Poverty, Welfare, and Work
Medicare Part C
"Medicare Advantage" program that expands beneficiaries' options for participation in private-sector health care plans, created in 1997 financed by the FICA tax, premiums, federal and general revenue
Supplemental Security Income (SSI)
-"last resort" -must be elderly or disabled -funded by general revenues -max benefit: $721 for an individual, $1082 for couples
What did Berkowitz say about the origins of the distinction between welfare and social insurance?
-1930s: in order to change the public image of the Social Security, the program's defenders sought to sharpen the distinctions between social insurance and welfare & explain how social insurance better served America's needs in a world beset by threats to the nation's security. -marketed as a complement to welfare as an already established and tested tactic in Europe for responsibly meeting future expenditures. -by 1939, the same people marketed SS benefits as an alternative to welfare that would protect the country from the "evils that had befallen Europe" including dependency and paternalism caused by welfare programs.
What groups of workers were specifically excluded from the social security old age benefits when they were created in 1935? What groups were added in the 1950s? What groups were added in the 1980s?
-1935: federal workers, agricultural workers, domestic workers, self-employed -1950's: disabled people -1980's: nonprofit workers, newly hired federal workers,
How have the distributions of income and wealth changed over the past 30 years?
-1989-The bottom 50% of the wealth distribution held 3% of national wealth, the top 1% held 30% of wealth -Now- bottom 50%- it holds 1.1%, top 1% now it hold 34.5%.
How did the Deficit Reduction Act of 2005 change TANF?
-50 percent of all adults that are receiving TANF assistance and 90 percent of two-parent households receiving assistance must participate in work activities -tightened the definition of what counts by limiting time for some activities and requiring more elaborate verification -New penalties were linked to state compliance with work requirements -The caseload is the combined total of TANF cases and cases in SSP that are counted as MOE -Caseload credits are now based on reductions from the 2005 caseload
What federal social insurance programs and means-tested transfer programs provide benefits to undocumented (illegal) immigrants?
-Emergency medical treatment, school lunches, states may opt to provide state-funded TANF -Issue w/ "complex" families where parents are undocumented and their child is not
Name and briefly explain the four revenue sources that currently finance the OASDI program.
-FICA ( 12.9% half from employee other half from employer but tends to be paid by the employee fully) -SECA(self employed- parallel structure but is paid fully by the employer) -interest on the trust( 2% of treasury securities) -general revenue (from part of the income tax on social security
How is poverty related to various factors such as nativity, work, age, race, and family structure?
-Foreign-born, more likely to be poor -Naturalized citizens - not native born Americans, have a higher average income than native-born Americans -Most poor people are under the age of 18. -Least likely to be poor are elderly.
Supplemental Nutrition Assistance Program (SNAP)
-Gross monthly income at 130% of the fed. poverty level, net income about $19,800, assets below $2250 -NO college students or undocumented immigrants -fully funded by federal government, state administered -avg. benefit $125 a month
What are the consequences of beginning to receive OA benefits before your normal or full retirement age? What is the consequence of waiting to receive your full OA benefits until after your full retirement age?
-If you retire before the standard age (62), your benefits are reduced by 25% (for the insured worker) and 30% for spouses. -If you delay receipt of benefits, you get an 8 percent bonus per year up until you reach age 70. -If you collect before full retirement age, you are paid less per month, but assuming you reach the average life expectancy, you will earn the same, if not more. If you wait until after your full retirement age to collect, you make more money per month, however you will receive less in the long run if you do not reach the average life expectancy.
Why does Berkowitz suggest that the Social Security reforms in 1939 were cynical?
-In order to make Social Security and social insurance more popular, the Roosevelt administration & social insurance supporters changed the benefit structure of social security to more resemble welfare benefits, all while complaining about how terrible the welfare system was.
What is a "Medigap" insurance policy? Why do people buy them?
-It is a policy that can be bought privately to fill the gaps in insurance provided by medicare -it helps make monthly health care payments more predictable
What does Berkowitz mean when he suggests that welfare was a form of political patronage?
-Local politicians wanted to reward their friends. -For example, in 1935, Ohio Governor Davey used the state's old age pension rolls as a way of insuring political loyalty. Elderly pensioners received many reminders that they owed their payments to the beneficence of Governor Davey -pattern of candidates using promises and warnings about old age assistance laws and were often 'operated on the basis of political patronage'.
Does the set of means-tested federal programs provide a comprehensive safety net that protects poor Americans from poverty and privation? Why or why not? Please base your answer on specific programmatic details about the benefits available and who is qualified to receive them.
