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Chapter 19
DOMESTIC
POLICY
Providing Affordable
Health Care for All

Health care a central theme of Barack Obama's presidential
campaign
 About 16 percent of U.S. 2007 GDP spent on health
care ($8,000 per person/$4,000 per person in the
second highest nation)
 Health care costs doubled every decade for the last 30
years
 Over 60 percent of all personal bankruptcies due to
medical costs
 2012 50 million Americans lacked insurance
 Many denied due to arbitrary definition of pre-existing
condition
 47,000 deaths per year due to consequences of lack
of insurance
 Ranked 37th in the world in outcomes
2
Health Care
U.S. only major industrialized nation
without universal health care (Germany
first in 1870s)
 Many programs exist, providing a
patchwork quilt of care

 Medicare-elderly 1960s
 Medicaid-poor
1960s
 Children’s Health Insurance Program
(SCHIP) And now, President Obama’s health care bill
3
Many parts of the program founded in
Republican ideas
 Teddy
Roosevelt calls for major
reform
 Richard Nixon Comprehensive Health
Care Program
 Individual mandate-Newt Gingrich
and the Heritage Foundation
 Medicare Part D-Prescription
medication George W. Bush
4
Domestic Policy Making

More than half of government expenditures
made on Social Security, health care, education,
and immigration
 Many designed to address economic inequality
 To evaluate, must address questions involving
conflicts between freedom and order and
freedom and equality
 State and local governments must also have
capacity to carry out national programs
5
The Development of the
American Welfare State
 Most
controversial purpose of
government promotion of social and
economic equality
 Conflict between freedom and equality
 Most modern nations welfare states
 Social
welfare policy based on
concept governments should provide
for basic needs of members
6
A Human Tragedy
7
The Great Depression

Initiatives related to the New Deal and the
Great Society dominated national policy
until reforms in 1980s and 1990s
 Extended protective role of government

The Great Depression longest and deepest
setback of U.S. economy in history
 Began with stock market crash Oct. 24th,
1929 and ended with start of WWII
 One in four workers unemployed; more
underemployed
8
The New Deal
 Franklin Delano Roosevelt, accepting
nomination at Democratic Presidential
Convention:
“I pledge you, I pledge myself to a new deal
for the American people.”
 Were programs imaginative public policy
or source of massive government growth
without matching benefits?
9
The New Deal’s Two Phases
 First
phase aimed at boosting prices
and lowering unemployment
 Civilian Conservation Corps (CCC)
 Second
phase aimed at aiding
“forgotten people”
 Social Security program
 Despite
programs, poverty and
unemployment persisted until WWII
10
The Great Society
 President
Lyndon B. Johnson reelected in 1964 with landslide
 Used support to promote Great Society
programs to combat political, social, and
economic inequalities
 Vital
element was War on Poverty
 Economic Opportunity Act (1964)
designed to end poverty in 10 years
 A hand up, not a handout
11
Retrenchment and Reform
 Despite
Great Society’s programs,
poverty declined but did not disappear
 Ronald Reagan used presidency in
early to mid 1980s to re-examine
social welfare policy
 Shifted focus from economic equality to
economic freedom
 Questioned whether government alone
should look after less fortunate
12
Retrenchment and Reform
 President Bill Clinton’s proposals aimed
at reforming system while protecting
basic fabric of safety net
 President George W. Bush’s
administration greatly expanded welfare
benefits for seniors with Medicare drug
program
13
Social Security
 Government social insurance
programs
protect individuals from various kinds of
loss, regardless of need
 First example was workers’ compensation
 Social security and Medicare also social
insurance programs
 These programs examples of entitlements
14
Origins of Social Security
 Social insurance programs began in
Europe as early as 1883
 In U.S., needs of elderly and unemployed
left to private organizations and
individuals until Great Depression
 In 1935, President Roosevelt signed
Social Security Act
15
Social Security Act
 Act had three approaches:
 Social insurance for elderly and disabled,
and unemployment benefits
 Grants-in-aid to the states to help destitute
 Federal aid to the states to provide health
and welfare services
16
How Social Security Works

Most people think of retirement benefits
when thinking of Social Security
 Program provides other services

Contributions not set aside for individuals
but used to fund “pay as you go” system
 Program began with more paying into fund
than taking out (nine workers to one
beneficiary)
 Today’s program closer to three workers for
each beneficiary
17
Will Social Security
Remain Solvent?
Baby boomers begin to retire in 2010
 Current projections show fund exhausted
by 2037

 Politicians face dilemma: lower benefits or
raise taxes to fund program?

Current workers’ benefits will be paid by
future participants
 Solvency depends on growth of base
 What happens when birthrate falls,
unemployment rises, mortality declines, and/or
economy falters?
18
Figure 19.1
Day of Reckoning
19
Census Data
49.9 million, or 16.2 percent, of
Americans live in poverty
 15 million children live in poverty
 9.4 percent of people over 65 live in
poverty (1954 35% lived in poverty,
reduction largely due to Social Security
benefits.
 One in two poor Americans live in a
family with a woman head of household

20
Figure 19.2
The Feminization of Poverty
21
Welfare Reform

Original poverty programs lacked work
incentives
 A 1994 poll showed 59 percent of Americans
believed welfare recipients taking advantage of
system

Personal Responsibility and Opportunity to
Work Act reforms enacted in 1996
 Designed to “end welfare as we know it”
 Abolished Aid to Families with Dependent
Children (AFDC)
 Replaced AFDC with Temporary Assistance to
Needy Families (TANF)
22
Figure 19.3
Families on Welfare, 1955-2008
23
Figure 19.4
Poverty in the States
24
Medicare

Social Security Act amended in 1965 to
include Medicare for those over 65
 National health insurance first proposed by
President Truman in 1945

Medicare program had Four components:
 Part A for hospitalization
 Part B for physician’s fees
 Medicare + Choice Part C
 Part D-Prescription drug plan
25
Medicaid
 Participants
fall into four groups:
 Children under age 21 (29.8 million, or
48 percent in 2008)
 Adults (5 million)
 Blind and disabled (6 million)
 Aged who are also poor (6.1 million)
 Last
two categories account for over
half of Medicaid expenditures
26
Health Care Reform

President Obama signed Patient Protection
and Affordable Care Act March 23, 2010
 Compromises required to balance goal of
equality of access with desire for freedom from
government intervention

Notable provisions in bill include protections
for coverage despite pre-existing conditions
and mandatory participation
 Bill includes subsidies and tax credits to help
individuals and small businesses pay for
coverage
27
Health Care Reform

Critics of bill concerned about cost – an
estimated $940 billion over 10 years
 Some, including Congressional Budget
Office, believe bill will pay for itself

Those wary of “big government” troubled
by additional regulations and
bureaucracy
 Is mandating individual coverage
Constitutional?

Others anxious about effect of reforms on
Medicare
28