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January 27, 2017 at 08:11 AM
(Bloomberg) — President Donald Trump’s federal hiring freeze may exacerbate a backlog of appeals for Social Security Disability Insurance that has grown so big that an average case takes more than a year to be heard.
“These are people who are desperate,” Judge Marilyn Zahm, president of the Association of Administrative Law Judges union, said. “There may be a hiring freeze on federal employment, but there’s no freeze on people getting older, people getting sicker, people having injuries and accidents, and people needing disability insurance.”
Related: 4 juicy disability insurance awareness market segments
Zahm is among around 1,650 judges tasked with considering claims from Americans whose initial requests for Social Security Disability Insurance benefits have been denied by state agencies.
As of May 2016, the average wait for an appeal to get processed was 526 days, according to the Social Security Administration’s inspector general. A total of 1.1 million people were waiting for a decision on their eligibility for benefits under the sixty-year-old program, which provides income support to people who paid into the system and due to disability will be unable for at least a year to work.
The ranks of beneficiaries in the program have grown substantially in recent years: Whereas fewer than 2.5 percent of working-age Americans got checks in 1990, more than 5 percent did in 2015.
Issuers of commercial disability insurance have a stake in the efficiency of the SSDI program, because many deduct a beneficiary’s SSDI benefits from what the private coverage will pay.
Last year the Social Security Administration announced that, along with efforts to streamline the process, it wanted to grow the ranks of judges to 1,900 by the end of fiscal year 2018.
Related: SSDI: Still on track to go broke in late 2016
That may be impossible now that Trump, in one of his first executive actions, has imposed a federal civilian employee hiring freeze. Trump’s order allows agencies to exempt staff needed for “national security or public safety responsibilities,” and authorizes the director of the Office of Personnel Management to grant exemptions. The order requires the Office of Management and Budget to develop a plan within 90 days for shrinking the workforce, and says the blanket freeze will expire once that plan is implemented. White House press secretary Sean Spicer told reporters Monday that the order “ensures that the American taxpayers get effective and efficient government.”
