Explaining the Lack of Non-Public Actors in the U.S. Public Social Insurance System

Abstract

There are currently very few non-public actors playing a role in the federal and state social insurance programs in the United States. Yet, “projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.” As financial pressure increases on these programs, as it surely will, Americans may become more willing to go the privatization route and engage more non-public actors in the provision of social insurance.In the meantime, the paradox of the American social insurance system is that while disclaiming any desire for socialist-type programs, most Americans today believe that only the government should be responsible for providing the social insurance safety net. On the one hand, this could be because U.S. citizens are seeking to hold on to what meager social safety net they have left. On the other hand, scarred from the recent global recession and underhanded actions by many private investment firms and banks, most Americans are not yet ready to place their faith in these private actors, even if more efficiency, cost-savings, and activation could be achieved by doing so.What this all means is that unlike its counterparts in Europe, the United States social insurance system does not appear to have an incipient movement in which non-public actors will start to play a larger role in any American social insurance program in the near future. At the same time, the stability of the current system means there is unlikely to be the same diminishment in solidarity that is sometimes seen with the introduction of non-public actors into these programs in other countries.