Ing. Tomáš Dudáš, PhD.

WELFARE REGIME TYPES

CORPORATIST SOCIAL-DEMOCRATIC LIBERAL

Basic Principle Solidarity Mutual responsibility is shared through social networks. Welfare is based on individual contribution. Those not belonging are excluded.

InstitutionalNeed is accepted as a normal part of social life that should be addressed through institutions. Welfare is provided for the population as a whole, i.e. is universalist.

Residualist Welfare is a safety net for the poor.

Representative Countries

France Based on Solidarity

Germany Social Market

UKInstitutional Welfare State

SwedenInstitutional-redistributive

USPluralist in Practice, Liberal in Ideology

Solidarity

Inclusion of the excluded

Social state

Corporatism

Subsidiarity

Minimum standards

Social protection

Best services possible

Broad social provision

Egalitarianism

Individualism

Laissez-faire Residualism

Punitive view of poverty

American Welfare State

An outline of the American welfare stateSocial welfare in the United States is provided

by a complex mix of programs.The programs are diverse and generally

supported by the public, though some remain controversial and unpopular.

American Welfare StateTypes of programs

Distinctions can be made based on methods of dispensing benefits. Social insurance programs Means-tested programs

Some welfare state programs are entitlement programs. Payments made automatically to people who meet

eligibility requirements Debate about controlling entitlements as the way to

gain control over the federal budget.

Welfare in the colonial eraTreatment of the poor in colonial America

was based on the principles set forth in the Elizabethan poor law of 1601

Each town or parish was responsible for the care of its own needythose who were unable to work due to sickness

or age, who were to be given material aidthe able-bodied who were unable to find jobs,

who were to be provided with workthe able-bodied but unwilling to work, who

were to be instilled with the work ethic

Nineteenth Century AmericaThe state governments provided little in terms of

social welfare programs; the federal government provided none at all.

Industrialization causes a reduction in self-sufficiency.

Political pressure to establish government programs - the Progressive Era

Real change would come as a result of the Great Depression during the 1930s.

Social Security Act of 1935The beginning of the permanent welfare

state in America.The act consisted of three main

components:1). Old-age insurance2). Public assistance for the needy, aged,

blind, and families with dependant children (other disabilities added later).

3). Unemployment insurance and compensation.

Old-age insurance - Social Security.Originally funded by a payroll tax, collected from

the employer, equal to one percent from both employee and employer (higher tax rate now).

Benefits were paid to retirees from the beginning of the program; to recipients who had not contributed.

OASDI : Old Age, Survivors, and Disability Insurance.

FICA : Federal Insurance Contributions Act

Assistance for the needy, adult blind, and adult disabled.The Social Security Act provided federal matching

funds to assist state programs to assist these groups.

A 1974 law established the Supplemental Security Income program.

SSI is administered by the Social Security Administration but is funded by general revenues.

It does not limit blind and disabled assistance to adults.

Unemployment InsuranceThe Social Security Act established

a three percent payroll tax charged to employers to fund the unemployment insurance program.

While receiving benefits unemployed workers must actively seek employment (yeah, right).

Benefits the laid-off worker and the economy as a whole. The unemployed still have some spending power.

Kaiser Family Foundation, statehealthfacts.org - “Health Insurance Coverage of the Total Population, U.S. (2007)”

United States: Health Insurance Coverage of Total Population, U.S. (2007)

Employer-Based and Individual

• 53% - Employer-based, 5% individual-purchased– Dependants/spouses– Government employees included

• Most will have DIFFERENT plan in 2 years– Little incentive to care for individual’s long-term health

since will probably be insured by someone different in near future.

• Avg. monthly premium – geographic variation– Single - $~150.00– Family - $~280.00“Update on Individual Health Coverage - Updated” (#7133-02), The Henry J. Kaiser Family Foundation,

Aug 2004

Medicare: Health Care for the AgedMedicare covers persons receiving Social Security

and has two components:Part A covers everyone when they reach age 65;

covers hospitalization, some skilled nursing and home health services. Recipients must pay for the first $700 in costs.

Part B is optional; it covers additional services with the costs shared by the system and the recipient.

A prescription drug program was added in 2004.Costs of Medicare have increased from $2.5 billion

in 1965 to $250 billion in 2004.Financed now by a 1.45 percent payroll tax;

employer matched.

Medicaid: Health Care for the PoorProvides hospitalization, prescription drugs,

long-term nursing home care (unlike Medicare) to all who qualify for TANF (more on that later) and SSI

Eligibility has been broadened several times since the program began.

Jointly financed by state and national governments.

The Uninsured• Over 45 million in 2007• Coverage = services. No coverage =

no services.

• “But can’t they just buy insurance?” ??– Employer size as predictor – Large firm – 98% offer

coverage, small firm – 59%– 8/10 come from working families– Price sensitive to premiums AND utilization

• When price goes up, people decreasingly use that resource. People get sicker and sicker before their medical problems are addressed.

Health Care and Education Reconciliation Act of 2010

First year Insurance companies will be barred from dropping people from coverage

when they get sick. Lifetime coverage limits will be eliminated and annual limits are to be restricted.

Insurers will be barred from excluding children for coverage because of pre-existing conditions.

Young adults will be able to stay on their parents' health plans until the age of 26. Many health plans currently drop dependents from coverage when they turn 19 or finish college.

Uninsured adults with pre-existing conditions will be able to obtain health coverage through a new program that will expire once new insurance exchanges begin operating in 2014.

A temporary reinsurance program is created to help companies maintain health coverage for early retirees between the ages of 55 and 64. This also expires in 2014.

Health Care and Education Reconciliation Act of 2010

In 2014:

State health insurance exchanges for small businesses and individuals open.

Most people will be required to obtain health insurance coverage or pay a fine if they don't. Healthcare tax credits become available to help people with incomes up to 400 per cent of poverty purchase coverage on the exchange.

Health plans no longer can exclude people from coverage due to pre-existing conditions.

Employers with 50 or more workers who do not offer coverage face a fine of $2,000 for each employee if any worker receives subsidized insurance on the exchange. The first 30 employees aren't counted for the fine.