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Chapter Six Social Insurance - Coggle Diagram
Chapter Six Social Insurance
1.Social Insurance
A. Reasons for Social Insurance
To help solve social problems
To provide coverage for perils that are difficult to insure privately
To provide a base of economic security
B. Basic Characteristics of Social Insurance
Compulsory programs
Floor of income
Emphasis on social adequacy rather than individual equity
Benefits loosely related to earnings
Benefits prescribed by law
No means test
Full funding unnecessary
Financially self-supporting
2.Old Age, Survivors, and Disability Insurance (OASDI)
A, Covered Occupations
B. Determination of Insured Status
Fully insured
Currently insured
Disability insured
C. Types of Benefits
1.Retirement benefits—paid as monthly income to people who are fully insured and are at least age 62
a. Full retirement age
b. Early retirement age
c. Monthly retirement benefits
d. Delayed retirement credit
e. Automatic cost-of-living adjustment
f. Earnings test
2.survivor benefits—paid to the dependents of a fully or currently insured deceased worker
disability benefits—must be disability insured, meet a five-month waiting period, be unable to perform any substantially gainful activity, and have a condition that is expected to last at least 12 months or result in death
taxation of OASDI benefits
Financing Social Security benefits
D. Medicare benefits—available to most people age 65 or older, people who need kidney dialysis treatment or a kidney transplant, and disabled people under age 65 who have been entitled to OASDI disability benefits for at least 24 months
the Original Medicare Plan
a. Hospital Insurance (Medicare Part A)
b. Medical Insurance (Medicare Part B)
c. Financing of Medicare
d. Medicare financial crisis
Other Medicare Health Plans
Medicare Prescription Drug Plans (Part D)
a. Cost of prescription drug coverage
b. Financial help for low-income beneficiaries
c. Other provisions
5.Medigap Insurance
Medicare Advantage Plans (Part C)
a. Health maintenance organizations (HMOs)
b. Preferred provider organizations (PPOs)
c. Private fee-for-service plans (PFFS)
d. Special needs plans (SNP)
e. Medical savings accounts (MSA
3.problems and Issues
Long-Range OASDI Actuarial Deficit
Medicare Financial Crisis
impact of the Affordable Care Act on Medicare
5.Unemployment Insurance
A. Objectives of Unemployment Insurance
Provide cash income during short-term involuntary unemployment
Help unemployed workers find jobs
Encourage employers to stabilize employment
Help stabilize the economy by maintaining purchasing power
B. Coverage
Private firms
State and local governments
Agricultural firms under certain conditions
Domestic employment under certain conditions
C. Eligibility Requirements
Earn qualifying wages and employment
Be able to work and available for work
Actively seek work
Meet a one-week waiting period in most states
D. Benefits
benefit amount—varies with the worker’s past wages, within certain minimum and maximum amounts that vary by state
duration of benefits—regular benefits paid for a maximum of 26 weeks in virtually all jurisdictions
Extended benefits—up to 13 weeks of additional benefits in states with high unemployment
mergency Unemployment Compensation—temporary emergency programs that provided additional weeks of benefits to unemployed workers who have exhausted their regular state benefits.
E. Financing
Employers pay a payroll tax
Tax revenues go into a federal trust fund
Experience rating gives firms with favorable records lower tax rate
F.Problems and Issues
Small proportion receiving benefits
Inadequate financing
High exhaustion rates during recessions
6.Workers Compensation
A.Development of Workers Compensation
Common law stage
Employer liability laws
Workers compensation laws
B. Objectives of Workers Compensation
Broad coverage of employees for occupational injury and disease
Substantial protection against the loss of income
Sufficient medical care and rehabilitation services
Encouragement of safety
Reduction in litigation
C.Types of Laws (virtually all states have compulsory laws)
D. Employer’s Options in Complying with the Law
Buy a workers compensation policy from a private insurer
Qualify as a self-insurer
Buy insurance from a competitive or monopolistic state fund
E. Covered Occupations
Most occupations covered
Exemptions in some states: small employers
Excluded occupations or less than complete coverage: farm workers, domestic workers, and casual workers
F.Eligibility Requirements
Work in a covered occupation
njury or disease must be job-related
G.Types of Benefits
Unlimited medical care
Disability income benefits
Death benefits
Rehabilitation services
H.Second Injury Funds in Some States
I, Problems and Issues
Rising share of medical costs to total benefits
Fraud and abuse
Workers compensation costs and an aging work force