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Math and SSDI fraud, and what's really shocking

The large numbers of the Social Security programs are sometimes incomprehensible. Most people simply do not have experience working with such large numbers. The average household in Ohio earns $48,071 per year, a number most people can understand. By contrast, Tiger Woods earned $59.4 million, a number difficult to grasp. You can make some sense of it, if your break it down by hour, or $6780. This means Tiger Woods earns as much as the average Ohio household earns in a year in seven hours.

Similarity, Social Security Disability Insurance (SSDI) numbers seem unfathomable. In 2011, there were 9.8 million people receiving SSDI, with a program cost of $135 billion. A TV news program recently expressed its outrage at a story from Utah, where various recipients of the SSDI program were found to be fraudulently receiving benefits. The Social Security inspector general and the Utah Attorney General's office looked at 368 alleged cases of fraud, and eventually denied benefits to 157 beneficiaries.

This was characterized as "shocking" by a news program, but the real shock from the story was the ignorance and lack of understanding of numbers and basic math they displayed. While 157 cases of fraud is a problem, the real question is how large of a problem.

In Utah, according to the Media Matters report, there were 48,777 in Utah receiving SSDI payments. The 157 people represent 0.3 percent of the total number of SSDI recipients.

And while every program would like to be 100 percent fraud free, one has to keep in mind that investigating fraud is very expensive, because you have to have trained investigators review all applications and files in order to determine if the application is fraudulent.

Given the cost of investigating these matters, the cost effectiveness of the investigations must be considered, as it may cost more to investigate the fraud than is eventually saved in many cases.

Source: Media Matters, "Fox's Disability Insurance Fraud "Shocker" Falls Flat," Remington Shepard, April 11, 2013

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