|Portrait of the USA
The Social Safety Net
and health care
The American economic system is based on private, free
enterprise, and the "self-reliance" that writer and lecturer Ralph Waldo Emerson advocated is a virtue much valued by Americans. In fact, most make it a point of honor to take care of
themselves. But government help in many forms is available to those who are temporarily or permanently in need. This chapter examines two areas in which aid may be provided: public welfare and health care.
HISTORY OF PUBLIC ASSISTANCE
Traditionally in America, helping the poor was a matter for
private charity or local government. Arriving immigrants depended
mainly on predecessors from their homeland to help them start a
new life. In the late 19th and early 20th centuries, several
European nations instituted public-welfare programs. But such a
movement was slow to take hold in the United States because the
rapid pace of industrialization and the ready availability of
farmland seemed to confirm the belief that anyone who was willing
to work could find a job.
The Great Depression, which began in 1929, shattered that
belief. For the first time in history, substantial numbers of
Americans were out of work because of the widespread failures of
banks and businesses. President Herbert Hoover believed that
business, if left alone to operate without government
interference, would correct the economic conditions. In the
meantime, he relied on state and local governments to provide
relief to the needy, but those governments did not have enough
money to do so. Most Americans believed that Hoover did not do
enough to fight the Depression, and they elected Franklin D.
Roosevelt president in 1932.
Within days after taking office, Roosevelt proposed recovery
and reform legislation to the U.S. Congress. Congress approved
almost all the measures the president requested, and soon the
government was creating jobs for hundreds of thousands of people.
They were employed in huge public works projects such as dam
construction, road repair, renovation of public buildings,
building electrical systems for rural communities, and
conservation of natural areas.
Most of the programs started during the Depression era were
temporary relief measures, but one of the programs -- Social
Security -- has become an American institution. Paid for by
deductions from the paychecks of working people, Social Security
ensures that retired persons receive a modest monthly income and
also provides unemployment insurance, disability insurance, and
other assistance to those who need it. Social Security payments
to retired persons can start at age 62, but many wait until age
65, when the payments are slightly higher. Recently, there has
been concern that the Social Security fund may not have enough
money to fulfill its obligations in the 21st century, when the
population of elderly Americans is expected to increase
dramatically. Policy-makers have proposed various ways to make up
the anticipated deficit, but a long-term solution is still being
In the years since Roosevelt, other American presidents,
particularly Lyndon Johnson in the 1960s, have established
assistance programs. These include Medicaid and Medicare, which
are discussed later; food stamps, certificates that people can
use to purchase food; and public housing, which is built at
federal expense and made available to persons with low incomes.
Needy Americans can also turn to sources other than
government for help. A broad spectrum of private charities and
voluntary organizations is available. Volunteerism is on the rise
in the United States, especially among retired persons. It is
estimated that almost 50 percent of Americans over age 18 do
volunteer work, and nearly 75 percent of U.S. households
contribute money to charity.
AFFORDING THE AMERICAN WAY OF LIFE
The majority of Americans can live comfortable lives on the salaries they earn, without the support of a universal public-welfare system. These so-called middle-class Americans generally own their own homes and cars, spend some time each year on vacation, and can pay -- at least in part -- for a college education for their children. Most Americans set aside money in savings accounts to help pay major expenses; many invest in the stock market in hopes of earning a healthy return on their investments.
Most buy insurance, especially life and medical insurance,
frequently with contributions from the companies for which they
work. Many companies also have retirement plans by which they and
their employees put aside money for their retirement pensions.
When added to Social Security payments, pensions enable many
retired Americans to live comfortably. On the other hand, for
older Americans who require long-term care outside of a hospital,
a nursing home can be very expensive.
In 2000, a family of four with a yearly income of $17,603 or
less was considered poor by American standards; 11.3 percent of
American families fell into this category. In addition to the
benefits discussed above, many families below the poverty line
receive welfare payments, sums of money provided by the
government each month to those whose income is too low to obtain
such necessities as food, clothing, and shelter. The most common
form of welfare payment has been through a program called Aid to
Families With Dependent Children (AFDC). Originally designed to
help children whose fathers had died, AFDC evolved into the main
source of regular income for millions of poor American families.
