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The safety net includes a number of other programs: government-subsidized school lunches and breakfasts for children from low-income families; the Special Supplemental Food Program for Women, Infants and Children (WIC) , which provides food assistance for pregnant women and newborns; the Low Income Home Energy Assistance Program, which provides help with home heating bills; housing assistance, which helps pay the rent; and Supplemental Security Income, which provides cash support for the disabled and the elderly poor.


Medicaid    was created by Congress in 1965 and is a joint health insurance program entered into by both the states and the federal government. The federal government helps fund Medicaid, but each state is responsible for administering the program, determining the level of benefits, and determining eligibility. It provides medical insurance for certain low-income people, including those below the poverty line, with a focus on families with children, the elderly, and the disabled. About one-third of Medicaid spending is for low-income mothers with children. While an increasing share of the program funding in recent years has gone to pay for nursing home costs for the elderly poor. The program ensures that a basic level of benefits is provided to Medicaid participants, but because each state sets eligibility requirements and provides varying levels of service, the program differs from state to state.

In the past, a common problem has been that many low-paying jobs pay enough to a breadwinner so that a family could lose its eligibility for Medicaid, yet the job does not offer health insurance benefits. A poor parent considering such a job might choose not to work rather than lose health insurance for his or her children. In this way, health insurance can become a part of the poverty trap. Many states recognized this problem in the 1980s and 1990s and expanded their Medicaid coverage to include not just the poor, but the near-poor earning up to 135% or even 185% of the poverty line. Some states also guaranteed that children would not lose coverage if their parents worked.

These expanded guarantees cost the government money, of course, but they also helped to encourage those on welfare to enter the labor force. As of 2014, approximately 69.7 million people participated in Medicaid. Of those enrolled, almost half are children. Healthcare expenditures, however, are highest for the elderly population, which comprises approximately 25% of participants. As [link] (a) indicates, the largest number of households that enroll in Medicaid are those with children. Lower-income adults are the next largest group enrolled in Medicaid at 28%. The blind and disabled are 16% of those enrolled, and seniors are 9% of those enrolled. [link] (b) shows how much actual Medicaid dollars are spent for each group. Out of total Medicaid spending, more is spent on seniors (20%) and the blind and disabled (44%). So, 64% of all Medicaid spending goes to seniors, the blind, and disabled. Children receive 21% of all Medicaid spending, followed by adults at 15%.

Medicaid enrollment and spending

The graph on the left shows that the majority of those enrolled in Medicaid are children (47%). The graph on the right shows that the majority of Medicaid spending takes place by people who are blind and disabled (44%).
Part (a) shows the Medicaid enrollment by different populations, with children comprising the largest percentage at 47%, followed by adults at 28%, and the blind and disabled at 16%. Part (b) shows that Medicaid spending is principally for the blind and disabled, followed by the elderly. Although children are the largest population covered by Medicaid, expenditures on children are only at 21%.

Key concepts and summary

The group of government programs that assist the poor are called the safety net. In the United States, prominent safety net programs include Temporary Assistance to Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP), the earned income tax credit (EITC), Medicaid, and the Special Supplemental Food Program for Women, Infants, and Children (WIC).


Congressional Budget Office. 2015. “The Effects of Potential Cuts in SNAP Spending on Households With Different Amounts of Income.” Accessed April 13, 2015. https://www.cbo.gov/publication/49978.

Falk, Gene. Congressional Research Service. “The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions.” Last modified October 17, 2013. http://www.fas.org/sgp/crs/misc/RL32760.pdf.

Library of Congress. “Congressional Research Service.” http://www.loc.gov/crsinfo/about/.

Office of Management and Budget. “Fiscal Year 2013 Historical Tables: Budget of the U.S. Government.” http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/hist.pdf.

Tax Policy Center: Urban Institute and Brookings Institution. “The Tax Policy Briefing Book: Taxation and the Family: What is the Earned Income Tax Credit?” http://www.taxpolicycenter.org/briefing-book/key-elements/family/eitc.cfm.