-NO, it protects particular narrowly defined groups of poor people, such as children, elderly, and disabled people. -There is almost nothing besides limited SNAP that is offered to working-age, able-bodied poor people. -TANF- must be pregnant or have minor child -SNAP- work requirements -SCHIP- Child -those convicted of drug related crimes cannot receive most assistance -Medicaid varies state to state and you must be "medically needy" -Few options for immigrants, even legal ones -SSI- elderly or disabled
Temporary Assistance for Needy Families (TANF)
-Needy families w/ a minor child or pregnant women -NO unwed teens, non-citizens before 5 years, or people w/ criminal backgrounds -Contains work requirements, 5 year limit on benefits -Block Grants (created by PWRORA), MOEs -State level
Do you think that U.S. anti-poverty programs are effective? Why or why not?
-No because SNAP only gives you about 4 dollars a day per person for a family of 3 and TANF provides about only 400 dollars month for a family of 3. Not very adequate.
Does the U.S. have the greatest healthcare system in the world? Why or why not?
-No, the there are lots of requirements people need to satisfy before receiving care such as for Medicare, Medicaid, and SCHIP for children. -For example for Medicare, you need to be a working adult for 40 quarters but if not you need to pay a premium. For Medicaid you need to be poor or extremely poor in some states to receive care. Also for SCHIP, it is not an entitlement program so states can determine if a child should receive it or not.
How do SCHIP eligibility guidelines relate to Medicaid eligibility guidelines?
-SCHIP (1997) provides federal funds to expand medicaid eligibility to a greater number of children who are uninsured
How are OASDI and SSI eligibility similar? How are they different?
-SSI is the "ghost" version of OASDI -Disabled children could receive SSI but not OASDI -SSI provides the benefits of OASDI to those who do not have the proper work history or familial relationship -It is possible to be receiving both
What restrictions exist on the receipt of social insurance or welfare programs for legal immigrants? Please be specific by program.
-SSI- can receive if they were on the payroll before PWRORA, are refugees or asylees -TANF- if in US before PWRORA -SNAP- if on rolls before PWRORA, asylee, refugee, under 18, or waits 5 years -Medicaid- emergency treatment or on SSI
What were the amendments to the Social Security Act in 1939? Why were they important? How do these amendments relate to the distinction between social insurance and welfare?
-The "family concept" was introduced: The Amendments added two new categories of benefits: payments to the spouse and minor children of a retired worker (so-called dependents benefits) and survivors benefits paid to the family in the event of the premature death of a covered worker -Fully insured workers had worked 40 quarters in covered employment. -Provided more generous benefits for aged, married couples..If you were dependent and had a relationships to a fica tax payer you received benefits
What are the two initial tests that one must pass in order to be eligible for Disability Insurance payments from OASDI?
-The Recent Work Test: You have to have worked recently - based on when you became disabled. (Between ages 24 and 31, work during half the time for the period beginning with the quarter after you turned 21 and ending with the quarter you became disabled.) -The Duration of Work Test: You have to have worked a sufficient number of years before you became disabled
How does the Census determine whether or not a person is "living in poverty"?
-There is a federal poverty standard which is an income level below which a person is declared to be living in poverty. Varies by people in family. Initially: poverty standards determined by calculating the price of the basket of food. -Family size, composition, and age
How did the American Recovery and Reinvestment Act change TANF?
-Used social policies to stimulate the economy by distributing cash (TANF emergency contingency fund was created-Federal government agreed to pay 80% of the cost of recession-related costs (increased caseloads during 2009 and 2010) -Caseload reduction credit frozen, essentially halting the provisions of the DRA of 2005
Does granny get welfare? Why or why not? That is, when you consider the features that are thought to distinguish social insurance from welfare, are the social insurance benefits that many elderly people receive clearly different from welfare benefits? If so, how so? If not, why not? If your answer is "it depends"...on what does it depend?
-Yes, she receives welfare, if you define welfare as being means-tested, redistribution, and not funded by dedicated taxs/not being paid into. -WHY: granny benefits from redistribution, there is some small variation by state, it's likely she never paid into medicare parts B and D, there are some semi-means tests like how people pay different premiums, medicare is financed in part by general revenues
Did the PRWORA represent a significant shift in welfare policy in the U.S.? If so, how so? If not, why not? Please provide a detailed and complete response that considers the many aspects of social policy that were changed by the PRWORA and the evolution of the legislation over time.
-Yes, there was a shift, but not for the better. -Changed an entitlement program to block grants. -Established work requirements. -Ended child care benefits. -Made it much harder for the needy to gain benefits. -Time limits
Means-Tested Welfare
-a narrowly defined group of needy people benefit -financed by general revenues -Means-tested- generosity dependent on need -administrated at state and local levels -stigmatized and unpopular -REDISTRIBUTION
What is the AIME and how is it calculated? Please be clear and specific.
