Buffering Against Vicissitudes: the Role of Social Insurance in the Covid-19 Pandemic and in Maintaining Economic Stability

• Jurisdiction: United States,Federal
• Citation: Vol. 49 No. 3
• Publication year: 2021
• topic: Health Law,Social Security

Buffering Against Vicissitudes: The Role of Social Insurance in the COVID-19 Pandemic and in Maintaining Economic Stability

Renée M. Landers^*

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Thank you for the opportunity to participate in this conference on the important topic of "The Future of Global Health Governance." I commend the Dean Rusk International Law Center at the University of Georgia School of Law, and the editors and staff of the Georgia Journal of International & Comparative Law, for convening this symposium to examine the response of global institutions to the COVID-19 pandemic and to consider mechanisms for improving international cooperation in the future. Participating on a panel involving so many esteemed colleagues is a special honor. In addition, I am especially grateful to my friend and health law colleague Elizabeth Weeks for the invitation to participate in this discussion and for incorporating into this conference a consideration of the role that social insurance plays in mitigating the economic impacts of pandemic public health measures on the lives of people and families.¹ The title of this panel—"The Role of Federal Governments in Pandemics: How Can Governments Design Social Safety Nets to Reduce the Individual, Societal, and Global Impact of A Pandemic?"—recognizes the essential role of government-guaranteed economic security in sustaining the health of individuals and populations in times of crisis, as well as normalcy. This essay will explore how social insurance programs in the United States serve as mechanisms to buttress public health and healthcare measures to smooth the disruptive vicissitudes occurring under contemporary economic and environmental conditions.

Professor Ho² concluded her presentation with the observation that the emergence of the COVID-19 pandemic found a nation with inequality as its preexisting condition.³ The COVID-19 pandemic exposed preexisting inequality in access to health care and health insurance, and in income. These inequalities have a cascading impact resulting in inequalities in housing, food, transportation options, educational access, working conditions, environmental conditions, internet connectivity, and myriad other aspects of life. Concomitantly, the COVID-19 pandemic exposed weaknesses in the existing unemployment, workers' compensation, disability insurance, Medicare, Medicaid, long-term care, and family leave components of this infrastructure. In addition, the COVID-19 pandemic exposed gaps in these programs—nontraditional workers in the gig economy were ineligible for unemployment insurance, provision for caregiving is largely absent as a component of U.S. social insurance structures, the association of health insurance with employment left many workers vulnerable with lost jobs, and the administrative mechanisms through which many programs operated were not adequate to the high demand that COVID-19 occasioned. Some people who

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contracted COVID-19 may continue to experience effects of the disease which may limit their ability to work or care for their families. Finally, the COVID-19 emergency required federal and state officials to institute measures to overcome longstanding barriers to health insurance coverage for delivery of healthcare services remotely.

This conference took place shortly after the Biden Administration assumed office. According to the Economic Policy Institute, the economic downturn resulting from the institution of public health measures during COVID-19 affected 25.7 million workers.⁴ Of that number, 11.1 million were unemployed, 7.0 million were employed but experiencing a cut in pay and hours, 3.1 million were misclassified as employed or not in the labor force, and 4.5 million dropped out of the labor force.⁵ Most economists would say that the official unemployment measures often understate the problem because of the lag in data collection.⁶ Workers also may not be captured by these surveys of unemployment because COVID-19 business closures classified work absence as "employed but absent from work" instead of "unemployed on temporary layoff."⁷

The dislocation resulting from these massive levels of unemployment is significant. Using the Census Bureau Household Pulse Survey for December 9-21, 2020, the Center for Budget and Policy Priorities (CBPP) found that households of nearly one in five adults with children lacked sufficient food in the last seven days.⁸ Mirroring the disproportionate impact of the COVID-19 virus, black and Latinx households were more likely to experience food insufficiency during the pandemic.⁹ Nearly one in five renters were not caught up on rent during the pandemic, with renters of color facing greatest hardships.¹⁰ One quarter of renters

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living with children were not caught up on rent.¹¹ More than one-third of adults surveyed had trouble paying for usual household expenses in the last week.¹² Job losses were largest in low-wage industries. The unemployment rate disproportionately affected women, immigrants, young adults, and less educated workers.¹³

