WELFARE, SOCIAL SECURITY AND HEALTH CARE IN THE UNITED STATES

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• WELFARE, SOCIAL SECURITY AND HEALTH CARE IN THE
  UNITED STATES

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I- Historical Development

• A. From the beginning of Social Security to the
  New Deal
• At the beginning Helping the poor, a matter for
  private charity or local government
• - high level of industrialization
• - great surface of farmland
• ? everyone who was willing to work could find a
  job
• Local villages and towns recognized the
  obligation to help the needy (almshouses,
  workhouses)
• Federal government and States recognize certain
  risks and the need for a social insurance to
  public welfare
• ? but it was not generalized

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2. The change The Great Depression and the
arrival of President F.D. Roosevelt

• Great Depression (1929-1932)
• ? first time that a lot of Americans were out of
  work
• because of the failures of banks and
  businesses
• F.D. Roosevelt elected president in 1932
• Period of the New Deal economic security
  legislation
• Creation of a Committee on Economic Security
• Social Security Act (14
  August 1935)
• ?2 social insurance
  programs
• . on a national scale to help
  meet risks of old age
• . on a federal-state scale to
  help meet risks of
• unemployment
• ? financed jointly by federal and state
  governments,
• ? administrated by states under conditions set
  by federal
• government (cooperative federalism)

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B. The Evolution

• 1. Medicare and Medicaid
• ? Social Security Amendments in 1965
• 2. The broadening of the programs
• Programs broadened and new one added
• . Food Stamp program (1964)
• . Federal-State programs (home energy
  assistance)
• Characteristic of the development of social
  welfare programs
• High degree of decentralization Federal,
  States, local government
• Important role played by the private sector

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II The Social Security Health Care System

• A. Social Security
• 1. The Social Security Act

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Social Security Act

• 6 original programs
• Old-Age Assistance
• Old-Age benefits
• Unemployment compensation
• Aid to Dependent Children for children with only
  one parent or living with relatives
• Maternal and Child welfare for poor mothers and
  children and disabled children
• Aid to the blind

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Social Security Act

• Changes and Amendements
• 1939 Benefit support for dependents of OASI
• 1956 Benefit for disabled workers
• 1965 Creation of mediaid
• 1972 Cost of living adjustments
• Creation of supplemental security income program
• 1983 Increase in retirement age
• 1996 Replacement of ADC by TANF
• 2000 Elimination of earning limits for senior
  citizens

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Your social security statement

• Table of the worker's lifetime earnings record
• Reporting for each year the earnings amount that
  has been subject to Social Security and Medicare
  taxes.
• A career summary of estimated taxes paid by the
  worker and his or her employer for Social
  Security and Medicare

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Jo Anne B. BarnhartCommissionner
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Social Security Administration (SSA)

• Deputy Commissionner
• James B. Lockhart III
• 5 Deputy Commissionners
• Communications
• Human Resources
• Operations
• Policy
• Systems

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Evolution of the SSA

• Social Security Board 1935
• Federal Security Agency 1939
• Social Security Administration 1946
• Division of the Health, Education, Welfare
  Department 1953
• Department of Health and Human Services 1980
• Social Security Administration - 1995

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Welfare Programs

• Old-Age, Survivors and Disability Insurance
  (OASDI)
• Supplementary Security Income

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OASDI

• Benefits for 3 groups
• Retirees
• Disabled or Families
• Survivors

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How does Social Security function? How is it
financed?

• Social Security (OASDI) an earned benefit
  insurance program
• Social Security provides
• retirement or early retirement benefits for the
  workers
• benefits to workers, their spouses, and their
  dependents
• survivorship benefits to family members of
  workers who have died
• disability benefits to workers who become
  disabled before retirement
• Conditions
• To be eligible for retirement benefits a
  worker needs to contribute for 10 years and if he
  has reached the normal retirement age, which is
  currently 65. He earns credits that count toward
  eligibility for the future social security
  benefits.

