Northern New England’s Young Adults and the Social Security Disability Insurance Program
Why are so many people in Vermont, New Hampshire, and Maine under age 35 receiving Social Security Disability Insurance payments?
The Social Security Disability Insurance (SSDI) program pays cash benefits to adults under age 66 who are judged no longer able to perform "substantial" work because of a disability but who have worked in the past. In 2015, the program paid benefits to almost 9 million disabled beneficiaries in the United States, or about 4.8 percent of the resident population.1 The average monthly benefit amount was $1,165.2 Medicare benefits are available as well after a waiting period of 24 months on SSDI.
The northern New England states had relatively high prevalence rates—defined as the number of disabled workers on SSDI divided by the resident population in the same age group. In 2014, Maine had the sixth-highest overall prevalence rate at 7.6 percent. Vermont was 11th at 6.3 percent, and New Hampshire was 12th at 6.1 percent.3
Where northern New England stands apart from all other states is in SSDI prevalence rates for adults under age 35. Vermont, New Hampshire, and Maine had the highest rates of adults under age 35 enrolled in the SSDI program among all the states in 2014. (See "SSDI Prevalence by Age Group, 2014.") The rates were also significantly higher than the national average for adults between ages 35 and 54 in those states.
In addition, between 2000 and 2014 the shares of people on SSDI under age 35 and ages 35 to 44 in northern New England generally rose four times as fast as the increase in the national average. (See "Increase in SSDI Prevalence, 2000–2014.") The share of the population on SSDI among people ages 45 to 54 rose more than twice as fast as the national average.
Furthermore, increases in the number of SSDI beneficiaries by age group contrast with much smaller growth or declines in the overall populations of adults under age 45 in Vermont, Maine, and New Hampshire between 2000 and 2014. In Vermont, for example, the population ages 22 to 34 barely rose at all, but the number of disabled worker beneficiaries increased almost 90 percent. Why did this happen?
Why Is Northern New England Different?
To investigate northern New England's special circumstances, consider the situation in Vermont. Several factors contribute to Vermont's high and rising prevalence of young people on SSDI: proactive efforts by state agencies to enroll young people in the SSDI program, out-migration of able-bodied young people (likely related to job opportunities), mental illness and opioid addiction,4 and relatively high rates of health insurance coverage.
Two recent nationwide surveys help debunk one additional possible factor: the three northern New England states do not have a higher proportion of working-age adults with self-reported disabilities than other states. The 2013 American Community Survey shows Maine is ranked 9th, Vermont 21st, and New Hampshire 36th among all the states.5 According to age-adjusted data from 2013 in the Behavioral Risk Factor Surveillance System, only about 20 percent of Mainers reported any disability, placing it 31st among the states.6 About 19.5 percent of people in New Hampshire reported any disability, leading to a rank of 37th; about 18 percent of Vermonters reported any disability, placing it 45th.
Proactive State Agencies
Vermont is known for its strong social-support programs. State agencies and other designated agencies in the state help to support SSDI application by people with disabilities who are unable to work. These agencies identify individuals who might need help finding a job, and, if working is too difficult, they help people work enough to qualify for the SSDI program and then assist with the onerous application process. Although New Hampshire and Maine are more conservative, both states offer substantial resources for people with disabilities.7
State agencies are likely aware that federally funded cash benefits from the SSDI program are usually more generous than partially state-funded Supplemental Security Insurance (SSI) cash benefits. The maximum federal monthly SSI amount in 2015 was $733,8 with a state supplement in all but four states. The average SSDI monthly benefit nationwide was $1,165. Perhaps more important, SSI beneficiaries receive Medicaid benefits partially funded by the states, whereas SSDI beneficiaries receive federally funded Medicare benefits after a 24-month waiting period. In many states, Medicare benefits are more generous than Medicaid benefits.
