What Happens at Hospitals If the Social Security Disability Insurance Trust Fund is Depleted?

Hospital administrators are given the complex task of ensuring that medical facilities run smoothly. A vital part of running a hospital is budgeting and securing the necessary revenue to provide quality patient care. In 2016 this could become exponentially more difficult for hospitals that admit patients who rely on Social Security Disability Insurance (SSDI).

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Next year, 11 million people may be cut off from Social Security Disability funds that help cover their medical costs. That was the key takeaway from the Social Security’s 2015 Trustees Report. The report strongly urged lawmakers to take action to avoid looming disruptions and reductions in SSD benefit payments.

Once the Trust Fund reserve has been depleted the SSD administration will only be able to provide $0.81 for every dollar of promised benefits. Currently, SSD Insurance recipients receive $1,150 a month on average. The program also provides additional coverage for medical expenses through Medicare if a patient is awarded Social Security Disability Insurance benefits. The Medicare Health Insurance (HI) Trust Fund is also expected to run out in the year 2030. At that time the government will only be able to cover 86% of HI costs. This disparity in medical reimbursement would leave disabled patients with a larger portion to pay on their own.

Trustees have cited numerous issues that are causing strain on the disability programs. Nominated public trustee Charles Blahous specifically noted that one cause for concern is that more Baby Boomers are becoming disabled before reaching retirement age. What’s even more troubling is the fact that Congress has been taking money out of the Social Security retirement fund to keep the disability trust fund afloat.

Hospitals administrators know better than anyone that in recent years SSD benefit payments have been notoriously hard to secure. Patients are often denied assistance, and when they are approved it can be a very slow process. On average the wait period for Medicare eligibility is two years from the time a claim is filed. This creates hardship on hospital administrators that are already doing everything in their power to minimize accounts receivable (AR) days.

Needless to say, a depletion of the SSD Insurance Trust Fund will create a firestorm for hospital administrators, especially those that have taken the time and initiative to create a strong social security disability program. Programs that help patients apply for Social Security Disability benefits will face an uphill battle that will be all the more difficult to win if the trust fund is depleted. Patients that have chosen a hospital because of their reliance on SSD benefit assistance may decide to select another, less expensive, provider if that is no longer a factor.

Unfortunately, SSD funding has been a growing problem, and a year ago the 2014 Trustees Report warned that unless drastic measures were taken the Social Security Disability Insurance Trust Fund would dry up. Trustees are once again urging Congress to take immediate action to shore up the fund. One such measure that has been suggested is diverting a portion of payroll taxes directly to the fund. However, at the time of this writing no resolutions have been approved by Congress.

Even though Medicare will continue on for the next 15 years, reduced monthly SSDI benefits will make paying medical expenses more difficult for the thousands of patients that are waiting for Medicare approval. Until a resolution is decided upon, it’s up to hospital administrators to decide on the best plan of action with the understanding that SSDI benefits and Medicare may not completely cover medical expenses in the near future.

 

Article By Jennifer Smith

 

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