(UM12-15) - Estimates of the Potential Insurance Value of Disability Insurance for Individuals with Mental Health Impairments
John Bound and Timothy A. Waidmann
Since the mid-1980s there has been dramatic growth in the number and fraction of DI and SSI beneficiaries with mental illness. With longer life expectancies and younger ages of disability onset than beneficiaries with physical impairments, their growth exerts added fiscal pressure on the programs. While not specifically focused on mental illness, fears of an increase in the duration (and thus prevalence) of disability claims that may result from this demographic shift have generated calls to tighten eligibility rules. The proposed research would examine the likely consequences of such a retrenchment for the population with severe mental illness. Using data from the HRS and NHIS linked to SSA administrative data, we will create statistically matched control groups of non-beneficiaries with severe mental illness and estimate the earnings, income, and health insurance coverage that beneficiaries would face were disability benefits not available.