just means the ability to pay the scheduled benefit in full in a timely fashion. in order to do that we have to have money in the trust fund for one simple reason. by law social secretary funds do not have the ability to borrow. much of the rest of the government if it is in need of it doesn't have the ready cash reserves to pay for things, it can borrow them. social security trust fund cannot do that by law so we have to have it above zero and that's why when we see the numbers dropping as you do outsourced 2036 or even earlier for the di trust fund, that represents a real problem that the congress has to address. should mention though that for the di fund under our projections as the year 2018, assuming nothing were done we would still have enough continuing income coming in from taxes that are scheduled in the law at the time to pay full 86% of the scheduled benefits. it not as if the trust and goes out of business and we don't have any more payments but we

would be 14% short of the funds necessary to pay the full schedule benefit on a timely basis. so if we can go to the next slide, this gives a different work. rather than working in looking at the trust funds, this next slide gives you a look at what the cost of the oasi and yet, the two social security programs look like as a percent of gross domestic product. it's just the total value of all the reserves we produce on our shores in this country. you can see, when you look at this, the lines for the oasi and old-age and survivors insurance fund and for the combined old-age and survivors insurance fund the insurance, that the cost as percentage of gdp, which is what these one drugs are, has

been pretty constant for the combined program about 4.3% of gdp ever since 1975. over the next 20 years it will be ramping up, what we call level shift, shifting to a higher level, and in stabilizing. the reason for that is something that has been discussed much, the fact with a drop of the birthrate, the baby boom will retire, will be found by smaller birthrate generations, so we have a fundamental shift in the age distribution of our population. while this will be happening over the next one years for our retirement program, you can sort of see in a subtle way on this for the disability insurance program it's really already happen. if we flip to the next slide, you get a better look at it. this slide shows you the fact that the cost of disability insurance has already risen from 1975 to 2010, you can see the cost of the program, which is

the blue line, has been rising and rising pretty dramatically. you can see the bomb ride around in history where we are not because of the recession. there's been a general price up in the cost to the program as a percentage of gdp. we project that will be stabilize and may be declining ever so slightly going into the future. so the question of course is why has this happened and what should we believe will be happening in the future. and for that we look at our ways and means subcommittee staff, asked us for doing back in december to address this issue and look at what the drivers of social security disability costs really are. so in regard to that we looked at it and one of the first things of course, one of the first things that comes up is the number of workers we have for each beneficiary, and back when the baby boomers when the prime working age is we had a lot of workers for every beneficiary. that made the cost as a percentage of gdp, cost as a% of

our taxable payroll relatively low. but you can see how we are now moving across time into position of having a much lower ratio of workers per beneficiary. this is happening and has happened precisely as the baby boomers have moved from where they were 20 years ago, ages 255 to 44. to ages 45-64, which is where the baby boomers are essentially now, or in 2010 and 2011. those are ages which are prime age for people receiving disability benefits. so let me flip to what we refer to as sort of our first cost of social security disability, and beyond those demographic factors. just the aging of the baby boom and being replaced by smaller generations coming behind the first one of these drivers is just being insured. being a person of an age where you could receive disability

benefits, is it enough to get benefits to our program have to be insured. there's work requirements. you can see here the percentage of the population, mailing the know, it has been rather constant for men around 75%. but over the last 25 or 30 years the percentage of women who aren't disability insured has risen quite dramatically. and the reason for that is because there are certain work requirements, years of work requirements, and you have to essentially work five out of the last 10 years, and in the past women when they got in the '40s and '50s, many of them did not satisfy that work requirement. we have moved over the last 25 years to a point where women are essentially at parity with men in terms of satisfying this work requirement. so we've moved up towards women being about as much insured and we project a continued into the future. the other real driver of disability caused is given that you're insured what is the probability you are going to

become disabled, file for benefits and get the benefits allowed for you? we can see the blue line here as males, and it bounces a lot for lots of reasons. but you can see it's staying in there, although but over five per thousand on the males. females, however, if you go back to around the 1990 period, it's been rising quite dramatically. female disability incidence rates, that is the likelihood of becoming disabled, given your insured, is to be on the order of half or a little more than half of what male disability incidence rates were, but they also have moved up to essential parity with men over time. both of these factors are ones where women have moved up to parity with men, we don't expect a crossover so basically this change has occurred, has played out. we don't expect further changes. this is an interesting slide you might want to look at later.

this is essentially a slide showing the ups and downs of our disability costs, and some of the reasons for it. recessions, like the most recent one, obviously have a lot to do with this but there've been a number of changes in the nature of how we define disability. going further on these drivers, so the effect of these drivers has resulted in our having disability prevalence rates, which is the percentage of people who are insured, that are actually receiving disability benefits. and our disability prevalence rates have been rising for males and females over the last 20 years, and you will not be surprised to see we are projecting him to be fairly flat in the future because the drivers we've been talking about, have all really happened already. but you can see for the males though where most of these have not been operating, then they'll rates have been rising and that brings us to one more driver

that i would like to put up here to show you. one other thing that's been happening and our disability program is that there's been a shift in our disability incidence towards a higher extent of disability incidence at younger ages. it used to be it was mainly people 50 and older. we have somewhat of an increase in the number of people at younger ages. and this slide show you the back in 1980 for both men and women the disability incidence rate was only about one-fifth, only 20% as large for people at ages 25-44, as compared to the incident rate for people at ages or five-64. it was much, much lower. but by 2010, that ratio has really change. now people at age 25-44 instead of only one-fifth are a little closer to one-third as likely. that's a pretty big change. the shift towards more of our people coming out of the disposables at younger ages of

