In testimony given to the Senate Committee on Finance on July 24, 2014, which he styled “The Foreseen Trend in the Cost of Disability Insurance Benefits”, Stephen C. Goss (no relation to this writer), Chief Actuary of the Social Security Administration Stated:
“Many analysts have raised questions about the “sustainability” of the recent period of rapid growth in the numbers of Disability Insurance beneficiaries and the cost of their benefits. I am glad to report that his period of rapid growth: (1) was foreseen, (2) can be explained, and (3) is now at its predictedend.” Mr. Goss went on to explain that over the next 20 years, through about 2035, the share of the working age population that is aged 45-64 (disability-prone ages) will commence shrinking rapidly, putting a halt to the rise in disability insuranceprogram costs. He noted that thispopulation shift has been forecast for decades.
So was Social Security’s Chief Actuary right? Apparently so. The following table is drawn from SSA’s statistical reporting of disability insurance claims made and awarded. It compares the first quarter of each year beginning in 2012, and calculates the percentage decline in both applications and benefit awards in quarter over quarter.
|Quarter||Applications||Percentage Decrease||Awards||Percentage Decrease|
The downward trend in the number of applications – and therefore cost to the disability insurance program – is obvious, and is just what was reported when Mr. Goss testified before Congress last July.
Actuaries provide assessments of financial security systems, analyzing their complexity, their mathematics, and their mechanisms.Insurance actuaries don’t spend a lot of time reading political tea leaves or engaging in demagoguery – they deal in the hard reality of numbers and demographic trends.
Is the disability program in some financial crisis that calls for the slashing of benefits to disabled persons? Hardly, although facts and complexity rarely intrude when political power is the real game being played.