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Social Security disability applications fall, but payments rise: Survey

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While the number of long-term disability claimants fell slightly in 2012, total claim payments among member disability insurers grew for a fifth straight year to $9.4 billion, the Council for Disability Awareness said Tuesday.

According to the study “2013 Long-Term Disability Claims Review,” approximately 662,000 people received long-term disability insurance payments last year from surveyed insurers, a 2% decrease from 2011.

This reversed a trend in which long-term disability claims increased from 2008 through 2011, according to the report.

The report included responses from 19 member insurers, including Aetna Inc., AIG Benefit Solutions, a unit of American International Group Inc., Hartford Financial Services Group Inc., Prudential Financial Inc., and UnitedHealthcare, among others.

The number of insured lives increased 1% to 32.3 million last year compared with 2011, the first increase in several years, according to the study.

“The decline in claims and growth in covered workers are both likely related to the gradually improving economy and declining unemployment rates,” council President Barry Lindquist said in a statement. “While the environment seems ripe for an upswing, recovering claimants looking to return to work continue to be hampered by limited availability of appropriate employment opportunities.”

Approximately 154,000 disabled individuals were approved for long-term disability insurance benefits that resulted in newly approved claim payments of $1.4 billion last year, a decrease of 2.9% compared with 2011.

While applications for Social Security Disability Insurance declined 2% in 2012, a record 8.8 million workers — more than 5% of the U.S. workforce — received such benefits in 2012 as awards exceed terminations by 35% during that time, according to the study.

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“Given the current trends, analysts predict that the SSDI trust fund will be depleted in 2016,” Mr. Lindquist said in the statement. “However, the silver lining is that applications and new SSDI claim approvals declined during 2012 for the second year in a row.”

Arthritis, spine disorders and back pain continue to be the leading cause of disability claims, representing 30.7% of all 2012 claims, according to the study.