course means that they will tend to be receiving benefits for a longer period of time. assume they don't recover. and let me just flip to one last little slide. i will skip over a couple that we have here, but the one last little slide i would like to just show you is the history of what our projections are or once people start received disability benefits, they stop receiving disability benefits of course when they reach retirement age they are transferred over but disabled workers whatever else has a chance of dying but they also have a chance of recovery. the recovery rate has been around 1% of people under disability rolls. we project that will stay at about that. so since i am out of time, i would just completely conclude with repeating one slide that you've already seen. showing you what our projections are, and john now seen the basis for. by we vetted rather dramatic rise over the last 20 years, we believe that the components of

that increase have basically completed themselves and we expect the cost to be pretty stable in the future. the extent to which changes are necessary we think should be looked at in that light. so we will stop there. >> thank you, steve. next we'll hear from lisa ekman of health and disability advocates. lisa? >> good morning. thank you, mark. thank you, steve, for that great presentation. i am going to start off by talking a little bit about the importance of the social security disability insurance program to people with disabilities. it is vitally important. to get provide critical income support for many people with disabilities and their families. in fact, it list many people out of poverty. almost half of ssdi beneficiaries rely on these critical income benefits for more than 90% of their total

income. it is the one thing that keeps many people with disabilities from leading lives of abject poverty and homelessness. and the want to share just a couple of very brief stories of some people who receive social security disability insurance benefits, where in both cases it did actually prevent them from being homeless. the first is a man named henry, and he was in his 50s. he had severe cardiac problems, had worked in insurance industry for a very long time, paid into the social studies system and earn his disability benefits until the point at which his heart condition made it no longer healthy for him to work. he applied for benefits, or he stopped working and did not apply for benefits right away, tried to make a go of it without them. went to his 401(k), all of his savings, became homeless and lived in his car for almost a year before he finally took the step to apply for benefits, and he was able to, after being quickly approved, get an

apartment and his ssdi benefits allowed him to continue to have a home after that. another store is a woman named angelise, and she had type i diabetes that she developed as a teenager. and she worked for many years, and eventually she became ill with diabetes related complications. she actually continue to work when she probably should have stopped working to take care of herself, and ended up being hospitalized. while she was in the hospital she applied for social security disability benefits, and was approved for them. in the meantime, she didn't have the kind of savings to rely on that henry did come, and she had to get help actually from a charity to help her keep her apartment. they paid her rent for a couple of months until her benefits did get approved and inches able to use her social security disability insurance benefits to help pay for rent. so the importance of these benefits to people with disabilities and their families cannot be overstated.

but why have the roles grown? and i think steve goss did a great job of laying this out but i just want to go over a little bit of a recap for you. more women qualifying for benefits have led to a big increase. the baby boomers entering their high disability years, the increase in the normal retirement age is something that steve didn't actually mention. but as you all know, the retirement age is going up from 65. it is now 66 for people retiring. for people born after 1960, it will be 67. and the weight disability benefits work is you get them until you reach your normal retirement age to so for every month the retirement age goes up that's another month of benefits come out of this but trust fund instead of the retirement trust fund. and a 2009 approximately 300,000 people received benefits from the disability trust fund that

under previous law would have received benefits from the retirement trust fund. so that is also contribute to the increase in cost and the growth i in the number of people receiving disability benefits. as steve said, we really hit the top of the increase. it's going to level off and then we will go down. but there are other factors that could contribute as well. and as steve also mentioned, the economy is one of them. we expect applications and beneficiaries to increase during times of economic downturns. steve showed you that chart, and you contract when the our recessions. we do see an increase in the number of applications and people get approved. employers are less likely to hire and more likely to fire people during times of a weak economy. when there are a surplus of workers for every job, there's a huge focus also on productivity. and when they are perceived

concerns over productivity, although all the research and data show the people of disability are no less productive than the nondisabled peers, there still remains a perception among employers, and fear among employers, and so when times are tough it's even less likely that people with disability will get hired. if they have to let someone go, some of those perceptions around the productivity of people with disabilities can lead them to be the first let go. it's harder to find a job if you're laid off if you're a person with a disability, and that's especially true if you're an older worker with disability because now you have two potential things that an employer might consider when they're looking at a huge pool of applicants about who to place in the job, that they might look at and you negatively, even though they shouldn't, and there aren't any real concerns. the perceptions are on us to make employers think different choices. there are a couple of the reasons i just want to highlight why the rolls have grown over the past couple decades.

in the past decade, past couple decades we've seen a decline in the number of people with health insurance coverage, a decline in employers offering health insurance coverage to workers but if you're a person with a disability having health insurance coverage is not an option. it is a life or death situation. you need to build a future treatments. you need to be able to afford your prescription medication. if you can't get health insurance through a job, what people get health insurance through applying for ssdi. they also get access to medicare. so that's an easy choice but if my choice is death or applying for ssdi benefits, i'm going to apply to get ssdi benefits. there's also a less forgiving workplace. the emphasis on global competition and being competitive, and begin the productivity concern, perceived productivity concerns that i discussed just a few moments ago make the workplace less forgiving and people, it is harder for people who are

receiving ssdi benefits to compete in the less forgiving workplace. most of what i said is based on misperception, but whether the perception is true or not the perception in judo get hired, it means you don't get a job. the americans with disabilities act has any really fantastic job in helping people with disabilities get the reasonable accommodations they need and be able to sue when they are fired for disability discrimination. it is also available for discrimination in hiring, but, unfortunately, it is extremely hard to prove in terms of discrimination and hiring, especially if you have a thousand applications for a particular job. it's really hard to prove that. so there is still discrimination in hiring and it has not been a limited by the americans with disabilities act. and to a much lesser extent but still to some extent there are other programs that require people to apply for social security disability benefits. there are a handful of workers

