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Ouch! Disability cases in Minnesota up 50 percent in decade

ST.PAUL -- It's the other Social Security train wreck that you rarely hear about, and it's projected to go into the red a lot sooner than the other one -- 2016.

Supported by deductions from workers' paychecks, the Social Security Disabilityprogram continues to move on schedule toward insolvency in two and a half years as claims mount nationwide, including Minnesota.

"I study government programs for a living and I went, wow, this is quite a mess," said Tad DeHaven, a budgetanalyst for the Cato Institute. "I come across a lot of stuff in government programs, but this one is clearly out of whack and definitely not what was originally intended."

Newly released figures show 124,641 Minnesotans received Social Security Disability payments in 2012, up 54 percent over the past decade, compared to a 44 percent overall increase nationally.

Government officials say demographicsdrive the spike in disability claims, starting with aging baby boomers who hit the wall late in their careers when disabilities tend to strike more often.

"The sheer number of baby boomers is going from about 35 million now to about 70 million in a couple of decades," said Doug Nguyen, a Social Security Administration spokesman. "So you have the aging of the baby boomers, the overall growth of the working age population and then as the boomers age, they reach their years where they're more prone to being disabled."

A National Bureau of Economic Research study indicates that the aging workforce accounts for some, but nowhere near all of the expansion in the disability rolls -- 15 percent of the increase in claims by men and 4 percent of the increase in claims by women.

Some analysts maintain that diagnosis of disabilities under the program have become more subjective with lower back and muscle pain and mental disorders now topping the reasons listed for disability claims.

Critics also point out that the number of Social Security Disability cases moves upward with the unemployment rate. Minnesota went from 99,717 disability recipients in 2007 just before the recession to 124,614 in 2012, a 25 percent spike in beneficiaries.

"When you toss in the subjectivity, the issue of trying to determine a disability based on mental problems, yeah you get a program that's become something it wasn't supposed to be," said DeHaven, who has an analysis for Cato on the issue due out soon. "It's become partly a quasi-unemployment insurance, quasi-welfare program in a lot of ways."

SSA spokesman Nguyen declined to comment on diagnoses for disability.

"All I can say is the main reasons for the increase are the demographic changes overall," Nguyen said. "Certainly, the recent economic situation adds to all these factors in terms of people may decide to apply for disability benefits if they're having difficult going to work."

Last year, Minnesota ranked 29th among states in total number of Social Security Disability recipients. Some 60,000 state residents filed applications for disability benefits or underwent a review in order to continue receiving an average monthly payment of $1,130.

Another factor behind the glut of disability applications surfaced last week during the first in a series of planned hearings by the House Oversight and Government Reform Subcommittee on Energy Policy, Health Care and Entitlements. The role of legal firms that advertise their services to potential disabled clients on television came under scrutiny in a hearing on the backlog of 1.3 million cases under review by administrative law judges.

"I no longer feel that I am serving the American public," Thomas W. Snook, a U.S. Administrative Law Judge in Miami, told the committee. "I feel I am serving the claimants' representatives, especially a few large law firms; and I am powerless to do anything about it."