Ninety percent of our clients at Milestone Consulting – and most trial lawyers’ clients who are severely disabled – rely on social security disability insurance (SSDI) during litigation and for the remainder of their lives. SSDI is a program that provides cash benefits to non-elderly adults who have worked in the past but are now inhibited to do so as a result of a disability. The SSDI program also pays benefits to some of those disabled adults’ dependents.
Millions of people rely on SSDI to make ends meet. In fact, the SSDI program paid a total of $143 billion in benefits last year to almost 9 million disabled beneficiaries and about 2 million dependents. However, the Congressional Budget Office (CBO) has estimated that the SSDI fund will be exhausted by 2022.
Spending on SSDI benefits (without taking inflation into account) has grown more than tenfold between 1970 and 2015. Even though the SSDI caseload will likely grow at a more modest rate over the next decade, the CBO projects spending will exceed income after 2018. If that happens, the trust fund will be exhausted in 2022.
In a possible scenario where the SSDI program doesn’t get properly funded, increased access to capital during litigation may be needed to sustain clients. In the current space, the for-profit, non-recourse loan industry is unfortunately unregulated, allowing their business models and guarantees to investors to make the cost of capital exorbitant for plaintiffs. Interest rates from these lenders can be as much as 50 to 100 percent per year. There is a growing need – even more so if the SSDI is reduced or exhausted in the next few years – to give plaintiffs access to capital without the staggering interest.
If these benefits are reduced or eliminated, the Bairs Foundation can serve as a cost effective replacement or compliment for plaintiffs who need it. The Bairs Foundation is a nonprofit organization offering a lending alternative that provides the financial assistance families need during litigation – without the hefty price tag. The Foundation charges seven percent simple interest to borrowers, so winning a lawsuit doesn’t also break the bank.
Note: Plaintiffs and their attorneys should also be cognizant that clients on SSDI become eligible for Medicare 24 months from the date of eligibility. Those parties may need to consult a Medicare compliant expert when the case resolves, pursuant to the Medicare Secondary Payor Act (MSP).
A West Point graduate where he served as captain and military aviator, John Bair continues his commitment to our country through his efforts within the settlement planning industry. He has represented families of victims lost in the Flight 3407 crash, offered pro bono services to the families of 9/11 victims and drafted the first consumer protection bill for plaintiffs (H.R. 3699).