-average indexed monthly earnings -It does not include inflation and is not the same as index to standard of living. -Establishes the base benefit you will receive. -35 highest earning years divided by 35, divided by 12, indexed by national average wage=Monthly average wage
What is the FICA tax and what is it used for? What is the rate? Is this a regressive, flat, or progressive tax? Why?
-dedicated tax on earned income that finances OASDI (12.4%) and Medicare is (2.9%) total of 15.3%) -regressive because the rich pay a lower tax rate and poor and middle class pay a higher tax rate
SCHIP/Medicaid
-means tested eligibility -funded by both states and federal govt -benefits vary state to state but must cover inpatient care and outpatient hospital services
What five amenities are poor households most likely to have (according to the Heritage Foundation report)?
-microwave, ac, car, vcr, dvd player
Social Insurance Programs
-participation is compulsory so most people benefit -financed by dedicated taxes -NOT means tested (people who earn more usually pay more taxes and earn more benefits) -administrated at national level -widespread popularity, no stigma
What is the significance of a program being an "individual entitlement?" Which federal programs are individual entitlements?
-people have an individual legal right to receive assistance that can be enforced in federal court and that Special budgetary status bypasses budget committees and obliges Congress to appropriate sufficient funds to pay all legitimate claims for benefits -all but TANF and SCHIP are entitlements
What must able-bodied adults without dependents (ABAWDS) do to qualify for SNAP benefits?
-register for work, accept suitable job offers, and fulfill work or training requirements established by State welfare agencies - food stamp eligibility for ABAWDs is limited to 3-6 months in any 36-month period unless they are working at least half time or in a work or training activity
Name and briefly explain several important policy changes that were made by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA).
-repeals AFDC and JOBS, creates TANF -repeals entitlement to child care -ties cash assistance to work requirements -switched from entitlement to block grants -redefines disability for minors -lifetime limit of 60 mos. (some hardship exemptions) -child support enforcement
What two characteristics define the essential and consistent nature of the tax and benefit structure of the Social Security OASDI program? Briefly explain each characteristic.
-tax structure is regressive but benefits are progressive -FICA tax takes in 12.9% of persons income toward social security.
Name the activities that qualify as "work" under the PRWORA. What are time limits and why are they thought to be significant to welfare policy?
-unsubsidized employment, subsidized employment, subsidized public sector employment, work experience, on-the-job training, job search and job readiness assistance, community service programs, vocational education training, or providing child care for a community service participant. -time limits: lifetime limit of 60 months, 24 months before work requirements
Explain why means-tested in-kind are provided as social policy benefits rather than cash...name and describe several programs that provide in-kind benefits.
-welfare recipients are seen as untrustworthy and unintelligent/irresponsible, so in-kind benefits allow the government to see and control what the aid is being spent for -in kind programs: medicare, medicaid, SNAP, school lunch, SCHIP
What are the five stages in the Disability Insurance eligibility determination process?
1. Are you working? (if you earn over $1070 a month you are ineligible) 2. Is your medical condition severe? (must limit work for at least one year) 3. Is your disability on the list of impairments? 4. Can you do the work you did before? 5. Can you do a different type of work?
Goals of PWRORA
1. End dependency of govt. benefits 2. Encourage 2 parent households 3. Encourage self-sufficiency 4. Reduce out-of-wedlock pregnancy (esp. among teens)
When was the DI part of OASDI created?
1956
Food stamp benefits are financed by...
A combination of federal and state revenues in the states that accept the "buy-in" option to increase benefit generosity, otherwise federal revenues.
How does the housing available to poor people in the U.S. compare to people in EU nations (according to the Heritage Foundation report)?
Argue that US housing on average is much larger in living space (more than twice than in EU nations. They also argue that US poor people do not complain about the amount of space they have.
Medicare Part A is "free" (there are no out-of-pocket costs).
False, you must pay a premium if you and/or your spouse have not worked 40 quarters in covered employment
Once you are qualified for DI benefits you will continue to receive them for life.
False, your eligibility for DI benefits may be re-examined periodically, depending on your condition and you will transition from DI to OA benefits when you reach your normal or full retirement age.
Which of the following Medicaid benefits are required by the federal government?
Family planning services and supplies
According to the Census report, how is poverty related to nativity?
Foreign born non-citizens are the most likely group to be poor.
Medicare Part A
Hospital Insurance- Fica Tax (2.9%)( 40 or more quarters in employment), subsidized/ if not, premiums pay for inpatient hospital, home health, skilled nursing facility, and hospice care
Is eligibility to receive SNAP benefits based on individual, family, or household characteristics?
