Moving People From Welfare To Disability Rolls Is A Profitable, Full-Time Job Planet Money looks at company called PCG which state governments hire to move people off of welfare and onto disability. States hire PCG to do this because states pay part of the bill for welfare, but don't pay for people on disability.

Moving People From Welfare To Disability Rolls Is A Profitable, Full-Time Job

Moving People From Welfare To Disability Rolls Is A Profitable, Full-Time Job

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Planet Money looks at company called PCG which state governments hire to move people off of welfare and onto disability. States hire PCG to do this because states pay part of the bill for welfare, but don't pay for people on disability.


From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm Audie Cornish.

What should government do for the country's most vulnerable citizens, for people who just aren't making it? It's a fundamental question. And as we've been reporting this week, America's disability programs have become, in part, a default answer. There are several reasons for this. One has to do with changes we made to our social safety net back in the mid-1990s.

PRESIDENT BILL CLINTON: We can be proud that after decades of finger-pointing and failure, together we ended the old welfare system. And we're now replacing welfare checks with paychecks.


CORNISH: That, of course, is President Bill Clinton in 1998 talking about ending welfare as we know it and celebrating a huge decline in welfare rolls. But when you consider the country's ballooning disability programs, now covering some 14 million Americans, the story starts to look more complicated.

Here's Chana Joffe-Walt with our Planet Money team.

CHANA JOFFE-WALT, BYLINE: In order to turn welfare checks into paychecks the federal government needed states to want to move welfare recipients into the workforce.

Mary Daly, an economist at the San Francisco Federal Reserve, says to do this the federal government forced states to pay a much larger share of the cost of welfare.

MARY DALY: So states had every incentive to try to get their welfare case loads down.

JOFFE-WALT: Hopefully, by getting people jobs. Welfare rolls were cut in half in just a few years and we all assumed that's what was happening. But Mary Daly wondered if there wasn't a different story playing out at the same time. States wanted to get people off the rolls and save money. If they couldn't get them jobs there was another option: Disability.

Disability is a federal program paid for by the federal government. There are some exceptions, but most states don't have to pay any of that cost. Meaning, if the states can get people on to disability...

DALY: They don't have to pay for them.

JOFFE-WALT: But they do have to pay for people who are on welfare.

DALY: They do.

JOFFE-WALT: Mary Daly became more and more convinced this was happening. She published papers. In 2011, she co-authored a book about it. But it was a just a theory.

DALY: I have my models and my theories and I can write down what economists think. But you're never sure. You look for the empirical data. But you're never sure that what your models say actually happens.

JOFFE-WALT: Until Mary Daly became very, very sure, thanks to one chance encounter she had in Los Angeles. She was at a conference.

DALY: It was a big hotel and this was the, you know, like the second floor ballroom type of thing where they put the coffee break.

JOFFE-WALT: Mary spotted a young guy in the corner, looking a little nervous. She struck up a conversation and the guy started to tell her what he did for a living. Specifically, this man told Mary, states were hiring his company to help them comb through their welfare rolls and identify people would could qualify for disability.

DALY: And that they were now helping states move people on to the federal program. So I said, really? We have this written in our book that this is what's likely happening.

JOFFE-WALT: You're like my model predicts that this is going to happen.

DALY: Yeah. I said this is what we wrote in our book. We have a diagram that suggests this will happen. But you're telling me it actually is happening. And he said, yes. Maybe one of the biggest regrets I have is that I was so surprised to run into him and to learn this that I didn't question him more.

PAT COAKLEY: It was a good conference. I believe I did speak with her outside of one of the sessions that had just ended.

JOFFE-WALT: This is Pat Coakley. He works for a company called Public Consulting Group, PCG, that indeed helps states move people from welfare to disability. And Pat tells me business is going well. They have 17 contracts with states and counties all over the country. They just signed up a new one, Missouri.

COAKLEY: So we're offering to work to identify those folks who have the highest likelihood of meeting disability criteria.

JOFFE-WALT: Pat says often they don't have medical records to look at, so they look for other things. For instance, patterns in a person's work history that might indicate a medical problem. And then, PCG calls them up and starts asking questions.

CATHY: This is Cathy with Public Consulting Group.


CATHY: Good. How are you?

JOFFE-WALT: The PCG office is in eastern Washington state and it's basically a call center. Head-setted women in cubicles surrounded by pictures of their kids, postcards of Hawaii, making calls all day long to potentially disabled Americans; trying to help them discover and document their disabilities.

UNIDENTIFIED WOMAN #2: The high blood pressure, how long have you been taking medications for that? And the sleep apnea, since about 2008. OK, let me change that date for you, OK? OK, that's perfect. Can you think of anything else that's been bothering you and disabling you and preventing you from working?

JOFFE-WALT: The PCG agents will help the potentially disabled fill out the disability application for Social Security over the phone. And by help, I mean, the agents actually do the filling out. When the potentially disabled don't have the right medical documentation to prove a disability, the agents at PCG will help them get it. They'll call doctors offices, X-ray centers, get records faxed.

UNIDENTIFIED WOMAN #2: Do you have an address to Quest Diagnostics? Uh-huh. I can actually try to look that up for you, if you like for me to.

JOFFE-WALT: If the right medical records do not exist, PCG will set up doctor's appointments, call applicants the day before to remind them of those appointments.

UNIDENTIFIED WOMAN #4: I just wanted to confirm with you that Zachary will be at that appointment. And the address, I'll give you the address.

JOFFE-WALT: This is customer service in its most aggressive form. And the states that hire companies like PCG argue this is exactly what people with disabilities need. They need experts who can help them move through the complicated application process. And PCG is definitely expert at this.

When they win a new contract in that state or county, the very first thing they do is set up a meeting with the local Social Security office. Pat Coakley, the boss, will personally go and introduce himself, tell them, you guys are going to be getting a lot of applications from us; we want to make things as easy as possible for you all.

COAKLEY: We go through even to the point, frankly, of: Do you like things to be stapled or paper clipped.


JOFFE-WALT: Do they have opinions about that?

COAKLEY: Oh, yeah. And paper clips win out a lot of times because they need to make photocopies, and they don't want to be taking staples out.

JOFFE-WALT: These people are thorough. And once you're in their sights, they are on your side. They want you to get onto disability. And there is one simple reason for that. At the end of a PCG tour, I asked manager Leslie Jose...

And how do you get paid?

LESLIE JOSE: We get paid by - our client would be like the state or the county. And so, we'll get paid when we're successful with a person's claim.

JOFFE-WALT: Per person?

JOSE: Per person. We have other...

JOFFE-WALT: So for every person that you get onto disability...

JOSE: For every person, then we we would submit an invoice for that person.

JOFFE-WALT: In PCG's bid for the Missouri contract, it asked for $2,300 per person. Every time one of these agents succeeds in winning a client disability, the state will write PCG a check. If it's successful, PCG estimates it'll save Missouri about $80 million with all the people that will be getting onto disability and off of welfare.

That's good for the state. And it's almost always good for the person moving on to disability. They can make much more money on that program than on welfare.

In this office - and offices like it across the country - what is happening is the makeshift assembly of a new sort of social safety net. They're building it from the ground up. It's not one anyone exactly planned for, but for now it seems to be what we have.

Chana Joffe-Walt, NPR News.

CORNISH: You're listening to ALL THINGS CONSIDERED from NPR News.

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