comp programs that require you to apply for ssdi, and then the offset your worker's compensation benefit amount based on the receipt of disability benefits. and the same is true for private is the insurance, that many policies will require someone receiving private disability insurance benefits to also apply for ssdi, and many of them do have the same kind of offset. so what does this increase mean for the future? as steve pointed out, it is leveling off. it's not expected to continue into the future. and it does not mean that the program is not affordable or not sustainable. sustainability and affordability are both a matter of priorities. in poll after poll, americans say that they would rather see their taxes for social security go up and you see any benefit cuts, and they support doing that. as steve also mentioned, that we

can solve this by reallocating some of the current taxes in the retirement, they go into the retirement trust fund into the disability fund, as we have done in the past. the political situation today is a little different than in 1994, but that's a matter of political will. it is not a matter of it being hard to do. i want to just go over a few beneficiary characteristics, and that is that people who receive benefits are very diverse. you can see the list of different types of disabilities that people have. and so, some are terminal, as steve discussed, and some have very debilitating disabilities. so when we think about reforming social security disability, we have to think and we have to keep in mind this is not a homogeneous group. it under in every individual is different and the situation is different the condition is

different. a likely track of their condition will take, even if they have the same condition, is different. it's an individual situation, and we have to keep that in mind. as i mentioned from beneficiaries are terminally ill. about one in five male and one in seven enough beneficiaries die within five years. they tend to be older. in 2010 the average age was 53. seven in 10 beneficiaries are over the age of 50, nearly three in 10 are over the age of 60. many have low educational attainment. two-thirds of a high school diploma or less, and almost a third did not complete high school. so when we think about trying to find work for folks in this changing technology base, skill-based economy, we have to keep in mind what the characteristics of the people receiving benefits are. so can a significant percentage work and become self-supporting?

ssdi beneficiaries should be getting every support and encouragement to get to work. but as i just got a lot of the reasons why, it is unlikely that a large percentage have the capacity for ongoing work at a significant level. and ssdi does not present a disincentive to work, the benefits are modest but it's an average of $1110 per month. in february of 2012, that is more than 10% less than a person working full-time at minimum wage. so it is a modest benefit. does it need reform? ssdi is functioning as it should. it's providing final way to replacing the names of people with disabilities and their families who need. more must be done to people with disabilities stay at work if they have acquired disability and more should be done to provide support and services to ssdi beneficiaries with were

capacity to attain and maintain employment. but that is not the role of an income support program. it's not the role of ssdi, nor should it be, but we should do everything that we can to of people with disabilities were. the employment situation for them is not good and we should do more, but that is not the role of an income support program that people pay into and earned a benefit through. i want to end with some principle for reform that as we think about reform we really ought to think about these as we evaluate from the perspective of people with disabilities as we fight with the reform proposal. it should preserve the structure of ssdi program, including the definition of disability. it is appropriate. it is a wage replacement program for people who don't have worked capacity. so the definition and the structure of the programs are appropriate for that function. average to increase employment

should not be achieved through tightening eligibility criteria, narrowing health care benefits, removing the entitlement to benefits or devolving responsibility to the states. ssdi benefit received should not be time-limited. we can't predict the course of a person's disability, and so that is what governs whether not a person can work, it's whether health condition is. there's no time and on that and we can't predict it so we shouldn't try to put limits on benefits. in work activities and work preparation activities should be voluntary for ssdi beneficiaries. a person, their families and health care providers are in the best position to decide whether or not a work attempt is a healthy thing to do for a person with a disability, not any other arbitrary work limit, or work requirement that we would set forth in. and we should give adequate resource to perform all the program integrity functions

before we begin reform. we should allow them to have enough resources to complete disability determinations in a timely manner, do continue used to ensure that people have continued a disability so that people are receiving benefits are entitled to them, and we should provide them with adequate staff and resources to prevent overpayments to people who do try to work. because that is a huge disincentive to people. i have a couple more slides talking about the specific reforms, but i encourage you to take a look at them. i have run out of time, but just want to close by reiterating how important the ssdi program is to people with disabilities, as we think about any type of reforms, we have to remember that these benefits represent the difference between being poor and homeless, and being able to live independently in the community, for millions of people with disabilities and their families. thank you.

>> thanks much, lisa. [applause] >> next will turn to dave stapleton of mathematica policy research. >> thank you, and thanks to nasi for setting this up. i'm glad to see a great crowd here. so so far we've heard from steve about the financing and the history of the ssdi program, which i think is the issue that is really bringing us here, and things look a little better in the future than they have in the past. and i agree with that. we've also heard from lisa that ssdi program is extremely important for people who are beneficiaries. and i would agree with that as well, but i have fundamental disagreements with lisa on the issue of the structure of the program. and it's not just the ssdi program although, it needs to be seen in the context of the larger disability policy your so

i'm not going to focus on ssdi, i will talk about it but i'm going to talk about why i think the social security, i'm sorry, the disability policy in general is appealing. and i will rush over fairly quickly, a number of ideas for reform, not enough time to look at all of them. but then i will also close by saying we are really not ready for reform and we need to do things in a measured way to move the ball forward so that we can be ready for reform. a lot of my remarks are based on a paper i wrote with david mann, who is sitting here the third row, and there was also a brief which you may pick up on the way in, it's on the table there. the research was sponsored by the national disability research so i have to give them credit but you're not allowed to give

them blame. so current policies i think exhibit number one is this chart which has been around and keeps getting updated for many years. it looks at the relative unemployment rate for people with disabilities, working age population with disabilities, relative to those without disabilities, their peers. and it goes back to 1981, the first year we had data. and what you can see is there's been a steady decline in the unemployment rate of star in the late 1990s where it peaked in 1988 at about 38%. and now it's down to about 22% in 2010. and along with that of relative decline has been the decline relative to household incomes of people with disabilities. and here the situation is a little better, and income support plays a very big part in why it's better. but there's been a decline from the peak of about 64% to about

