Paul Sanchez
Welfare insurance, also known as Medicaid, is a health insurance plan for individuals and families whose income falls below federal poverty standards. It is a government-funded program that provides health care, food subsidies, housing assistance, and child care assistance to those in need. The benefits and requirements vary by state, with eligibility based on financial status, family size, income, or an assessed disability. Supplemental Security Income (SSI) and the Supplemental Nutrition Assistance Program (SNAP) are other federal programs that provide welfare benefits.
| Characteristics | Values |
|---|---|
| Common label | Welfare |
| Other names | Medicaid, Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), Children's Health Insurance Program (CHIP), Temporary Assistance for Needy Families (TANF) |
| Who it is for | Individuals and families with income below the poverty line |
| What it provides | Health care, food subsidies, housing assistance, child care assistance, cash assistance for living expenses, job training, tuition payments for work-related education |
| How often are the payments | Biweekly or monthly |
| Who funds it | Taxpayers |
| How is it distributed | Vouchers, direct payments, debit card, direct deposit, paper checks |
| Who administers it | Federal government, state governments, Social Security Administration (SSA) |
| Who is eligible | Eligibility criteria vary by state, based on income levels, family size, financial status, disability |
| Coverage | 21% nationally, ranging from 11% in Utah to 34% in New Mexico |
| Key benefits | Better access to care than uninsured, limited out-of-pocket costs, positive effects on health and long-run educational attainment |
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What You'll Learn
Medicaid
In the United States, welfare is a common label for a range of government programs that assist individuals and families whose income falls below the poverty line. These programs provide health care, food subsidies, housing assistance, and child care assistance to those in need. Medicaid is one such welfare program.
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Supplemental Security Income
SSI is available to those who are 65 or older or have a severe disability, including blindness, neurological challenges, respiratory disease, and failure to thrive. In January 2024, 7.4 million people collected SSI benefits, with 84% of beneficiaries eligible due to a severe disability. SSI beneficiaries may possess no more than $2,000 in assets for individuals and $3,000 for couples, with certain exceptions.
SSI beneficiaries receive monthly payments that depend on their income, living situation, and other factors. They must report their wages, other income, and changes to their resources or living arrangements each month. SSI benefit amounts are reduced for beneficiaries with other sources of income or who live in a Medicaid facility or with someone providing support. For example, while the SSA exempts the first $20 per month of unearned income when determining SSI eligibility and benefit levels, any income above this amount from sources like Social Security benefits, pensions, interest, and child support is subtracted from SSI benefits.
SSI is funded from general revenues, with expenditures of $65 billion in fiscal year 2022, amounting to 0.26% of the gross domestic product. SSI's administrative costs are higher than those for Social Security due to its complex rules. While SSI benefits provide essential support, they are typically not sufficient to lift someone living independently above the poverty line. In 2016, roughly half of all beneficiaries had incomes below the federal poverty line even with their SSI benefits.
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Supplemental Nutrition Assistance Program
The Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is a federal welfare program that provides nutritional support to low-income households. It is administered by the states and offers payments that can be used to purchase food. Households deemed eligible for SNAP receive an EBT (electronic benefit transfer) card, which is loaded with benefits monthly. The benefits can then be used to buy food at one of the over 261,000 authorised retailers participating in the program. SNAP benefits cannot be used to purchase alcoholic beverages, cigarettes, vitamin supplements, non-food grocery items, or hot foods.
Eligibility for SNAP is based on income levels and household composition. Most state agencies have adopted broad-based categorical eligibility (BBCE), which allows them to align income and resource limits with their Temporary Assistance for Needy Families (TANF)-funded programs. Households that are eligible for TANF or maintenance of effort (MOE) state-funded non-cash benefits are generally categorically eligible for SNAP. However, they must still meet non-financial eligibility rules and have incomes low enough to qualify.
The average SNAP participant receives around $187 per month or about $6.16 per day in benefits. The program is designed to provide greater benefits to households with the lowest incomes to help them afford an adequate diet. SNAP is the most responsive federal program in providing additional assistance during and after economic downturns, aside from unemployment insurance. It serves a significant portion of families with children, older adults, and people with disabilities.
SNAP is a federal-state partnership, with the federal government paying for the benefits and sharing the cost of administering the program with the states. While SNAP operates across the 50 states, the District of Columbia, Guam, and the Virgin Islands, it does not cover Puerto Rico, American Samoa, or the Commonwealth of the Northern Mariana Islands. During disasters, USDA and states may provide temporary Disaster SNAP benefits to non-participants who have suffered significant losses.
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Temporary Assistance for Needy Families
Each state or tribal government runs its TANF program differently and has a different name for it. Every state or tribal territory has its own TANF requirements for who can get financial help, services, or other benefits. To be eligible for benefits, you must be a resident of the state where you are applying. The benefits vary by state, with eligibility based on the person's financial status, family size, income, or an assessed disability.
In addition to cash assistance for living expenses, many states offer job training and help with tuition payments for work-related education. Every state issues TANF benefits electronically on a debit card or through direct deposit, although some also issue benefits with paper checks. TANF's four purposes are so broad that states have been able to shift funds away from providing basic cash assistance to other uses. Some states have used the funds to support employment among low-income families, while others have used them to provide services to families with incomes above the poverty line.
To improve access to the program, states can lift income thresholds and asset limits for applicants, remove barriers for those seeking cash assistance, and stop implementing punitive policies such as sanctions and time limits. States can also redesign their work programs to help TANF participants gain the education, skills, and work experience that will allow them to find and maintain quality jobs.
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Housing assistance
Welfare is a common label for government-funded programs that assist individuals and families with low incomes. In the United States, these programs are often referred to as welfare and include initiatives such as Medicaid, Supplemental Security Income (SSI), and the Supplemental Nutrition Assistance Program (SNAP).
Additionally, the U.S. Department of Housing and Urban Development (HUD) acquires residential properties, typically with one to four units, through foreclosure actions on Federal Housing Administration (FHA)-insured mortgages. These properties are then rented out as public housing to eligible low-income families, ensuring they have access to decent and safe rental housing.
The Continuum of Care (CoC) Homeless Assistance Program is another initiative that assists individuals and families experiencing homelessness. This program helps homeless people secure transitional and permanent housing, with the goal of quickly regaining stability. Furthermore, the Home Equity Conversion Mortgage (HECM) program, also administered by the Federal Housing Administration (FHA), enables individuals to withdraw equity from their homes, providing financial flexibility.
Welfare programs, including housing assistance, vary by state, and eligibility is determined based on income levels, family size, and other factors. These programs are typically funded by the federal government, which distributes money to states through initiatives like the Temporary Assistance for Needy Families (TANF) program.
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Frequently asked questions
Welfare insurance in the US is called Medicaid.
Medicaid is a health insurance plan for those whose income falls below federal poverty standards. It provides coverage for low-income people, including families, children, pregnant women, the elderly, and people with disabilities.
Medicaid covers services required by federal law, and all states also elect to cover optional benefits like prescription drugs and home care. It also covers non-emergency medical transportation and comprehensive benefits for children, known as Early Periodic Screening Diagnosis and Treatment (EPSDT) services.
Eligibility for Medicaid is based on income levels and family size. All states must offer young people transitioning from foster care to independent adulthood Medicaid coverage until they turn 26.
