Not all. Check out whole life, which can have a cash value.
Well that’s if you live beyond their actuarialy determined assumptions. If you live to the point that they are making payments to you while you are living, the insurance company has made it’s return off your premium and then some.
To elaborate a little, this actuarial table for 2007 from the Social Security web site shows that a person reaching minimum retirement benefits age of 62 years old in 2007 could expect to live, and recieve benefits for about 22 more years.
This is a significant amount of cash to be provided. So that is where the push to raise the age qualification comes from.
A very basic summary:
Medicare: This is a federally-funded health insurance program for those over the age of 65. There is a 2.9% payroll tax applied to workers to pay for it. Medicare recipients still have to contribute certain amounts for premiums, and sometimes still have maintain separate health insurance plans to cover a small part of their costs, but the program usually pays for at least 80% of their hospital and other medical expenses if they get sick.
Medicaid: This is a social protection program to provide healthcare for the very poor, or relatively poor and disabled. It’s partly funded by the federal government through federal taxes, and partly by the states through state taxes. If an individual is eligible for the program it pays for most of their healthcare costs.
Social Security: There are a number of programs that were passed under the Social Security Act 1935, but the main one is retirement insurance benefits (pensions). These benefits are paid for with through their own specific payroll taxes, which are held in trust funds. The level of payments made to recipients is calculated according to a set formula. The problem is that in 20-30 years time, the formula will be paying out much more money to recipients each year than it’s taking in through the payroll taxes.
And to answer your question, “how are they entitlement programs if the recipients paid for them?”, the definition of an entitlement program is one that recipients, if they are eligible, are automatically entitled to by law. It doesn’t matter if they helped pay for it or not - if they’re entitled to it by law purely on the grounds that they meet the eligibility criteria, it’s an entitlement program. In common language it carries the connotation of a government handout to people who haven’t paid for it, but that’s not the actual definition.
No, you were correct to begin with. The Social Security is a totally separate deduction just for the insurance. Many of us like to call it a tax to remind ourselves how much we hate socialism.
American confusion about the word “entitlement” is rather inexplicable to me. I’ve not actually looked in a dictionary but I thought it meant something one is entitled to, such as insurance payouts when our premiums are paid up.
If you think Social Security is confusing, wait until someone explains Medicare.
Wage earners, beginning at age 21, pay FICA taxes (federal insurance contribution act) which is the money paid into Social Security. (It is not actually insurance, as it would be unconstitutional, as the federal government is not authorized to issue insurace. SCOTUS has upheld this tax, but held that it is not insurance.)
One can start drawing SS at age 62 (early retirement) at a deduction of 5/9% a month from what his full retirement benefit would be - which is currently age 66 but is being increased incrementally every month until age 67 is reached. One does not have to take his benefit upon reaching full retirement, but can defer until age 70, with increased benefits of 5/9% a month. Although full retirement age is now 66, you can start getting Medicare at age 65. There’s talk about raising that to sync with full retirement, which seems sensible to me. However, to get early retirement benefits without additional deductions, you must be retired. If you are still gainfully employed, offsets will be applicable. You do not have to be retired to get full retirement benefits.
Medicare Part A requires no additional payments from a beneficiary, but it covers only hospital insurance benefits and some appurtenant care, and if so entitled under the provisions of the Medicare Act, home care and skilled nursing care. It does not cover physicians’ fees, which are covered by Part B, but this part requires an additional premium (currently about $100 a month, I believe). Part B also covers many other things not covered by Part A, such as durable medical equipment.
There are limitations on the number of days of hospitalization and there are deductibls and coinsurance amounts. Part B is also called supplementary medical insurance benefits (not to be confused with supplemental medical insurance). Part B covers physicians’ services, outpatient services, diagnostic tests, therapy, home health agencies, durable medical equipment, etc.
Usually, a retiree will also buy supplement medical insurance to cover deductibles and expenses which exceed the amounts allowed by Medicare.
To return to the Social Security benefits, they are not paid only to the wage earner, but, if applicable, to some relatives. These are called auxilliary benefits. They include dependent children under the age of 16 and if the wage earner dies leaving a widow, she gets benefits beginning at age 60 (50 if she is disabled). In addition, if a child has a disability which would entitle him or her to disability benefits if she had the required quarters of coverage, and if the child acquired that disability before the age of 22, she will get benefits until she is no longer disabled.