The total cost of all federal assistance programs --
including Social Security, Medicare, Medicaid, and various
welfare programs -- accounts for nearly one-half of all money
spent by the federal government. That is a doubling of the
percentage that obtained in the 1960s.
THE DEBATE OVER WELFARE
Certain aspects of the American welfare system -- especially
AFDC payments -- came under criticism in the 1980s and 1990s, and
the system itself became an issue in national elections. Many
middle-class Americans resent the use of their tax dollars to support those whom they regard (rightly or wrongly) as unwilling to work. Some critics argue that dependency on welfare tends to become a permanent condition, as one generation follows another into the system. Some people believe the system encourages young women to have children out of wedlock, because welfare payments increase with each child born. Other experts maintain that unless the root causes of poverty -- lack of education and opportunity -- are addressed, the welfare system is all that stands between the poor and utter destitution.
The charge that social programs tend to trap the poor in
dependency and deny them the power to control their lives has led
to the redesign of certain federal programs. For example, the
government has been allowing tenants of public housing projects
to buy the buildings and take over their management.
A consensus in favor of more broad-gauged action came
together in 1996. A new law overhauled welfare by replacing AFDC
with the Temporary Assistance For Needy Families (TANF) Program, a system of state-run assistance programs financed by federal grants. The law also limits lifetime welfare assistance to five years, requires most able-bodied adults to work after two years on welfare, eliminates welfare benefits for legal immigrants who
have not become U.S. citizens, and limits food stamps to a period
of three months unless the recipients are working.
AMERICAN MEDICAL PRACTICE
Self-employed private physicians who charge a fee for each
visit by a patient have been the norm for American medical
practice. Most physicians have a contractual relationship with
one or more hospitals in their community. They refer their
patients as needed to the hospital, which usually charges
according to the number of days a patient stays and the
facilities -- X-rays, operating rooms, tests -- he or she uses.
Some hospitals are run by a city, a state, or, in the case of
hospitals for military veterans, the federal government. Others
are run by religious orders or other nonprofit groups. Still
others are run by companies intending to make a profit.
In the last 40 years, the cost of medical care in the United
States has skyrocketed. Health expenditures rose from $204 per
person in 1965 to $4,481 per person in 2000. One reason for
rising health costs is that physicians are among the highest-paid
professionals in the United States. As justification for their
high incomes, they cite the long and expensive preparation they
must undergo. Most potential doctors attend four years of
college, which can cost $25,000 a year, before going on to four
expensive years of medical school. By the time they have a
medical degree, many young doctors are deeply in debt. They still
face three to five years of residency in a hospital, where the
hours are long and the pay relatively low. Setting up a medical
practice can be costly too.
The new machines and technologies for diagnosing and
treating illness also are expensive, and the technicians who
operate them must be well-trained. Physicians and hospitals must
buy malpractice insurance to protect themselves against lawsuits
by patients who believe they have received inadequate care. The
rates charged for this insurance rose sharply during the 1970s
PAYING MEDICAL BILLS
The United States has evolved a mixed system of private and
public responsibility for health care. The vast majority of
Americans pay some portion of their medical bills through
insurance obtained at work. About five out of six American
workers, along with their families, are covered by group health
insurance plans, paid for either jointly by the employer and
employee or by the employee alone. Under the most common type of
plan, the employee pays a monthly premium, or fee. In return, the
insurance company pays a percentage of the employee's medical
costs above a small amount known as a deductible. Insurance plans
vary considerably. Some include coverage for dental work and
others for mental health counseling and therapy; others do not.
