Social Security Disability Cuts on the Horizon
If you were on the fence about purchasing private disability insurance, things may be getting a little more urgent soon. That’s because the Social Security Disability Insurance program, which has been under serious actuarial pressure for a while, may soon be forced to slash benefits, unless Congress moves to shore it up with additional sources of revenue.
Background
The Social Security Disability program is designed to provide cash assistance to individuals who are able to demonstrate disabilities that prevent them from finding gainful employment. However, unlike private disability insurance, the Social Security Disability program only provides assistance to those who are certified as totally and permanently disabled. As of 2015, the average monthly benefit was $1,165 per month, with the most severely disabled receiving up to a maximum of $2,663 per month.
The definition of disability the Social Security Administration uses to qualify for benefits is strict:
You must have severe physical or mental impairment that leads to substantial limitations. These limitations must prevent you from accomplishing any gainful employment in any occupation whatsoever.
Furthermore, the disability must be expected to last at least 12 months, or must have already thrown you out of work for 12 months, or is expected to result in your death.
Social Security disability is notoriously difficult to qualify for. If you don’t meet these extremely high hurdles, your claim will be denied.
The average wait time before benefits are received is about a year long, and applicants are routinely denied on the first pass – especially if they don’t have a disability attorney or claims expert helping them with their application.
The Social Security Disability Trust Fund is funded via payroll tax contributions, and has been running a deficit for many years. As the economy got worse in 2008-2010, the ranks of those collecting benefits swelled as it became easier for some at the margins to qualify for benefits rather than find scarce employment. The increase in the number of beneficiaries added to the actuarial problems, and the gap between revenues and benefits widened considerably. Currently, although the economy has recovered substantially since then, there are not enough workers currently contributing to the program to cover benefits for the disabled.
According to the latest Social Security Trustees Report, unless Congress intervenes, the trustees will be forced to slash the already-meager disability benefits of current recipients by nearly 20 percent – starting as soon as the end of 2016.
It’s a simple matter of mathematics: The trust fund is nearly depleted, and the payroll taxes coming in are sufficient to cover only 81 percent of current benefits.
That’s going to be disastrous for the nearly 10 million Americans who currently rely on the program to cover their very basic housing and food expenses.
What Physicians Should Know
If you’re a physician, or expect to become one soon, owning your own separate, private disability insurance coverage is critical. For most physicians, the career requires substantial mobility, good eyesight and hearing, and in some specialties, frequent physical intervention. For example, just being an orthopedic surgeon requires hours on your feet and substantial strength just to do the basic procedures required in your specialty.
Even relatively minor disabilities that don’t even come close to qualifying for Social Security Disability can cause significant career disruption and even cut off your ability to earn an income as a physician completely. Meanwhile, you may have a mortgage and a few mouths to feed.
Even if you do qualify for Social Security Disability, the amount you receive will not even come close to keeping you and your family in the lifestyle you worked so hard to provide for them. Your entire financial house of cards could come crashing down around you.
Doctor Disability Insurance is the nation’s leading insurance agency specializing specifically in protecting the incomes of physicians and other medical professionals.
We understand that you have had to make sacrifices to get to where you are. We are committed to helping you protect your most valuable asset: your ability to earn an income.
Doctor Disability Insurance, Inc. is an innovative, one-stop service that makes disability insurance shopping quick, affordable, and easy to understand. Physicians save time and money by comparing plans and prices from multiple insurance companies. The site provides free quotes from leading names in the disability insurance industry along with friendly and knowledgeable customer support. The best values in the insurance industry are located in one place and are available any time doctors are ready, including late at night and on weekends.
Based in San Clemente, California, President and CEO Charles Krugh is a Certified Financial Planner with more than 15 years of experience working with people in the medical industry.
Call us toll free at 866-899-7318 to speak to one of our disability insurance professionals.