Chapter 28 — Self-Check Quiz

Twelve multiple-choice questions and four short-answer prompts. Answers and explanations follow at the end.

Multiple Choice

1. Which of the following programs is universal-by-age rather than means-tested?

A. Medicaid B. Supplemental Security Income (SSI) C. Medicare D. Temporary Assistance for Needy Families (TANF)

2. The American social safety net is sometimes described as "layered." This means:

A. It is delivered through the same agency in all 50 states. B. It has been built up through accreted historical decisions rather than designed as a coherent system, with new programs added without removing prior ones. C. It primarily delivers cash assistance rather than in-kind benefits. D. It is administered entirely by the federal government with no state role.

3. The 1983 Social Security reform, signed by President Reagan after the Greenspan Commission's recommendations, did all of the following EXCEPT:

A. Raise payroll-tax rates. B. Gradually raise the full-retirement age from 65 to 67. C. Tax a portion of benefits for higher-income retirees. D. Eliminate the payroll-tax cap on high earners.

4. The Medicare program's four parts are typically described as:

A. Hospital, outpatient, drug, and Medicare Advantage. B. Acute, chronic, preventive, and end-of-life. C. Federal, state, county, and local. D. Inpatient, outpatient, dental, and vision.

5. In NFIB v. Sebelius (2012), Chief Justice John Roberts:

A. Struck down the Affordable Care Act in its entirety. B. Upheld the individual mandate as an exercise of Congress's commerce-clause power. C. Upheld the individual mandate as an exercise of Congress's tax power, while holding that the Medicaid expansion's all-or-nothing structure was unconstitutionally coercive. D. Held that the Medicaid expansion was constitutional as enacted, while striking down the individual mandate.

6. As of 2025, approximately how many states have adopted the ACA Medicaid expansion?

A. 25 B. 30 C. 41 plus the District of Columbia D. All 50

7. The Earned Income Tax Credit (EITC):

A. Is a non-refundable tax credit available only to high-income filers. B. Is a refundable tax credit conditioned on having earned income, paid through the tax code rather than through a benefit agency, with bipartisan policy support. C. Was created in 2010 by the Affordable Care Act. D. Phases in only above $50,000 of earned income.

8. The 1996 welfare reform replaced AFDC with TANF and changed the program's structure. Which of the following is NOT a feature of the 1996 reform?

A. A federal block grant fixed in nominal dollars and not indexed for inflation. B. The end of the entitlement to cash assistance for all eligible families. C. Federal work requirements for most adult recipients. D. A guaranteed federal cash benefit for any family with income below the poverty line.

9. The 2021 American Rescue Plan Act's expanded Child Tax Credit:

A. Was made permanent by Congress in 2022. B. Was a temporary one-year expansion that, according to Census data, helped reduce child poverty from 9.7 percent in 2020 to 5.2 percent in 2021, but expired and was not extended. C. Eliminated the EITC. D. Reduced the CTC for low-income families.

10. Comparing the United States to peer OECD democracies on healthcare:

A. The United States spends a comparable share of GDP and achieves comparable outcomes. B. The United States spends substantially more per capita and as a share of GDP, while achieving worse outcomes on most population-health metrics like life expectancy and infant mortality. C. The United States spends less per capita but achieves better outcomes through market efficiency. D. The United States spends more but achieves uniformly better outcomes.

11. Which statement about international healthcare systems is most accurate?

A. All advanced democracies have single-payer systems. B. The United States is the only advanced democracy with anything other than a fully government-run system. C. Advanced democracies achieve universal coverage through a range of structures: single-payer (U.K., Canada), regulated multi-payer with mandatory coverage (Germany, Switzerland, Netherlands), and various hybrids. D. Single-payer systems uniformly produce better outcomes on every measurable metric than multi-payer systems.