Despite a large in-migration of college students, Vermont in particular has fewer young people in their 20s and 30s than does the United States as a whole. At the same time, Vermont has a greater number of older residents than does the United States as a whole. Rural states commonly experience out-migration of young people who are looking for the job opportunities and social environments that come with urban settings.
If able-bodied people in their 20s and 30s are more likely to live outside Vermont to find jobs and establish careers, the ones who stay behind may be those who are more likely to qualify for the SSDI program. Some evidence supporting that hypothesis comes from the Vermont Roots Migration Project, a comprehensive collection of about 3,700 individual perspectives on Vermont from present and former residents.9 Those who left the state identify factors such as jobs, ability to earn higher wages elsewhere, and desire for more culturally diverse communities. If jobs and higher wages elsewhere encourage young people to leave Vermont, the proportion of those less able to pursue such opportunities, including young people who are struggling with physical and mental impairments, may be higher than in states with less out-migration of young people.
Mental Illness and Opioid Addiction
Two issues that touch many parts of the social fabric in northern New England are mental illness and drug abuse, especially opioid addiction. The two are not unconnected: mental disorders associated with substance abuse include schizophrenia and bipolar, depressive, anxiety, conduct, and personality disorders.10 According to the Vermont 2014 Mental Health National Outcome Measures, 39 out of every 1,000 people in Vermont accessed community mental health services in 2014, significantly more than the national rate of 22 per 1,000.11 Furthermore, in 2014, while 35 percent of SSDI beneficiaries in the United States as a whole qualified for benefits based on mental disorders, that share was much higher in New Hampshire (51 percent), Vermont (45 percent), and Maine (42 percent).12 It's difficult to know if those high percentages are related to opioid addiction, long and cold winters, or some other factor, but it is a curious phenomenon.
Opioid addiction is a national problem: the Centers for Disease Control and Prevention report that nationwide, use of heroin among young people increased 109 percent from 2002 to 2013.13 But the three northern New England States have been especially hard hit: the National Survey on Drug Use and Health for 2013–2014 noted in one snapshot from the period that those states ranked in the top fifth of all states for use of illicit drugs.14 Prescriptions for opioid pain medications can lead to opioid abuse as well.
High Rates of Health Insurance Coverage
Additionally, high rates of health insurance coverage in Vermont and other New England states mean that young people are more likely to see health care professionals who might refer them to the SSDI programs. In both Vermont and Massachusetts, only 3.7 percent of the population had no health insurance coverage in 2014.15
Other factors may contribute to the high rates of SSDI reliance in the region as well. Those who work with SSDI applicants point to intergenerational poverty as a factor. The fact that some northern New England areas lack diversity in jobs and have poor public transportation infrastructure may also play a role.
Why Should States Care?
Residents' participation in the federal SSDI program may benefit them in some respects. State governments benefit as well when support comes from federal programs, as opposed to joint federal-state (for example, SSI or Medicaid) or state (for example, state subsidies for exchange-based health insurance) support programs. However, in the longer run, having large numbers of young people on SSDI means fewer people in the labor force and lower tax revenues, often for many years into the future, and more people who rely on income support from the government.
A preliminary estimate for Vermont, assuming that an SSDI beneficiary who worked would have paid an additional 40 percent of the median income tax payment for his or her age group, suggests the state would have received about $3 million more in state income tax revenue in 2013 if the percentage of SSDI beneficiaries under 55 had risen only with the national average, rather than at the faster actual rate. Such losses recur year after year once a person qualifies for SSDI benefits because few people leave the program for reasons other than reaching full retirement age (66) and converting to old-age benefits, or death. In 2013 in Vermont, for example, benefits were terminated for just 7.7 percent of disabled worker beneficiaries.16 The majority of the terminations occurred when beneficiaries reached age 66 and converted to old-age benefits.
If the public understands the consequences of these relatively high rates of young people on SSDI, support may grow for investment in job-creation programs, work supports, further educational opportunities, and programs to alleviate drug abuse. Policymakers may also want to ask whether more can be done to help current SSDI recipients move beyond that reliance and return to the work force.
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