52% today. so the other really important set of information about how current policies are failing people with disabilities concerned poverty rates with people with disability so my colleague did a recent study looking at people who are in long-term poverty. such people whose household incomes are below federal poverty line for at least three years in a row out of four. and they found that 65% of those people who are in long-term poverty have a significant disability of some sort. we have also done work, and again, they have been doing this using social security survey that we did for social security of the beneficiary population, and we found in the survey, and this was from 2005 that 50% of

all ssdi and ssi recipients combined, working age at the end, lived in households whose incomes were below the poverty line. now, if we just looked at ssi at 70%, ssdi only, those just on ssdi, it's more like 30%. but that's very high poverty rate related to the overall population. there's been a body of research, not in this light, about the hardships that people with disabilities who live in impoverished households experienced. and experience hardships, not being able to get the medicine they need and that sort of thing, much more quickly than people without disabilities in poverty even with the same level of income. so i think, going back, i think this is enough of a reason to consider disability policy broadly, and whether or not it needs restructuring. but the thing that is really driving interest is in these

factors, which i think they should be, they have been around for a long time. we have known about them for long time, but it's the fiscal situation. it's the perception that current policies are failing taxpayers. so now we'll look at the ssdi program quickly, and these numbers are going to be consistent with what steve told you earlier. this chart just shows you the number of beneficiaries on the role, working age population on ssdi, starting with 1970 and going through 2010. i want to focus attention for men on 1980 and the period after 1980. ..

and some people would say more than reversed. it is difficult to determine but growth in a role is pretty moderate after that but we have a strong economy until 1990 and starting in 1990 there is this acceleration of growth. of course steve explain the lot of that has to do with the number of people who are disability in short especially among women and also has to do with the aging of the baby boomer population.

and more prone to that unfortunately. i need some calculations to show you the effect of those factors. we anchored this red line in 1980 and what that shows you, what this would have grown, if the prevalence rates, disability in short qualified for the program. within the eight categories say the same as they were in 1980. what they see is there would have been overall growth and would have been substantial since 1980. not nearly as large as we have seen since the 1990s. the difference between values in 2010, 28% or two million beneficiaries. if we rollback the prevalence rates for 1980 we have

2.2 million fewer people on the role and $50 billion in benefits, the medicare benefits. that is a big number. the medicare benefits receive the beneficiaries. less than half the federal government spends the disabilities. and the paper we did, last year, where we try to do accounting of all the money the federal government spends to support the working age population of disabilities. i won't -- do i have time to look to the details? bottom line for fiscal year 2008 which was the last year we had a tough for was $357 billion there

was growth -- inflation-adjusted 36%, the exercise for fiscal year 2002. the total amount of all federal outlays in that year, a little over 5%, medicaid, and veterans' benefits, large and growing number but what of other programs that contribute to these totals. the fiscal issue and the overall issue of the federal budget is going to draw attention to these programs. enlarged share when you put them together with all federal outlays going to be very difficult to make these programs the way they are and that will drive more than the issues they raised first. the policy debate about that

policy. in the past we tried a lot of incremental things to improve disability policy for people with disabilities. the evidence shows -- there was the ada and disabilities act of 1990. the work force investment act and important reforms, disabilities education act and 1999, were concerned improvement act with a number of different provisions specifically -- to increase employment and if you look at the numbers they just haven't paid off in the way we hoped that they would. and some expected it would. why is that the case? there are a lot of specific reasons but there are a couple fundamental problems. one is we are laboring on top of this budget. everybody would agree current programs are enormously complex and we work at the evaluation

and the concept is very simple. it is a complicated program that became difficult for social security administration to administer. the other thing is we still are stuck with what we call the work waiter approached. in order to get most benefits scored by the federal government you have to get on the irs first. that drives everybody towards those as the programs of first support when they run into trouble such as in the recent recession. there have been many proposals for reform is. number of them concerned early intervention for workers. this slide the social security advisory board in 1996 about pursuing these ideas. more specific proposals, the work insurance program called being american with brian mcdonald and people on west

coast, a public program. a new social insurance program to assure people can stay at work. very recently david and mark provided disability insurance by employers and by individuals but would be required and the idea is to give employers and individuals more stake in staying in the labour force. mary daly and rich burkehouser had experience with the disability share of the social security trust -- payroll taxes which most other social insurances, not medicare but certainly unemployment insurance and workers' compensation. we talked more about more fundamental reforms. lot of people would say early intervention approaches are interesting and probably should be looked at more but won't be

enough to reverse the trends that we see historically for the well-being of disabilities. david man and i have looked at these, more comprehensively. one idea is to replace the inability to work criteria for social security benefits with their work capacity approach to determine eligibility and only when you help this person be more self-sufficient that you give long-term benefits. the idea of changing the compensation principle from wage replacement to extra cost of disability is one that has some places about ready. we have never done that in the united states but interesting idea. there is a lot of interest from the general accountability office and we picked up on this, integrating or consolidating programs and one of the fundamental problems is the fact that the programs were so

