SNAP Benefit Reduction: Coming this November

Below, Corrections depicts the post-ARRA reductions in benefits coming this November.  The reductions to maximum benefits available by size to households of a given size vary by 5.5% and 6%, and are depicted in monthly dollar amounts below in red (click to enlarge).

The reductions will shave about $5 billion annually from SNAP payments to the approximately 48 million recipients.

Interestingly, the ARRA's plan was initially to allow inflation to whittle the benefits away: in August 2010, President Obama signed P.L. 111-226, which accelerated the sunset due to slow inflation (the bill was focused on reforming the Air Traffic Control system, and this was a rider).

The Corrections Shutdown has Ended!

Unfortunately, the BLS and other Federal agencies will roll out with a delay (click to enlarge).

Corrections is on Furlough!

Corrections is currently on furlough (click to enlarge [1] [2] [3] [4] [5]).

On the one hand, we consider the debt ceiling business embarrassing.  By definition, Borrowing=Revenues-Expenditures.  Congress chooses the two elements of righthand side, leaving the left side as a given.  But New Debt = Old Debt + Borrowing.  By setting a ceiling on New Debt (Old Debt is obviously predetermined), it sets a ceiling on Borrowing, and tries to (independently) choose or restrict all three elements.  Ludicrous.

However, as a political stunt or a politically focusing moment (taking a week or a month to talk about debt) is perhaps not unreasonable.  (What would be unreasonable would be to question whether or not the United States should pay its debts).  

Disability Insurance over Time

Below, Corrections depicts the number of people accruing disability benefits as well as the number of disabled over time (wives and children can also collect benefits) (click to enlarge) along with benefits (click to enlarge):

 We can normalize the count by looking at disability benefit counts divided by population (click to enlarge) and real benefit amounts (click to enlarge).

 Finally, we plot them all, normalized to January 2000 (click to enlarge).

Medicare Part D: Prescription Drug Benefits

In 2003, President Bush signed the Medicare Modernization Act, putting into place a prescription drug benefit program for Medicare, a program originally designed to provide medical insurance for those sixty-five years of age and older.

Medicaid Part D offers an unusual set of subsidies with a "hole" in coverage:  below, Corrections depicts the total cost of drugs along with the out-of-pocket costs (oopc) in 2009 as a function of total cost of drugs (click to enlarge).  If Medicaid had no value as a plan, the oopc line would be a 45 degree line passing through the origin.  Because of the deductible, it does for the first $295 in prescription costs.  After that, individuals don't pay the full amount.  However, from $2700 to $6154, individuals again pay the complete marginal cost of coverage:  this is the "Medicaid Part D Gap."

Below, Corrections depicts the average and marginal subsidies for drug coverage:  the "gap" becomes more apparent here (click to enlarge).  Notice that the average "chases" the marginal, at an ever-slowing rate.  Average subsidies quickly approach the 75% subsidy (25% co-insurance) but only slowly approach the 95% subsidy after $6154.

The Affordable Care act mildly mitigates this gap, giving a $250 check to those who enter the gap.  Its longer-term solution, to be achieved by 2020, is to close the gap through the use of generic brand coverage, and a 50% drug manufacturer discount, among other solutions.

Medicare

Medicare has four parts:

1. Medicare Part A, instituted in 1965, which contributes to nursing care, inpatient hospital care, home and hospice care.  
2. Medicare Part B, instituted in 1965, which contributes to physician services, outpatient hospital care, and other medical services.
3. Medicare Part C, or "Medicare Advantage" instituted in 1997/2003, substitutes the services of Part A and Part B, but are offered through a private entity (with a part of payments made by the government).
4. Medicare Part D, or "Medicare Prescription Drug Benefit" instituted in 2003/2006 subsidizes prescription drugs supplied through a private entity.

In 2012, the U.S. spent $536 billion on Medicare expenditures, and Corrections breaks down that spending by type (click to enlarge).

AFDC/TANF Benefits over Time

Below, Corrections depicts the number of beneficiaries for Aid to Families with Dependent Children (AFDC) and its successor program, Temporary Assistance for Needy Families (TANF) (click to enlarge).  AFDC was synonymous with cash-benefit welfare before 1996, when the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), part of the Contract with America, was signed into law by Bill Clinton. Around 1994 (denoted by the first red line) states began to request and were granted waivers to tighten welfare restrictiveness, in part due to the rapid rise of welfare beneficiaries in the early 1990's.

 By 1996, while rolls were falling due to new state actions, the PRWORA largely killed the welfare program by instituting five-year lifetime limits, and giving block grants to states, giving them incentives to find efficient uses for the money.  These grants have largely not increased over time, and are slowly being whittled away by inflation.