5.5 Social Insurance Programs
Social insurance programs differ from social welfare programs in that they take into account any contributions that the beneficiary has made to the program. These programs may be considered more preventative in nature than social welfare programs.
Social Security Disability Insurance
Social Security Disability Insurance (SSDI) covers individuals who have worked enough years to qualify for Social Security payments if they become disabled with a condition that “is expected to last at least one year or result in death” (Social Security Administration, 2014, p. 4). Since this is not a public assistance program, applicants do not need to pass a means test. Benefits can also extend to some family members. After receiving SSDI benefits for two years, the recipient automatically becomes eligible for Medicaid benefits as well. (Social Security Administration, 2014).
Medicare
Medicare is a program funded by tax revenues that provides financial assistance for medical care for the nation’s elderly, retired, and some people with disabilities, as shown in figure 5.7. Much more complex than Medicaid, Medicare’s benefits come in various forms (Part A, Part B, Part C, Part D). Part A (inpatient hospital coverage) is free, with the remaining optional components requiring the payment of a premium. Medicare is addressed in greater depth in Chapter 8.
Social Security
Old-Age, Survivors, and Disability Insurance (OASDI) is the formal name for the program we more typically call Social Security. It provides an income to “qualified retired and disabled workers and their dependents and to survivors of insured workers” (Social Security Administration, 2011). Over 50 million Americans receive benefits, including more than 85% of those aged 65 or older (Social Security Administration, 2011). Although it was never designed to be the primary source of income for the elderly, it is at least 90% of the income for 22% of married couples, and 43% of the income for other individuals aged 65 or older (Social Security Administration, 2011).
There is some concern about the long-term viability of Social Security due to the increasing average age and life expectancy of Americans, coupled with the trend of companies encouraging older workers to go into early retirement (Baker & Weisbrot, 1999). Some people will see little return on their Social Security tax payments, while others will draw much more out of the system than they put into it. The maximum monthly benefit payable to a retired worker in 2021 was $3,148, but they could only collect that much if they had earned $142,800 or more each year over a 35-year working career. The average retiree’s monthly Social Security payment in 2021 was $1,543 per month (Brandon, 2021). Social Security will be discussed more in depth in Chapter 7.
Unemployment Insurance
Unemployment insurance (UI) is aimed at preventing recently unemployed workers from slipping into economic despair while they search for a new job. Ther