fragmented. and more responsibility to states or localities. a lot of people are very worried about that. they don't trust state governments to do the right thing and they think the federal -- something that has been proposed by rich burkehouser and mary daly. we wanted to consider other options. it just seems incredibly important since local people are going to be delivering service to people with disabilities. give them flexibility and responsibility to lead minister benefits but also have strong oversight capacity. one thing we can all agree on is all the structural changes proposed are not ready to go. weekend rolled about the way they are now. it would be irresponsible to do that. they could end up costing more than the current program but

more problematic we, make harm people with disabilities because we don't know about what we're doing. what we think we need is a long-term program. it is ten years. to start pursuing these ideas and try to build the evidence, build a political consensus and develop policy reforms. that requires an enormous amount of demonstration and research work. it has to be collaborative. a lot of agencies have to be involved in state and local agencies and private organizations as well. in order to do that you need the desolation that will promote that. just to close it seems to me we have two viable options. we could continue with current programs the way they are but given the fiscal situation. trimming the ability and benefits in decades moving forward, small efficiency gains out of the individual programs.

the bottom line is further deterioration in the economic security of people with disabilities. the alternative is to launch long-term structural reform process where we do the groundwork and build the evidence based to move forward and maybe that would buy as more time to preserve the existing programs. thank you very much. [applause] >> thanks. next we will hear two brief responses to the presentations and following that moving into q&a. we structured more in depth. plenty of time for questions and our conversation with our panel. think about your questions. and the office of the united states. >> i am pleased to be here today. i did find steve goss's

information helpful in terms of what is happening in the program and want to say i agree with lisa ekman's printable on reform. they were very useful and on target. i do want to comment on david stapleton's proposal. i am sure you are not surprised. and go into a little of what was not covered in slides but in more detail in his written proposal. david has proposed that there be a program that includes disability allowance, as i read it would be a bit less than what is currently income benefits under current law. since the benefits under current whar are already so low, what in the world are beneficiaries to live on? how will they cover basic income needs of food and shelter?

the program also calls for reducing benefits and spending them in another way. not necessarily for food and shelter and serving more people in the same program. the proposal does not guarantee health insurance except for people in one category out of three categories. very unclear where the money would come from for other folks to purchase their own insurance on the open market and when you talk about people who are very financially vulnerable and questions of affordability, that is a big issue. there are a group of people deemed to be -- to have low work capacity and from my perspective this would be limiting and labeling people in a way that is

not productive. many people do try to work and the program shows us with limited work history, and what many people might think of as low work capacity people do attempt to work and are successful at it and in supplementing their benefits and i would not want to see something that would discourage that or in some ways prevent people from trying to improve the situation that they are in. and frankly i don't see the advantages of creating three new categories. what i do see in terms of evaluating people and putting them in three categories is a whole new administrative process. it would cost new money. i could see all the appeals associated with that. if you don't like the category were put into and the administrative costs that go with that. what end i am not sure. those are my reactions to the deeper end of that proposal but

i want to take this opportunity to make a few comments of my own. is important to remember the basic purpose of ssi and s s b i is income support for people experiencing significant limitations in their ability to work due to disability. the intention is to replace income to provide food and shelter. it may be temporary or permanent. the programs, particularly work incentive, have evolve over time as congress has attempted to address its own a understanding of disability and the nature of work and support. people who depend on these programs are in a financially vulnerable situation. they need cash support. they need health care. they cannot necessarily handle major swings in policy decisions or cash flow or health care eligibility. on the other hand attempts to

improve the program congress has been faced with issues of cost estimates. this is a huge program. everytime there's the new and a great idea and we propose lots of great idea that changes have been incremental because the costs of addressing any of the pieces of the program are so huge. unintended consequences are that things just cannot be done in a big way and often we end up with a layered complexity and i do agree with you that there are layers of complexity in the program. we did attempt when section 1619 was made permanent and we did attempt to have that added to the title 2 program and we are not able to do it then. in the days of working on

senator jeffers's bill, in his version of the ticket to work bill there were provisions to do that that ended of being a demonstration program and also medicare eligibility permanent medicare eligibility was part of that. it is time to look at that again. in the president's budget for this year there is a request to let the proposal for work incentive simplification pilot and that would include those elements of continued attachment to medicare and simplification of the on and off and removal of penalties and ultimately join up again with that 2 for 1 offset being tested. these things have worked in the ssi program and we need to see work in the title 2 program. we know that they work. they are incrementally and

people with disabilities have been asking for them for decades and it is time to see these put into operation. thank you. [applause] >> thank you. now we will hear from tony young, senior policy strategist at nish which is a community-based organization doing advocacy on behalf of disabled individuals. tony? [inaudible] >> thank you for the opportunity to speak to you this morning. [inaudible]

we used to send numbers don't always lie. we have all of these stories. but those numbers -- [inaudible] -- for some people like the executive director and others. for other people, just getting by managing complex medical conditions. keeping families together. keeping your house -- a roof over your head. daily activities of that sort.

