BUSINESS
04/09/2008 05:12 am ET | Updated May 25, 2011

Social Security Choking On Paperwork From Insurance Companies

The Social Security system is choking on paperwork and spending millions of dollars a year screening dubious applications for disability benefits, according to lawsuits filed by whistle-blowers.

Jessica Ortiz of San Diego said her disability insurer called more than 10 times after she was hurt in a car crash, insisting that she apply for Social Security. She was denied, as she had expected.

Insurance companies are the source of the problem, the lawsuits say. The insurers are forcing many people who file disability claims with them to also apply to Social Security -- even people who clearly do not qualify for the government program.

The Social Security Administration defines "disabled" much more stringently than the insurers generally do, so it rejects most of the applications, at least initially. Often, the insurers then tell their claimants to appeal, the lawsuits say, raising the cost.

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