People Respond to Incentives, Mental Health Edition

As low-income families experience growing economic hardship, many are finding that applying for Supplemental Security Income (SSI) payments on the basis of mental disability is the only way to survive. It is more generous than welfare, and it virtually ensures that the family will also qualify for Medicaid. According to MIT economics professor David Autor, “This has become the new welfare.” Hospitals and state welfare agencies also have incentives to encourage uninsured families to apply for SSI payments, since hospitals will get paid and states will save money by shifting welfare costs to the federal government.

Growing numbers of for-profit firms specialize in helping poor families apply for SSI benefits. But to qualify nearly always requires that applicants, including children, be taking psychoactive drugs.

Marica Angell, "The Illusions of Psychiatry"