even the g a o has found people with disabilities face multiple barriers to employment including lack of education, lack of skill, lack of training, barriers at the workplace. no reasonable accommodations. and of course discrimination which you have heard about before. i want to give two quick examples of how this works. you have a person with 3 girl palsy and speech impairment and uses a wheelchair and a speech board. and an advanced degree in economics. if that person were to lose the

wheelchair or the speech board, the opportunity to get that advanced degree, they won't be able to work. the second person, quadriplegic uses a power wheelchair which probably costs $25,000, using something that will cost 22,000 base and another 15,000 for accommodations, uses personal surfaces up workplace and home for an additional $20,000 annually into the cost and you can see if any of those tools or supports are withdrawn the person is not going to be able to work. is going to be in fact all over

the disability rules until it could be rectified. dave stapleton proposed major structural reforms including early intervention, comprehensive incentive reform. program consolidation and more state control. i am going to concede the point that the system must improve to facilitate work. i want to put out two basic principles of my own. they are pretty widely shared by the disability community. the first principle being reform begins with do no harm. we don't want anyone to be more disadvantaged after reforms than they were before reforms

started. secondly, the disability community point of view is not too easy, too hard to exit. as marty said the disability community itself has been very active in the last 40 years in trying to make changes to help people go to work to get the support they need, to get the education. the question is which problem will we tried to solve right now? we have seen conflicting confusions can be drawn from the data. i was able to tell if the roles were growing or going to be stable in the future. that is an important question.

should incremental ideas that were previously not adopted be tried again? should it be expected systemic change succeed now where it didn't succeed before? is it possible to oppose new taxes on employers and employees in order to fund the ideas that are being floated. and especially incentives reform, that is the way to go. incremental debt is the way to go. simply because we cannot do -- convince the congress that massive changes are happening at

this time. if the economy turns around. with the incremental changes to the work incentives the problem is not going to be resolved. thank you very much. [applause] >> thank you, tony. we are going to open before for q&a. since the question is live on c-span and being recorded it is important to find your way to one of the microphone around a room to capture questions and also introduce yourself before asking a question and do as i say, not as i did what i forgot to turn the microphone on. i will pick on with a question. to anybody who might want to discuss this.

you touched on that. and a dramatic increase, with health insurance for too young for medicare. the commonwealth bond reports there are nine million people aged fifty to 64. that is a figure that is up from $5.3 million as recently as 2002. is it possible to find the link? what is the cause and cause and effect relationship of that rise in general lack of coverage in health insurance and the rise in disability insurance applications. can one quantify that or not? as a second follow-up peace, with the affordable care act up in the air, one of the most important things is to get many

people covered again. with the panels are, start from a numbers perspective. what does this relationship look like for older americans? >> a very complicated one. we do -- if someone has health coverage, about 24 month continuation but they have to pay the whole bill. that is difficult for people to do. one of the issues with disability insurance is if you lose your job you have impairment and apply for benefits and get the benefits. not only have a five month waiting period before monthly social security benefits start and an additional 24 months before medicare benefits come in. clearly these contribute for lack of insured status. and other possibilities to help

improve prospects for the cost of social security disability but more importantly it have impairment. and more attractive ways to help people have greater opportunity. and additional assistance to people before seeing benefits in terms of having access to health care to maintain them and -- >> prescription drugs. >> the affordable care act will have a big effect. on the one hand, will provide people with adequate care more generally than we have now and that may result in fewer people filing disability benefits. on the other hand, it would

remove the disincentives we have, waiting 24 months to get medicare and people have greater access. which where that plays out is not clear. >> i don't know whether you can track it but anecdotally we know that people do delay getting health care because they don't have funds the go to the doctor or get help coverage when they need it. when their health conditions exacerbate to the point where they are more costly when they finally show up at the emergency room or hospital. even when the affordable care act goes into affect people will need to have the ability to pay for health coverage. going to have to pay for their plans if they're not on

medicaid. it is still an issue to have the funding to pay for. the whole issue of the two year waiting period is a big issue and hopefully will be addressed so people will not even need to consider medicare. that would be a tremendous step ahead but there are still issues out there. health care won't be totally eliminated as an issue for people to consider. >> you would have roughly half of this age group covered under medicaid -- ended the expansion of medicaid and the rest of it shopping in the exchanges. let's turn to the floor. do we have anybody with a microphone?

>> i could just, one of the things is the importance of health care can't be understated. the legislation was passed, congress created an option to enact a medicaid by in program which would allow working people with disabilities to purchase medicaid so that they could get affordable health care that provides all the service and support they need to continue working and most states have taken up that option but they allow different levels of earnings and some have strict resource tests. as a country, to address the health care situation for working people with disabilities we should support a national medicaid by in without a resource limits similar to the qualifications for the medicaid expansion that would allow

people with disabilities to work, save, be independent and never risk losing their attachment to the vital health-care and support that allows them to live in the community. >> so they occur at the state-by-state level? >> some have generous income limits and resource limits and some have strict in command resource limits but regardless how much you earn or save a person with a disability cannot self finance the service and support they need to live in the community. the best way to ensure that happens is to create a program that allows people to buy medicaid regardless of what their income or resources is to allow them to have uninterrupted access to the service and support they need. >> let's go to the floor for questions and start right back here. please introduce yourself?