These effects of the COVID-19 recession layered disruption on a society characterized by economic inequality.¹⁴ Research based on the census found that the top 20% of earners with incomes of $130,001 or more in 2018 captured more than 50% of all U.S. income.¹⁵ This Pew Research Center report found that income inequality in the United States is the highest of all G7 nations.¹⁶ Income gaps between Black and white people have also persisted in recent decades, with median Black household income being 61% of white household income in 2018.¹⁷ From 1989 to 2016, the wealth gap between the nation's wealthiest and poorest families more than doubled, and, since the Great Recession, only families with a median net worth in the top 20% increased their wealth between 2007 and 2016.¹⁸ Finally, middle-class incomes have not grown at the same rate as have upper-tier incomes.¹⁹

Median household incomes continue to vary by race and ethnicity even though incomes for all households increased in 2019.²⁰ Median household incomes in 2019 were as follows: $98,174 for Asian American households, $76,057 for

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white households, $56,113 for Hispanic households, $46,073 for Black households.²¹ Job losses due to the pandemic have significantly undercut these income levels, with job losses disproportionately affecting Black and Hispanic workers.²² Poverty rates also are unequal when analyzed by race: 18.7% for Blacks, 15.7% for Hispanics, 7.3% for Asian Americans, and 7.3% for whites.²³

Existing social insurance programs mitigate poverty among the beneficiary populations. The Social Security Disability Insurance (SSDI) program has approximately 8.2 million beneficiaries, plus 1.4 million children.²⁴ The average amount of benefits is $1100 per month or $13,200 per year.²⁵ Most beneficiaries, especially people who are not married, rely on SSDI for most of their income.²⁶ These modest benefit payments represented "at least half of total family income for" 47% of beneficiaries in 2010, and 20% of beneficiaries relied on benefits for 90% or more of their income.²⁷ For 71% of unmarried beneficiaries, SSDI benefits represent half or more of annual income.²⁸

Approximately 8 million people, including 1. 1 million children, rely on the Supplemental Security Income (SSI) program for support, with more than half receiving the basic monthly benefit of $794 per month in 2021—approximately

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three-quarters of the federal poverty line.²⁹ SSI beneficiaries also have access to the Medicaid programs.³⁰

The Social Security retirement benefit provides the majority of income to most elderly Americans.³¹ For half of seniors, it provides at least 50% of their income and for about 25%, it provides at least 90% of income.³² In June 2020, the average monthly benefit was $1514—about $18,170 per year.³³ With this modest level of benefits, adequacy is an issue and a concern exacerbated for workers who have to claim benefits before the full retirement age because they can no longer find work or because they work in physically demanding jobs which they can no longer perform.³⁴ As a percentage of earnings, Social Security benefits in the United States rank just outside of the bottom third of OECD countries.³⁵

Despite these trends in inequality and economic vulnerability, recent government policies and proposals tended toward deregulation and the undermining of social insurance, health care, and other programs that provide economic support and opportunity for "ordinary citizens."³⁶ Among the examples of a weak

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commitment to crucial government supports for lower-income families are proposals to replace Social Security with private investment accounts, the failure of a dozen states to adopt the Medicaid expansion, state requests for waivers to condition Medicaid benefits on work requirements, proposals to tighten eligibility for Supplemental Nutrition Assistance Program (SNAP) or food stamp benefits, and contentious and divergent views about the size and nature of continued relief to ameliorate the effects of the pandemic.³⁷

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As the income levels presented earlier indicate, work often does not secure an adequate living. The increasing globalization of labor markets creates instability. Similarly, the nature of work is evolving, weakening the employer-employee relationship. Many workers are classified as independent contractors, have only contingent work arrangements with time-limited work and irregular and unpredictable schedules, and must rely on online labor platforms.³⁸ These work arrangements expose workers to risks that create economic vulnerability. Risks include income risk due to the loss of access, inadequacy, or volatility of income; health risk due to the lack of employer-based insurance—mitigated by the provisions of the Affordable Care Act; retirement risk because of the absence of private pensions and nonparticipation in the Social Security system...