We are enablers. Specifically we as a people are enabling people to not work and to not contribute to society. We are enabling states as well by allowing them to shift the burden of responsibility for welfare and Medicaid to the federal disability and Medicare programs. How is this happening? What’s going on?
In case you missed it, the federal disability program is hitting the news in a big way. Chana Joffe-Walt from NPR’s Planey Money did some excellent work on a story for This American Life that is well worth a listen. Then, this morning, the WSJ is all over it sharing a lot of the same information.
To me, this story is all about incentives.
During the Clinton era, revisions to the welfare program created a system that encourage people to leave the system (hopefully to work) AND shifted much of the burden of welfare from the federal level to the states. The result was that welfare rolls were reduced incredibly over a short period of time and much was made of the “success”. The unforeseen consequences were that states needed to get these welfare recipients off their rolls as fast as possible so they not only encouraged people to find jobs, they also hired consulting companies to mine their welfare data for the people who would most likely be able to pass the eligibility requirements to go on disability (paid for at the federal level). Then, they paid these consultants thousands of dollars for every person they could convert to disability off of welfare. This was a completely rational decision on the part of the states which clearly ran counter to the underlying goal of the federal government.
Over time the number of people on disability has continued to rise while the welfare numbers have somewhat stabilized. With the recent recession and an ageing Baby Boomer population the number of people applying for disability has skyrocketed, and their success rates of getting on disability have increased thanks to the state-sponsored consulting groups and lawyers paid for by the government who have found a giant cash cow in this perverted process. Meanwhile the burden that disability earners places on Social Security are speeding its demise.
And, going back to incentives, unlike welfare which is temporary, disability is permanent. Thus, there is no incentive for anyone receiving disability to come off of it unless they have an employment opportunity that is incredibly stable, is able to accommodate their disability, and pays well. The anecdotes in the This American Life story demonstrate that in many parts of the country jobs like that simply don’t exist for those collecting disability checks. Instead, the incentive is to never get better. If you stay on long enough (2 years), you then qualify for Medicare too. The incentive is to get your children on disability, and never let them get off. The incentive is to not contribute to society through work. Again, these are rational decisions based on the way these programs run.
I don’t have the answers to this problem. It’s far bigger than me. And, I by no means am trying to throw anyone truly suffering from a disability under the bus, but I am pointing out that the incentive structure set up in this country is all fucked up. Everyone should know that, and until we do something about it we are enabling it ourselves.
I know my readers are smart. How do we as a society begin to address this problem?