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• In the US
• no legally enforceable right to Social
  Security benefits
• Contributions to Social Security are based on
• a worker's earnings and on the number of
  years a worker has contributed to the program
• Social Security redistributes income from high
  lifetime earners to low lifetime earners
• 2002 Average monthly retirement benefits 895
• 2002 Average monthly retirement benefit for
  men 1,008.10
• 2002 Average monthly retirement benefit for
  women 773.90
• At the end of December 2003, Social Security
  provided monthly benefits to 47 million
  beneficiaries (or one in every 6 Americans),
  which represents 471 billion

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What are The Social Security finances?

• To pay for benefits, Social Security receives
  income from three sources
• ? Payroll taxes
• (employees and employer each pay 6.2 to
  Social Security)
• ? Interests of the trust fund
• ? Taxes on Social Security benefits are subject

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Budget of the United States
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B. Health Care

• Administrative Agency
• - The United States Department of Health and
  Human Services

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Headquarters Hubert Humphery B Building,
Washington
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Secretary of Health and Human Services

• Mike Leavitt
• Secretary

Alex Michel Azar II Deputy Secretary
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Department of Health Human Services
Organizational Chart
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Administration for Children and Families

• Responsible for 60 federal programs (TANF
  included) that promote the economic and social
  well-being of families, children, individuals,
  and communities.

WADE F. HORN Assistant Secretary
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Health Care Financing Agency

• New Structure
• Centers for Medicare and Mediaid Services
  (CMS)
• Centre for Medicare Management
• Centre for Beneficiary Choices
• Centre for Medicaid and State Operations
• Administrator
• Mark B. McClellan

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• Beneficiaries
• Aged 65 and above
• Permanent kidney failure patients
• Under 65 with disabilities

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Medicare

• Part A Hospital Insurance
• Part B Medical Insurance (emergency, laboratory
  tests)
• Part D Prescription/Medication

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Modernization Act of 2003

• Beneficiaries with income less than 150 poverty
  level now eligible
• Medicare Advantage Program to replace Medicare
  Choice
• New outpatient prescription drug benefit

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Race/Ethnicity Distribution of Medicare
Beneficiaries, 2000
Minority beneficiaries are disproportionately
represented among the disabled.
Elderly
Disabled
Other 3.8
Other 4.7
Hispanic 6.5
Hispanic 10.1
Black non-Hispanic 8.1
Black non-Hispanic 17.1
White non-Hispanic 81.6
White non-Hispanic 68.1
Total 35.2 Million
Total 5.5 Million
Source CMS, Office of Research, Development,
and Information Data from the Medicare Current
Beneficiary Survey (MCBS) 2000 Access to Care
Files.
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Medicaid

• Beneficiaries
• Low income individuals and families who fit into
  eligibility group recognized by Federal and State
  law

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Medicaid

• Broad national guidelines by Federal Govt
• States determine
• - Eligibility standards
• - Type, amount, duration and scope of
  services
• - Rate of payment of services
• - Administers its own program

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Eligibility Factors

• Age
• Prgenancy
• Disability
• Blindness

• Income
• Resources
• Citizenship
• Immigration Status

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Mandatory Medicaid Benefits

• Inpatient hospital (excluding inpatient hospital
  services for mental illness)
• Outpatient hospital including Federally Qualified
  Health Centers (FQHC)
• Physician
• Laboratory and x-ray
• Certified Pediatric and Family Nurse Practitioner
• Early and Periodic Screening, Diagnosis and
  Treatment (EPSDT) for individuals under age 21
• Family planning services and supplies
• Pregnancy-related services
• Nursing facility services for those 21 and older
• Medical supplies and surgical services of a
  dentist

Source CMS/Center for Medicaid and State
Operations publication, Medicaid At-a-Glance
2002 A Medicaid Information Source.
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STATE CHILDRENS HEALTH INSURANCE PROGRAM (SCHIP)

• Beneficiaries
• Children
• (5 million children covered)