>> i am from the institute -- i have a question to a panelists. why has the number of people increased and what can we do about it? and the first question -- a lot about that. and reform. what was missing in the debate was the notion that we need reforms. i was encouraged whether it was right or not, is it good or bad? one statute is good because it is important people see smooth the public rates are high for people to provide very important -- the counter point is this is bad. of program which is expanding and need to shrink it.

and the measure you hear is it is not related. we have to think about the fourth independent of the size of the program. thank you. >> this gets back to the beginning. it seems to me the real reasons to consider reform are not the fiscal issue and number of people on a roll. it is their economic status. decline in employment. it is harder for people with disabilities to be self-sufficient as time goes on and that is what the statistics show and many live in poverty. that is a fundamental reason to consider reforms. >> i think i said during my presentation i completely agree the employment situation for people with disabilities is not good. we need to do a lot more as a

country to assist people with disabilities to go to work. when they are able and up to their capacity for the individual. if you go back to the backslides in presentation, and you have-2.6% in the time period that dave out wind is on improvement, training and education. if we're serious we shouldn't start with the income support program and looking at what we need to reform. we need to look at how to improve special education and outcomes of people, and how can we improve employment support programs. my answer to the second question is there is a lot that should be done but doesn't have anything to do with the social security

disability insurance program that provides income support. that is what it does and that is what it should do or we should do a lot more to help people get jobs, keep jobs and not have to apply benefits in the first place. >> one of the problems -- one of the problems is even if a person gets a job there are all these extraordinary expenses that particularly people with these disabilities have to cover. it is not just rent or mortgage, food and transportation. it is personal assistance at home and at work. it is the cost of a wheelchair or a communication device. things are very valuable tools but also way out side the

whirlpool of many people with disabilities to purchase. there are some thoughts about turning the disability -- cash flow into a supplemental income stream in order to pay for these things. that would take a radical departure from where we are today. but somehow or other through additional support we are going to find a way to help people with disabilities to pay for these devices and services and support. >> of further perspective when we talk about reforming a program there are two ways to do that. a future in which the cost is more than the scheduled taxes coming in. one way is to pull down those

costs. another is to come up with more revenue to pay for the costs. everybody knows the definition of disability insurance program is a strict definition applied pretty strictly. there are changes over time, but it continues to be strict definition. the retirement age where people transfer over we only have 10% to 15% of our population receiving those benefits. going forward, that has to be something we consider. are we going to pay for what we have or find ways to pull back on the cost of that? one little rejoinder, the numbers they've put up are exactly -- the one chart where he showed the number of disabled worker beneficiaries says 28% higher than the prevalence rates. it stayed exactly the same over

the last 20 years or so. the difference is simply because women had increased incidence rates, moved to parity. both men and women had a shift towards younger ages. one thing a lot of us would hope, our deputies who work on this stuff all the time with dave and others, understanding why there has been a shift relative to older ages would be a real step in the right direction. why we in had the increase in costs. >> if you look a general job market and the flak we still have in terms of joblessness and the market. the challenge on the discriminations side, a tall hill to climb and very rampant

discrimination based on disability and workplace discrimination. you step back and look at the marketplace that this is a big challenge. let's take a question right here. >> from the medicine association, the follow-up question on your discussion about health-care reform and significance for the program, framed by saying for example 40% of people who have hiv and are receiving care are paid for through medicaid programs that most people only receive that benefit after becoming disabled. i am wondering to what extent people who have a preventable irretrievable disease who lacked health care driving disability costs whether or not that is a factor or health care reform is something that will address that. i am wondering how big a piece

of the pie it is. is at large or small? >> it is hard to put a number on it. it is pretty important. the example you are alluding to is one example of -- i think we get things backwards. we don't figure out what people need so they continue to work first and get the benefits a couple years later and get them into medicare. i'd get a paper on the beneficiaries into medicare and how many have insurance in that period of time and these are data from the 1990s and there are 15% didn't have coverage at all. some of them died before they became eligible for medicare. what you are saying is just an example of how we have things backwards. we don't figure out what people need so they can continue to

work and be productive but up and get into these programs and then start giving them services like health-insurance. >> i want to respond to that little bit. i don't disagree that we ought to provide different -- provide better services ahead of time but i will reiterate that that doesn't mean we have to change s s b i. we have to change other programs that make someone applied before they can get access to health care or employment support as opposed to changing the vital income support program that people rely on to get them with a roof over their head. >> another question. >> i am kathy horwood. and surprise but the data you have on current policies failing

taxpayers. defining that as he essentially too many people, i don't think that is failing taxpayers. it is a good thing for the taxpayer. i'm glad people are getting it because without it, a lot would be happening to them. i assume you are seeing not too many people getting access as the eye but there should be other things for them and the workplace. i hope that is what you mean. i hope you don't mean we should take 2.2 million people and just throw them on the streets. in terms of workplace. how you think we get employers to provide not just jobs for people with disabilities but good jobs for people with disabilities that provide good benefits and the support that

they need particularly in this time, in this political time when nobody seems to want to be required to do anything in the employment sector. do we require they provide adequate health coverage. we require they provide support? how do we do this? >> i didn't mean we should throw whatever it was for, two million people off for roles. i agree largely with lisa. the issue is and reforming the s s b i program. it provides central benefits of that and there are changes we could make in the context of larger reforms and one thing that has happened this because s s b i is a program available to workers when they have a problem, we made s to make it easier for them attractive for them to work.

they're on the s s b i and wouldn't have had to do all that if we had something so not so many people were getting out of the program in the first place. and as far as getting employers to be more interested in support of hiring people. that is tough to do. the health insurance, to marty's comments that the paper that david and i wrote to assume that they would be implemented and that would be the basic form of health insurance for everybody. consulted with supreme court first. it is incredibly important. forcing employers to provide health insurance is not the best way to do it because it imposes

costs on employers and if they have to foot the cost, and why would they want to keep employing that person? it is difficult to find options that would encourage employers to hire people with disabilities but they have to be -- we have to look at those more carefully whether they are tax incentives or other if things. people have suggested reducing the payroll tax if you hire somebody who has a disability at the level they otherwise would qualify for. that is an example. >> in broader context the one possibility we talked about in the context, and trying to encourage people to work longer providing tax incentives for higher agents, they have an edge

