The New York Times wrote another excellent piece about the problems plaguing the Social Security Disability System: Private Insurance Companies will often harass their clients they don’t want to pay to apply for Social Security disability benefits. These private disability providers don’t want to disburse benefits to those entitled so they merely refer these poor folks onto the overburdened Social Security Disability Program–even when its clear that they don’t qualify under Social Security’s more rigid definition of disability. The company’s policies go as far as to deny people entitled to private benefits if they don’t apply for Social Security disability benefits. Currently, whistleblowers have sued various long term disability providers for such tactics, and one of the whistleblowers includes a former Cigna employee who grew tired of referring over claimants to Social Security Disability just because her former employer didn’t want to pay out benefits.
Basically these policies constitute unlawful government subsidies to the private insurance companies since they can eliminate private benefits paid to people that are successful on their Social Security disability claims. The problem is that private insurers are required to pay benefits to those that are not permanently disabled whereas the Social Security program is designed for people that are. The whistleblower case contends that because private insurers send tens of thousands of questionable cases to Social Security it overburdens the Social Security system by hundreds of millions of dollars over the past decade.