To be entitled to these benefits, a person must have 40 quarters of coverage, which obviously means working for 10 years, but the years need not be successive, and the amount of earnings to be entitled to coverage is very minimal. Social Security also pays disability benefits to that worker who is unable to engage in any substantial gainful activity, considering his age, education, and past work experience. Auxilliary benefits are also paid here.
Social Security also pays benefits to a class of persons who are not eligible otherwise. This is called the Supplemental Insurance program, and the person must be “disabled” as defined in the Act, the same as above, as well as meeting the earnings and assets requirements (must be under certain amounts.) That person, however, must first apply for Medicaid benefits, which is run by a state but funded by both the state and the federal government. Those over 65 who are not entitled to Medicare are automatically entitled to supplemental insurance if they meet the earnings and assets requirements.
Your entitled by law to Social Security payments. Granted the law could change, but thats true of a lot of things. But the point is that the law says you get a payout each year, and there’s no need for Congress to reauthorize the expenditure. Unlike, say, funding for schools or the military or Medicaid, where the spending needs to be reauthorized every year, and there’s no legal guarantee that just because you got it last year, you’ll get it again this year.
In order to get disability benefits, you must not only be “disabled,” but meet the QC test: you must be fully insured (at least 40 QCs) and you must have 20 QCs in the 40 quarters prior to when your disability began (“currently insured”).
The people dont (pay)contribute for Medicaide , nor do they (pay)contribute for SSI ( Supplemental Security Income) which makes a huge federal big debt problem.
As I understand it, Medicaide and SSI are welfare and they are just given to people who did not work, never did work, and who did not contribute into the system. Anyone(don’t have to be a citizen) legally in the USA can retire and get a life long guaranteed retirement pension from SSI along with lifetime free health care from Medicaide.
You are talking about SSDI, which is different from SSI. There is no work, nor citizenship requirement in order to qualify for getting SSI income checks.
An attorney can get just about anyone thru the hoops of SSDI or SSI,…to get SSI and Medicaide. There is always a way to get welfare. (Watch for the SSI SSDI attorney ads targeted at people who got turned down for SSDI on late night television).
Additionally, it is against the law for a hospital to refuse treatment of anyone, so free heath care can also be obtained by anyone coming into the hospital ER
This is not correct. They are only required to care for someone without regard for ability to pay in certain situations. And if you are treated, it will not be free.
You can’t just walk up to an ER and get legally-mandated care for anything that ails you.
Others have done a much better job of explaining how these programs work, but maybe I can clear up this issue.
Social security is funded by a separate tax that the government cannot touch for other things.
However, social security (like anything) does not keep its “money” in a big pile of cash. That’d be stupid. It looks for very solid, very stable, very reliable investments that will grow the fund without exposing it to risk.
Well, the most stable, most secure investment in the world (hopefully this is still true) is US Govt bonds.
So the social security fund is mostly in the form of bonds. Social security owns a TON of US debt: if you look at the second graphhere, the difference between the red and black lines is the amount of US debt that is owned by the public, mostly the social security trust fund.
So the
I thought I made that clear in the post. No work requirements, but the person must still be “disabled” or age 65 or over. As per your cite:
(Blindness is a form of disability.)
In addition to that prior post, I forgot to add that there is a maximum amount of earnings one can have subject to FICA. I believe that it is now $108,000.
Took me a second.
It’s not exactly at the 11th hour. If anyone had been paying attention, it would have been obvious there was a demographic problem and that there wasn’t going to be enough money to go around. This is function of both people living longer and the birth rate decreasing.
At any rate, it is not fair to rob some third party (i.e., my generation) because the boomers feel cheated. I am already not expecting to not see a single cent from SS. If some people have their way, I will have to pay even more and still possibly not see a cent.
Yeah, yeah, yeah. The government has spent all the excess SS tax as fast as it came in. Now that they are having to pay out more SS than the tax brings in, they are either going to have to make massive cuts likely including SS or raise taxes. Taxes are toohigh for the economy to recover already.
Thanks for the explanations. Wow, seems like people are going to be pissed off no matter what the government does. I am kind of glad not to be an American right now
It’s a national pasttime as old as baseball.
Edit: Actually, older than baseball.