## Short-Range Actuarial Projectionsof the Old-Age, Survivors, and Disability Insurance Program, 2005

ACTUARIAL STUDY NO. 119
by Chris Motsiopoulos
and Richard B. Tucker

D. DISABLED WORKER ADJUSTED INCIDENCE RATE

Shifts in the age and gender composition of the insured population occur over time. To compare disability incidence rates for different years, we need to eliminate the distortions caused by these shifts. For this reason, gross incidence rates are adjusted to provide a measure of the rate at which individuals are being awarded that is independent of demographic shifts. The short-range model performs the adjustment using direct standardization on 5-year age groups. Sample calculations of gross and age-adjusted incidence rates are presented below.

Gross Rate

The gross incidence rate for a particular year is simply total awards divided by exposure for that year. The following table is used to calculate the gross incidence rate for male disabled workers for calendar year 2010. Dividing total awards of 457,337 by the year's exposure of 77,812,114 life-years gives a gross incidence rate of 5.88 awards per thousand exposed.

Age
Male disability insured
aggregate years exposed
for calendar year 2010
Projected
male incidence rate
for calendar year 2010
(per thousand)

Male awards
for calendar year 2010
based on 2010 exposure
15-19
1,760,355
0.68
1,190
20-24
7,359,356
1.61
11,878
25-29
8,670,196
1.89
16,378
30-34
8,648,225
2.17
18,758
35-39
8,511,852
2.91
24,778
40-44
9,008,014
3.87
34,843
45-49
9,537,750
5.19
49,520
50-54
9,295,584
8.27
76,828
55-59
7,739,523
13.63
105,451
60-64
5,895,973
17.76
104,683
65-NRA
1,385,286
9.41
13,030
Total
77,812,114

457,337

Age-Adjusted Rate

The age-adjusted incidence rate for a particular year is computed as total "adjusted" awards divided by the exposure for the standard year. Adjusted awards represent the number that would occur in a particular year if the insured population had the same age-specific profile as the insured population for the standard year. The following table is used to calculate the age-adjusted incidence rate for male disabled workers for calendar year 2010. Dividing total adjusted awards of 364,672 by 2000 exposure of 71,457,821 life-years gives an age-adjusted incidence rate of 5.10 awards per thousand exposed.

Age

Male disability insured
aggregate years exposed
for calendar year 2000
Projected
male incidence rate
for calendar year 2010
(per thousand)
Male adjusted awards
for calendar year 2010
based on 2000 exposure
15-19
1,818,859
0.68
1,230
20-24
7,223,108
1.61
11,658
25-29
8,026,455
1.89
15,162
30-34
8,890,231
2.17
19,283
35-39
9,918,258
2.91
28,872
40-44
9,902,119
3.87
38,301
45-49
8,781,373
5.19
45,593
50-54
7,432,353
8.27
61,428
55-59
5,331,906
13.63
72,647
60-64
3,787,418
17.76
67,246
65-NRA
345,741
9.41
3,252
Total
71,457,821

364,672