Questions & Answers

Compare and contrast between Natural and Artificial Resources and their ultimate impacts in an economy. Give one example to support your discussion.
Angela Reply
Exemple: Diamant or uranium, fer, calcaire
how does interest rate affect aggregate output
kelvin Reply
what is Keynesian theory
need a curves for typical isoquost and isoquant
what is isoquant
isoquat is a curve shows differnt combinations of two inputs which can produce same level of output
examples of giffen goods
then what isoquost
, if the price of an essential food staple, such as rice, rises it may mean that consumers have less money to buy more expensive foods, so they will actually be forced to buy more rice.
that's an example
majid Khan that's the wrong definition of isoquant
you are defining isocost
isocost curve is a locus of points that shows the different combinations of commodities purchased by a consumer with a fixed budget
The change in fiscal policy leads to an increased level of output and interest rates is because an increase in government expenses directly affects aggregate demand. A decline in taxes result in more disposable income, consequently leading to a rise in consumption expenditure.
dats for kelvin
dats d answer for the audio how does interest rate affect aggregate output
question not audio
u are right joker
what is journal entry?
explain the nature of economics
Matilda Reply
interpret micro economic issues
ito ang dami ng producto na nais handa at kanyang ibenta ng isang prodyuser
Jomar Reply
i dont understand
even I also don't understand ..this language.. vn I converse everybody say farzana ur language is not understood by all user? now no one there is question about it?
he is saying that "this is the amount of product it wants to be ready and sells by a producer"
I Merr has knowledge,which is the economiccircuit role in a society
What is diminishing returns?
Shadrach Reply
explain competitive demand
the demand that are compiting for sale. the buyer can substitute one for another good
the demand where commodities fight for the market. in this type of demand, commodities can be substituted for the most suitable one subject to ( price, consumers choice, consumers income etc)
Demand is said to be competitive when a commodity that is needed to satisfy wants in place of another similar goods. increase in price of a commodity X will result in increase in demand of the substitute (commmodity Y).
examples of giffen goods are garri (cassava), maize
yusuf Reply
what is Public Finance?
kweku Reply
it's basically the field of economics that deals with the government's involvement in the economy; from spending to maybe interest rate manipulation, etc.
examples of giffen goods
i want to get the solutions of problems how i get kindly give guidance
Syeda Reply
please give some suggestions about getting solutions of all chapters...
hard work
and the grace of God
knowledge skills
Syeda Economics is difficult. No all fields are difficult
what is Keynesian
Keynesian economics is the theory proposed by Keynes( an economist). He proposed to manipulate demand side factors to bring economy out of depression in 1930s.
whose totaly oppossid the government intervention and give importance to agreegad demand
Good afternoon my fellow forum brothers and sisters
Abdullahi Reply
no just want to know true God
Good afternoon!!
hey is there somebody single n young like me bcoz I'm looking for
what is facing trade offs
Nancy Reply
It is giving up a commodity to purchase another commodity
for example, when we have two commodities like chicken and turkey you can trade off of give up chicken to purchase turkey
that can also be called foregone goods
it like opportunity cost
it's like trade by batter
Do you transform into thesecourses, in french people?
I can just speak french andI can just speak french and no english
what is elastic
Tida Reply
elastic is the change in to price and change in demand
Is the percentage change in quantity demand and quantity supply.
Or percentage change in price of demand and supply
Robert Mensah you are explaining elasticity of demand
robert i think he talk about elastic releated to elasticity of price a proportionate change in price over qd
can anyone explain what happrn her i don't understand anything
is the percentage change in demand as price change
sometimes price is elastic,inelastic
price elasticity is different from price being elastic
elasticity is not always the percentage change in demand as a result of changes in price. there's income elasticity and cross elasticity so it's not necessarily always price
elastic is when a change in price of a commodity results in a relatively a larger proportion change in the quantity demand of the commodity
what is inelastic
Tida Reply
price is said to be inelastic when it is less than 1
what is national income accounting
Aisha Reply
National income is the income earned by all factors of production..
So this benefits the workers or the businesses?
Like whose income are we talking about here
what is multiplier
Good & services manufactured in a country with in one year is calld national income
incom earned by using of sources of production is national income while i dont know the accounting insuch
neil and aisha can u explain the turm accounting in such question
I think when we include accounting national income accounting is the measurement of total goods and services produced in an economy in a given period of time
what is mutual funds
Khalid Reply
it is a combination of financial securities such as treasury bills , bonds etc in one managed by an institution that individuals and firms invest in for profit. it is usually a long term investment and is seen as a low risk investment because the financial instruments invested in, are diversified.
A mutual fund is a professional managed investment that pools money from many investors to invest.

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