Disability Benefits in New Hampshire

An Analysis of the Costs of Relaxing Eligibility Criteria
PRS Briefs
PRS Policy Brief 0910-11
Tuesday, June 8, 2010

New Hampshire has the most restrictive duration requirements to receive state disability benefits in the nation. While all other states and the federal government only require that an applicant be unable to work for one year, New Hampshire requires that an applicant be unable to work for four years. House Bill 606, which is currently being considered in committee, proposes reducing the duration requirement to one year and accepting federal determinations of eligibility. As New Hampshire is facing a budget crisis, the debate over House Bill 606 centers on the cost of providing benefits to those who would become eligible.

This paper analyzes the costs of implementing House Bill 606, and finds that the cost estimates provided by the New Hampshire Department of Health and Human Services (DHHS) are a good starting point, but overestimate the cost of implementing the bill. While there would be an increase in the cost of providing medical coverage because of the newly eligible, the DHHS numbers do not account for the lower cost of providing benefits to people with less severe disabilities. In addition the DHHS numbers fail to factor in the potential benefits of increased federal support. More importantly, while the DHHS references the cost of uncompensated care, the inability to quantify the magnitude of the cost of uncompensated care means this factor is not fully analyzed by the DHHS. There are a few areas where the DHHS underestimates the cost of implementation, but the areas where the DHHS numbers are too high are generally of greater magnitude than those where the numbers are too low.

The analysis in this report is limited by the lack of available data. Much of the analysis is forced to use data from previous years that may no longer be applicable. The conclusions of this report could be strengthened through the conduction of a survey that provides more recent information on the situation of applicants who have been denied benefits because they do not meet the duration requirements. In addition there are organizations with further reports on the costs and benefits of implementing House Bill 606, which we were not able to contact in time for this report. However, the analysis in this report is able to provide a general overview of the fiscal consequences of implementing House Bill 606.