Another type of health care plan available to many workers
is the health maintenance organization (HMO). An HMO is staffed
by a group of physicians who provide all of a person's medical
care for a set fee paid in advance. HMOs emphasize preventive
care because the HMO must pay the bill when a person needs
services that the HMO cannot provide, such as specialized
treatment, surgery, or hospitalization. HMOs have grown in
popularity and are widely viewed as a means of holding down
medical costs. Some Americans, however, are wary of HMOs because
they limit the patient's freedom to choose his or her doctor.
Meanwhile, American physicians have helped slow the increase in costs by reassessing the need for hospitalization. Many surgical procedures that once involved staying in a hospital, for example, are now performed on an "out-patient" basis (the patient comes to the hospital for part of the day and returns home at night). The percentage of hospital surgeries performed on out-patients increased from 16 percent in 1980 to 55 percent in 1993.
Even when a hospital stay is prescribed, it is typically shorter than in the past.
MEDICAID AND MEDICARE
Although most Americans have some form of private health
insurance, some people cannot afford insurance. They can get
medical coverage through two social programs established in 1965.
Medicaid is a joint federal-state program that funds medical
care for the poor. The requirements for receiving Medicaid and
the scope of care available vary widely from state to state. At a
cost of about $200 thousand million a year, Medicaid is the
nation's largest social-welfare program.
Medicare, another form of federal health insurance, pays a
large part of the medical bills incurred by Americans who are 65
and older or who are disabled, regardless of age. Medicare is
financed by a portion of the Social Security tax, by premiums
paid by recipients, and by federal funds. Everyone who receives
Social Security payments is covered by Medicare.
One of the most troubling health care problems facing the
United States has been providing care for those who cannot afford
health insurance and who are not eligible for either Medicaid or
Medicare. It has been estimated that one in seven Americans is
without health insurance at least part of the year. They may be
persons who are unemployed or have jobs without medical coverage
or who live just above the poverty line. They can go to public
hospitals, where they will get treatment in an emergency, but
they often fail to obtain routine care that might prevent
In 1996 Congress passed legislation designed to make health insurance more available to working families and their children. The law expanded access to health insurance for workers who lose their jobs or who apply for insurance with a pre-existing medical condition, and it set up a pilot program of tax-deferred savings accounts for use in paying medical bills. President George W. Bush has proposed several ideas to make health care coverage more available and affordable, including the expansion of medical savings accounts and legislation that would make it easier for small employers to pool together to offer their employees better health coverage options.
Although health care costs continue to rise, the rate of
increase has leveled off in recent years. In 1990 health expenses
increased 9 percent over the previous year, and by 2000 that rate
had fallen to 4.6 percent.
PRINCIPLES OF TOLERANCE
America has been a fertile ground for new religions. The
Mormon and Christian Science Churches are perhaps the best-known
of the faiths that have sprung up on American soil. Because of
its tradition of noninterference in religious matters, the United
States has also provided a comfortable home for many small sects
from overseas. The Amish, for example, descendants of German
immigrants who reside mostly in Pennsylvania and neighboring
states, have lived simple lives, wearing plain clothes and
shunning modern technology, for generations.
Some small groups are considered to be religious cults
because they profess extremist beliefs and tend to glorify a
founding figure. As long as cults and their members abide by the
law, they are generally left alone. Religious prejudice is rare
in America, and interfaith meetings and cooperation are
The most controversial aspect of religion in the United
States today is probably its role in politics. In recent decades
some Americans have come to believe that separation of church and
state has been interpreted in ways hostile to religion. Religious
conservatives and fundamentalists have joined forces to become a
powerful political movement known as the Christian right. Among
their goals is to overturn, by law or constitutional amendment,
Supreme Court decisions allowing abortion and banning prayer in
While some groups openly demonstrate their religious
convictions, for most Americans religion is a personal matter not
usually discussed in everyday conversation. The vast majority
practice their faith quietly in whatever manner they choose -- as
members of one of the traditional religious denominations, as
participants in nondenominational congregations, or as
individuals who join no organized group. However Americans choose
to exercise their faith, they are a spiritual people. Nine out of
ten Americans express some religious preference, and
approximately 70 percent are members of religious congregations.