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Types of SCHIP Programs Separate, Medicaid
Expansion and Combination
Seventeen states have combination1 SCHIP programs
as of March 2004.
WA
ME
NH
VT
MT
ND
MN
OR
WI
NY
MA
ID
SD
MI
RI (Combination)
WY
CT
PA
NJ
IA
OH
NE
DE
NV
IN
IL
MD
WV
UT
VA
DC (Medicaid Expansion)
CO
CA
KS
MO
KY
NC
TN
OK
AR
SC
NM
AZ
AL
GA
MS
TX
LA
FL
AK
Combination 19 states
HI
Medicaid Expansion Program (M-SCHIP) 13 states
District of Columbia
Separate Program (S-SCHIP) 18 states
Note (1) Combination SCHIP programs refer to
states with both Medicaid expansion SCHIP and
separate SCHIP. Source www.cms.hhs.gov.
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Health care and the private sector in the United
States

• Major source of providing health care cover is by
  private insurance
• Group insurance health insurance through
  the jobs.
• In many cases, the employer pays part or all
  of the cost.
• Individual insurance If your employer does not
  offer group insurance, or if the insurance
  offered is very limited, you can buy an
  individual policy.

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Fee-for-Service, HMOs, PPOs

• Fee-for-Service
• Traditional kind of health care policy
• Insurance companies pay fees for the services
  provided to the insured people covered by the
  policy
• most choices of doctors and hospitals
• Health Maintenance Organizations (HMOs)
• Prepaid health plans
• Members pay a monthly premium
• HMO provides comprehensive care for member and
  its family
• You must use the doctors and hospitals designated
  by the HMO
• Problem very variable in its coverage
• Preferred Provider Organizations (PPOs)
• Combination of traditional fee-for-service and an
  HMO
• Limited number of doctors and hospitals to choose
  from.

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• Other insurance forms
• . Medigap or MediSupp
• . Long-term care
• . specific policies

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III- THE WELFARE SYSTEM IN CRISIS
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Current situation

• Problems
• The United States is sometimes described as a
  liberal welfare regime
• In 2000, public and private expenditures on
  health care were 1.3 trillion, representing 13.2
  of the Gross Domestic Product (GDP)
• By 2011, health care spending is expected to
  reach 17 of U.S. GDP.

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The unprecedented growth rates are affected by
many factors

• - increased use of the health care system
• the general price inflation
• price inflation of specific medical services
• aging of the population

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2) Inequalities in Social Security coverage

• The uninsured are the most affected by these
  inequalities
• nearly 45.8 million Americans in 2004 uninsured
• Consequences of expensive costs
• . significant change in the life of the
  uninsured
• . bankruptcy
• 28 of adults unable to pay for some form of
  medical care in the past year

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Those being able to afford health care
insurance are also concerned by the crisis

• Dissatisfaction with the American health care
  system is rising in every social class
• 62 of those struggling to pay medical bills have
  health insurance

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Reasons that can explain the rising costs of
Social Security

• The cost of health care is going up much faster
  than peoples wages
• Social Security will be unable to pay full
  benefits in 2041
• The health care system is riddled with
• - inefficiencies
• - excessive administrative expenses
• - inflated prices
• - poor and complex management
• - inappropriate care
• - waste and fraud

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B. The need for reform

• The presidential proposals
• Bill Clintons attempt and failure in reforming
  the system
• In his 1992 presidential campaign, PresidentBill
  Clinton's administration proposed to provide
  universal health care for all Americans
• Strong critics from opponents such as health
  insurers, the drug companies and the doctors

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President Georges W. Bushs proposals

• According to him, the status quo is unsustainable
  in the long run and will go "bankrupt" in 2041
  without changes
• He has proposed overhauling Social Security by
  allowing private investment accounts and indexing
  benefit increases to changes in consumer prices,
  rather than wages

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2) Other alternatives

• Increasing payroll taxes
• Decreasing benefits
• Using general revenues
• Prefunding future benefits through either
  personal savings accounts or direct investments
  of the trust funds