Social Insurance: Holes in the Safety Net

This article is part of an opinion editorial series on topics under the umbrella of Social Insurance. Topics have been chosen based on common gaps in knowledge of Social Insurance.

Part 1 of this series is on the topic of the social safety net and some groups that fall through its holes.

The social safety net is woven by a collection of government-provided services in place to prevent citizen poverty. Some politicians have called the social safety net a “hammock”, remarking the program is so well financed that “lazy”, able-bodied citizens take advantage of it and swing comfortably in its netting. However, the phrase “social safety net” in the United States is not a misnomer; far from a hammock, the net it is full of holes that entire groups of people fall through.

Some of those that are disabled, those that live below the 138% federal poverty level (FPL), and those in residual poverty.

The Disabled

Medicare is available to American citizens who have worked and paid into the system through payroll taxes. People are eligible for Medicare upon reaching age 65 or becoming “adjudicated disabled”; it is the premier government-provided, national health insurance program. The key word in the phrasing of the eligibility is “adjudicated”.

To be deemed legally disabled and qualify to receive Medicare before the age of 65, one must sit in front of a panel of Social Security administrators and have their disability appraised. It should be noted that those with disabilities not immediately apparent or “invisible” disabilities (eg, traumatic brain injury, epilepsy, PTSD) as compared to those with physical handicaps are at a greater disadvantage due to the stigma around what disability looks like. The application process takes on average 3 attempts over 3 years before one is legally deemed disabled and qualifies for Medicare. This time is crucial for those who need immediate and continued medical care, like surgery or chemotherapy. Luckily, there are two fast-track processes, Quick Disability Determination (QDD) and Compassionate Allowance (CAL), in place to expedite the application process for people with sudden, terminal illness (eg, stage IV cancers).

Yet, even if one passes these steep hurdles and becomes “adjudicated” disabled, it takes a minimum, mandated “24-month qualifying period” before Medicare recipient can receive their first Medicare payment as part of this “fast-track” process. This 24-month clause is designed to keep “costs down” and was passed with bipartisan support. The legislation cuts costs by reducing Medicare spending on patients with poor prognosis who likely won’t be alive to receive Medicare payments 24-months later.

The application pipeline for those for disability applying for Medicare must be mended by truly fast-tracking the process and eradicating the tightfisted, 24-month qualifying period.

Those subsisting below 138% of the FPL

Most of the programs that make up the social safety net are only available to citizens who live on a household income at or below 138% of the FPL. Meeting the income qualification in itself is difficult since it is based on one’s pre-tax income and on simple household size (ie, an adult with income is seen the same as a newborn). This number is calculated without taking debt (eg, student loans) into account or cost of living adjustments for different geographic areas, and thereby not accurately reflecting overall wealth of an individual.

The main issue with any public benefit program that has a threshold limiting qualification like the FPL is that the threshold creates a “benefit cliff”. This abrupt and complete cut off in qualification for aid keeps families from steadily moving beyond the 138% FPL. If a beneficiary was offered a $2.00 raise at their job, why would they take it if it pushes their family outside of the 138% FPL, disqualifying them from financial aid for food, housing, and healthcare provided by the social safety net?

Those living in prolonged poverty

4 out of 5 Americans will face poverty in their lifetime. This commonly cited figure refers to transitional poverty, which represents poverty that is short-term as a person is briefly unemployed. However, for some Americans, poverty is ingrained and makes the social safety net ineffective.

Residual poverty occurs when individuals are born poor and remain poor (eg, intergenerational). They experience limited opportunities due to an insufficient education, lack of contacts that can aid in pulling them out of poverty, and often impaired physical or mental health. Studies have shown that giving those in residual poverty extensive financial education followed by providing them a more livable wage did not alleviate the poverty problem. These people quickly begin to live as though they are still in poverty, because this is the only mindset those in residual poverty are experienced in.

The US’ social safety net needs to be made of more than just dollars; social programs are needed that mend the psychological strains of intergenerational poverty.

Moving Forward

Whether politicians think the social safety net is so robust that is it being taken advantage of or they think it is rightfully catching citizens down on their luck in its net, politicians on both sides of the aisle gravely overestimate the breadth of the US’ social safety net. Thousands of citizens are slipping through the holes of this poverty safeguard or become trapped in its netting every year. Unlike single-mothers, groups that don’t invoke sympathy in the general public, such as refugees and ex-convicts, are rarely brought up by politicians. However, there are even more groups not reaching the headlines, including the disabled, those subsisting below 138% of the FPL, and those in residual poverty. Let’s mend these community-sized holes in the safety net. Hopefully, we then will be able to replace this net with a safety blanket and thereby able to prevent citizens from needing a net to catch them at all.

 

 

Screen Shot 2018-03-31 at 1.51.09 PMMadelaine Wendzik currently serves as an Associate Editor for the News and Policy Team at Athens Science Observer and is a Ph.D. student in the Neuroscience Program at the University of Georgia studying neuroinflammation and immune response in pediatric traumatic brain injury. She enjoys board games, downloading one too many podcasts, and anything to do with white chocolate macadamia nut cookies. You can email her at MWendzik@uga.edu or follow her on twitter @SciPolicyGirl. More from Madelaine Wendzik.