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Whistleblowers charge insurers overburden Social Security

An April 1, 2008 article in the New York Times says that whistleblowers have filed suits accusing insurers of abusing the Social Security Administration.

Disability insurers can reduce payments to clients if they are accepted for government disability payments. Lawsuits filed against Cigna Corp. and Unum Group say that the companies force clients to apply for workers’ compensation and government disability even when the insurers know those claims are frivolous.

These practices are clogging the Social Security system and forcing the truly disabled to wait years for a hearing, according to former Social Security Administrator Kenneth Nibali. It costs the government between $1,180 and $4,759 to screen an applicant for disability benefits, Nibali said, and the wait for a hearing from an administrative law judge has grown from 258 to 512 days since 2000.

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