A3. Social Welfare Programs

  Summary of contents in textbook

The major US social welfare programs can be classified into two types: social insurance and public assistance.

Social insurance is a government-backed guarantee against loss by individuals. Beneficiaries must have made contributions to the programs before they get benefits regardless of their personal wealth.

  • Social Security, refers to the Old-Age, Survivors, and Disability Insurance(OASDI)program which is made up of Old Age and Survivors Insurance(OASI) and the Disability Insurance(DI), covering 94% of the US workforce.
  • Unemployment Compensationprovides benefits funded by joint federal and state unemployment taxes on employers to regularly employed workers who become involuntarily unemployed and who are able and willing to accept suitable employment.
  • Medicareconsists of four parts, including Hospital Insurance, Supplementary Medical Insurance, the Medical Advantage Program and part D which provides subsidized access to prescription drug insurance coverage on a voluntary basis for all beneficiaries upon payment of a premium.

Public Assistance is government aid to individuals who can prove that they are living in poverty(by official standards). Means test is required.

  • The Temporary Assistance for Needy Families(TANF) program is designed to help needy families achieve self-sufficiency.
  • The Supplementary Security Income(SSI)program provides monthly cash payments to the needy elderly, blind, and disable people.
  • Medicaidis a joint federal and state entitlement program that pays for medical assistance to low-income people.
  • Supplementary Nutrition Assistance(SNAP)program provides financial assistance for food purchasing so that low- and no-income people can have a minimal nutritious diet.



                                                              President Obama addressing Congress                                                                                                                                      regarding healthcare reform, September 9, 2009

                                                             The President and White House Staff react to                                                                                                                          the House of Representatives passing the bill                                                                                                                           on March 21, 2010

                                                          President Obama signing the Patient Protection                                                                                                                    and Affordable Care Act on March 23, 2010

                                                            Trump discussing with lawmakers on replacing                                                                                                                          the ACA at the White House, March 2017

  Supplementary readings

Event 1: Patient Protection and Affordable Care Act (Obamacare)

The Patient Protection and Affordable Care Act, often shortened to the Affordable Care Act (ACA) and nicknamed Obamacare, is a United States federal statute enacted by the 111th United States Congress and signed into law by President Barack Obama on March 23, 2010.

The Affordable Care Act was designed to increase health insurance quality and affordability, lower the uninsured rate by expanding insurance coverage and reduce the costs of healthcare. It introduced mechanisms including mandates, subsidies, and insurance exchanges. The law requires insurers to accept all applicants, cover a specific list of conditions and charge the same rates regardless of pre-existing conditions or sex.


In June, uninsured people with pre-existing conditions can get high-risk fund from federal government.

In July, the Pre-Existing Condition Insurance Plan (PCIP) took effect to people who cannot get insurance from private insurance companies because of pre-existing condition.


Insurers cannot continue to market child-only policies in 17 states.


On June 28, 2012, the Supreme Court ruled that the individual mandate was constitutional when the associated penalties were construed as a tax.


In January 2013 the Internal Revenue Service ruled that the cost of covering only the individual employee would be considered in determining whether the cost of coverage exceeded 9.5% of income. Family plans would not be considered even if the cost was above the 9.5% income threshold.


Health care spending by the middle class was 8.9%.


The average price of non-generic drugs rose 16.2%.


11.1 million people had purchased exchange plans, while an estimated 9 million to 10 million people had gained Medicaid coverage, mostly low-income adults.


Event 2: American Health Care Act of 2017 (Trumpcare)

American Health Care Act of 2017 is a United States Congress Bill to repeal to the Patient Protection and Affordable Care Act (ACA) which was signed by Obama. It is based on a plan first publicly released by House Republicans on March 6, 2017.

The AHCA repeals the parts of the Affordable Care Act within the scope of the federal budget, including provisions contained within the Internal Revenue Code such as the individual and employer mandates and various taxes, and also modifications to the federal Medicaid program.

March 24, 2017

Consideration of the bill was postponed but it failed to gain sufficient Republican support to pass it.

The end of April, 2017

Republicans began to trying to revive the bill.

May 4, 2017

The United States House of Representatives voted in favor of repealing the Patient Protection and Affordable Care Act and passing the American Health Care Act with a narrow vote of 217 to 213, sending the bill to the Senate for deliberation.

  Useful websites


Who’s on Welfare? 9 Shocking Stats About Public Assistance


Patient Protection and Affordable Care Act (Obamacare)

American Health Care Act of 2017