over younger workers to get a job. is not the best of worlds perhaps but i suggest the best of worlds is something that is in broader context. the rising tide and what we need is more economic opportunity, jobs in general. we have a% unemployment rate. that is a cyclical phenomenon but looking forward it is a serious question in competitiveness, job opportunities in this country and folks with medically determinable impairment, what would be the site disadvantage. if we have more opportunity and jobs available in general that will be to the benefit of all of us. more money coming in. it is sort of the route to solving problems. and a medical appearance

enhancing job opportunities. >> not to sound like a broken record, have a national medicaid by in. if employers new health care costs would not affect them, that could remove the misperception and fear. another thing we can do is encourage the federal government to comply with the executive order in the federal government. the biggest way we can encourage employers to hire people is to show them what good workers, and high productivity has not disabled peers and the best way to do that is to lead by example and if the federal government were to become a model employer it would do a lot to help educate employers about the truth of workers with disabilities and if we could also have their health care

taken care of it would remove a lot of the fear and anxiety around hiring people with disabilities. >> let's go to another question. >> i am winthrop cashdollars. i appreciate and enjoy the robust and interesting discussion this morning. the question for mr. goss about the rise in disability population in recent years and outlook for the future. the question is you mentioned the great recession, changing participation, are you able to offer an opinion whether you think some of the rise is a success story? a success story in dealing with certain disabling condition this, and we progressed to strikingly higher and further to

the point where work capacity can be preserved and maintain. >> that is an extremely important question. in one sense what you are saying is exactly right. we had a success story in areas of maintaining people with sufficient help to survive. to live a good life even if not to recover to the point of going back to work. that contributed towards people on disability rolls and staying on disability rolls, surviving longer and that increases the percentage of the population receiving disability benefits and there's no question it is a success story. we would agree that people who reach 62 or 65. that will certainly increase the cost of retirement but we hope that is a success story as people live longer after they

reach age 65. >> good morning. i with the u.s. department of labor. i have a question that gets to the main question of what are more people claiming and the wonder about the substitution effects that might happen. people talk about the rise in the retirement age as being one reason health insurance going away for another reason. wonder if anyone has investigated the evolution of social insurance programs like workers' compensation. and causing increases in costs. >> one is welfare reform that

was passed in 1996. the effect of welfare reform on low income parents obtaining disability benefits. and fairly young people, to qualify for s s d r. and steve -- and for younger people, could be explained by welfare reform. it may be a small amount. workers' compensation is an interesting. interesting controversy. there are couple papers published. one finds the tightening of work compensation, state laws and training eligibility.

and no relationship, and difficult to tell which is correct, and disability -- uconn the same that there's a ripple effect in other social insurance system is. if there was a tightening of eligibility in austria in the early 2,000s for older workers. and they increase the age -- and they also found more unemployment insurance and other benefits, an important issue. >> we have one of those that operates -- we have gone up one and another.

the benefits that are available to 62. it used to be 80% of the benefits you get -- if you receive disability benefits you get the full benefits. shifting the retirement benefits from 80 to 70% probably provides an incentive to be more combined to apply for the disability benefit which may qualify for that and take into account with projections in the future. >> is not going to be a complete transfer of people from one program to another. it is a very high standard to meet. you have to be unable to perform substantial activity due to a physical or mental impairment

that last one year. not everyone on the other programs is going to meet a high standard to qualify for social security. it is not a 1:1 transfer from other programs in social security or s s i. >> i don't see any more people with microphones but i have one more question for steve. if anybody else have a question please have the microphone and think about wrapping up. the question about this discussion in the broader context of social security reform and specifically retirement programs, periodically when we hear proposals for further changes, and another increase in retirement age. what would the impact of that be? how did the two interact? and you have meaningful gains by reform like that in so far as

what might do with disability? >> really good question. usually when we are rightly or wrongly reforming or changing -- having legislative changes, the two trust funds are separate entities. we raise the normal retirement age. and the fund up to 65 we are paying up to 66. that extra year of benefits paid out of disability insurance trust fund is one year less than the survivors insurance fund so it is a trade-off. it doesn't make a huge difference. what makes a bit of a difference here is the substitution idea we were talking about before we do raise the normal retirement age. when you raise the lower time age, you have people deciding to take the retirement benefit exactly the same age they otherwise would or the benefit

by 6.5% or they can delay starting their benefit by one year and get the same monthly amount by wes which is the overall benefit by 6.5%. raising the retirement age clearly does save money overall but there's an off session on the disability side by virtue of the fact that ages 62 to the normal retirement age the disability benefit is more transit financial. that offsets the savings for retirement age but that is a clearly significant thing. >> the administrative procedure as opposed to the almost automatic way that you apply for retirement? >> there is certainly that. no question. administrative costs for disability benefits are significantly higher just because of the work that has to be done in making a

determination. >> one of the -- there's also a discussion not just about increasing the retirement age but also the earliest eligibility age which is currently 62 and there has been a lot of concern about that because of people with disabilities and not so much that they end up on s sdi and they suggest we need to make it easier for those over 62 if that were to happen. but because there are many people who experience medical problems in nearly 60s. they're using early-retirement benefits because they are having a hard time continuing to work. some of those people would get into ss bi but some would not. one of the important issues for people with disabilities if

there is a retirement policy reform like that, what do you do about those individuals? there are various ideas. we suggested and increase in the earned income tax. a health benefit and various things you could do to address the issues of that population to deal with in the context of the retirement policy reform. >> the national academy of social insurance. question for everybody. the s sdi population. has there been a marked change in a ratio of mental health related disabilities or physical disability. in terms of relationship to economic conditions and what we sow was saying about the absence of programs to help people on s sp