the Social Security Administration, also explained the realities that face workers who look to Social Security for income protection when disability strikes.
According to Hardy, the Social Security Disability Insurance program is intended to be a “floor of protection” for workers with severe disabilities that prevent them from doing any work at all. The definition of disability is stringent: Workers must have a significant disability that is expected to last 12 months or more or to result in death, and that prevents a worker from performing any substantial, gainful activity.
SSDI is an “all or nothing” program, Hardy said; even if workers can meet these criteria, the process can be lengthy. For example, only 37 percent of workers are approved based on their initial application, and there can be up to four levels of appeals if the initial application is denied. In some cases, the entire process can take years. The system has faced a flood of applications — 2.6 million in 2009 alone — and Hardy reported that more younger people are applying than in the past.
The importance of being prepared
As the final speaker in the CDA webinar, John Nichols, president of Disability Resource Group, spoke firsthand about the effects of disability. As a fully recovered survivor of an accident that left him disabled for six years, Nichols provided a glimpse into the realities of disability and the tremendous advantage of protecting one’s paycheck with disability insurance. As Nichols put it, “disability insurance provided me the financial wherewithal to be able to focus on rehabilitation, rather than my disability.”
Nichols, who now advises potential disability insurance clients, discussed the importance of helping clients look at the bigger picture of disability insurance, getting them to think about their futures, as well as the dreams and goals they need to protect.
Nichols closed with another alarming statistic: According to a 2009 Cambridge Hospital/Harvard Medical study, 62 percent of all bankruptcies could be attributed to a medical issue. And 75 percent of the people out of that 62 percent had health insurance when the medical condition hit. As Nichols pointed out, however, many of them didn’t have income protection.
Nichols’ final words were a fitting end to CDA’s webinar: “It’s our responsibility, as advisors, to communicate the message — not just now during Disability Income Awareness month, but for the rest of the year — on the value of protecting one’s paycheck.”
To view a video of the CDA webinar “Disability Update: Timely Tips, Trends and Topics” and learn much more about the risks of medical disabilities and how disability insurance can help protect against your clients, visit the Council for Disability Awareness’ website.
Barry Lundquist is the interim president of the Council for Disability Awareness. He can be reached at [email protected] or 207-774-2634.