Household -financial, employment/training-related, and "categorical" tests for eligibility
Under what circumstances are OASDI benefits taxable?
If you make $25,000+ as a single taxpayer, or $32,000+ as a married couple.
Howard's Lower Tier of the Welfare System
Means Tested Welfare- Age and Disability are major components (stigma, less generous, varies by state)
How does Medicaid relate to Medicare? Is it possible to participate in both programs simultaneously?
Medicaid pays Medicare expenses (including premiums, deductibles and coinsurance) for individuals whose income is at or below 100% of the Federal poverty level and whose resources are at or below twice the standard allowed under SSI (so yes)
Medicare Part B
Medical Insurance- helps pay for physician, outpatient hospital, home health, and other services. paid by premium and copay and general revenues
Medicare Part B...
Pays for doctor visits, outpatient medical tests, medical devices, and other benefits and requires participants to pay a monthly premium that is higher for higher income people.
According to the Heritage Foundation report, do poor people in the U.S. have an adequate diet? Why or why not?
Poor people in the U.S. have an adequate diet according to the Heritage report since the percentage of persons with high fat intake (as a share of total calories) is virtually the same for low-income and upper-middle-income person.
How did the American Recovery and Reinvestment Act change SNAP?
SNAP benefits increased 13.6% (recently repealed)
Howard's Upper Tier of the Welfare System
Social Insurance -- Social security, medicare, unemployment (benefits are politically popular, uniform, and generous)
What is the largest group of workers that is currently not included in the OASDI program?
State and local government workers in states that didn't elect into the OA program that eventually became the OASDI program.
Which 2 programs are NOT entitlement?
TANF and SCHIP
What do the lifelong benefit and tax tables from the Urban Institute suggest about the distinction between welfare and social insurance?
That people who turned 65 in the 1960 paid virtually zero taxes and still received benefits proving the theoretical point that welfare and social insurance are pretty much the same. Additionally as the years go on (1970, 80s, 90s, etc) people will pay less in taxes and will receive substantially more in benefits.
What is the "donut hole" in Medicare coverage?
The donut hole is the gap in Medicare coverage, where the program ceases to pay for prescription drugs. This was put in to reduce the cost for the program, making all medication that was between $2400 and $5100 an out of pocket cost that Medicare would not subsidize. It reduced the controversial nature of the program by limiting the expenditures, and encouraged people to "economize" on prescription drugs.
What is a Separate State cash assistance Program? Why is this significant to TANF time limits?
These are state programs funded by Maintenance of Effort (MOE) funds the federal government requires the states to pay to assist needy families. Families that receive aid from these programs are exempt from time limits, meaning they are not subject to the TANF regulation of only being able to get assistance for 24 months at a time, and for only 60 months total in their lifetime. (They also aren't subject to TANF work requirements).
Howard argues that disability and age are key boundaries in the American welfare state.
True
The ACA increased the generosity of federal match rates (in grants to the states) to finance Medicaid.
True, but the more generous match rates only apply to newly eligible Medicaid participants in states that expand Medicaid eligibility.
Although income inequality is high in the U.S. (compared to other advanced democracies), wealth is even more inequitably distributed.
True, in 2010 the bottom half of the wealth distribution had only about 1% of total wealth
How is the Supplemental Poverty Standard different from the Official Poverty Standard?
Unlike the official measure, the supplemental standard may vary from place to place and the supplemental standard includes consideration of child care costs; the official measure does not.
According to the Census report, which age group was least likely to be poor during the 1970s?
Working-age adults (age 18-64)
Is it possible to work and receive disability (DI) benefits simultaneously?
Yes, if you earn less than $1070 a month, or $1800 if you're blind.
What role, if any, do attorneys play in the disability eligibility determination process?
You have the right to appeal if your benefits are denied. Your appeal goes before an administrative law judge and you are represented by a privately hired attorney, who's fees are subject to federal regulation.
Income, according to the Census definition, includes...
dividends, veteran's benefits, alimony received, and earned income.
What are the income sources that are counted as "income" in the Census definition?
earnings, unemployment compensation, workers' compensation, social security, Supplemental security income, Public assistance, Veterans' payments, Survivor benefits, Disability benefits, Pension or retirement income, Interest, Dividends, Rents, royalties, and estates and trusts, Educational assistance, Alimony, Child support, Financial assistance from outside of the household, and other income (pre-taxed sources of income only)
How has the relationship between poverty and age changed over time?
elderly used the be the most poor group and now they are the least poor group because of welfare reforms
Medicare Part D
prescription drug benefit (created in 2003 and phased in by 2006) Financed by premiums, copays, state revenue, and federal general revenues