12. The "TANF-to-poverty ratio" — the share of poor families with children receiving TANF cash assistance — has:

A. Risen substantially since 1996, indicating expanded reach. B. Fallen dramatically since 1996, from about 68 percent in 1996 to about 21 percent today, reflecting a weakened cash safety net even as in-kind and tax-credit support has grown. C. Stayed essentially constant. D. Risen above the AFDC level due to the work-supports built around the EITC.

Short Answer

S1. Explain the "three-legged stool" of the Affordable Care Act. What are the three legs, why are they interdependent, and what happened when one was effectively removed in 2017? (150-200 words)

S2. State the strongest version of the case for Medicare for All in three to four sentences, and the strongest version of the case for multipayer reform in three to four sentences. Then identify the empirical or normative premise that, in your view, distinguishes them most fundamentally. (200-250 words)

S3. The 1996 welfare reform's empirical record is mixed. Identify two outcomes that supporters cite as successes, and two outcomes that critics cite as failures. (150 words)

S4. Explain why the projected Social Security trust-fund depletion in roughly 2034 is not the same as "Social Security going bankrupt," and what it actually means for benefits if Congress does not act before depletion. (100-150 words)

Answers and Explanations

Multiple choice:

1. C. Medicare is universal-by-age — it covers virtually all adults 65 and older without regard to income. Medicaid (A) and SSI (B) are means-tested. TANF (D) is means-tested.

2. B. "Layered" describes the historical-accretion structure: each new program was added without removing or rationalizing prior programs. The result is more than 80 federal programs, often with overlapping but distinct eligibility rules.

3. D. The 1983 reform did all of A, B, and C. It did not eliminate the payroll-tax cap, which remains a live reform proposal today.

4. A. Part A (hospital), Part B (outpatient), Part C (Medicare Advantage), Part D (drug benefit).

5. C. Roberts upheld the mandate as a tax (not under the Commerce Clause) and struck down the Medicaid expansion's coercive all-or-nothing structure, making expansion effectively optional for states.

6. C. As of 2025, 41 states plus the District of Columbia have adopted Medicaid expansion. Holdouts are concentrated in the South.

7. B. The EITC is refundable, conditioned on earned income, and has commanded bipartisan support since at least the 1986 expansion under Reagan.

8. D. TANF eliminated the entitlement to cash assistance — there is no federal guarantee. The block grant is fixed and not inflation-indexed. Work requirements were federal innovations of the 1996 reform.

9. B. The 2021 expansion was temporary (one year), made the CTC fully refundable for that year, paid monthly, and produced the largest single-year child-poverty reduction in measured American history. It expired at the end of 2021 and Congress has not extended it.

10. B. The U.S. spends about 17-18 percent of GDP on healthcare (against the OECD average around 10 percent), with worse outcomes on life expectancy, infant mortality, and maternal mortality.

11. C. Universal coverage in peer democracies is achieved through diverse structures. Single-payer is one option among several; the German and Swiss systems are regulated-private rather than government-run.

12. B. The cash safety net (TANF) has shrunk dramatically since 1996, even as the in-kind safety net (SNAP, Medicaid, ACA) and the tax-code safety net (EITC, CTC) have grown.

Short-answer guidance:

S1. The three legs are: insurance-market reform (no pre-existing-condition exclusions, guaranteed issue), individual mandate (everyone must buy coverage, eliminating adverse selection), and subsidies (tax credits scaled to income). They are interdependent: without the mandate, healthy people would buy coverage only when sick (since insurers can no longer turn them away), driving up premiums and creating a death spiral. The 2017 tax law zeroed the mandate penalty. Predictions of immediate market collapse did not materialize because subsidies (especially after IRA enhancement) absorbed much of the adverse-selection effect, but premiums in the unsubsidized portion of the individual market rose. The 2021 California v. Texas ruling rejected the constitutional challenge based on the un-funded mandate.

S2. The case for M4A: universal coverage; lower administrative costs (estimated 25-30 percent of healthcare spending in the U.S. vs. ~13 percent in Canada); leverage to negotiate drug prices; population-health outcomes in single-payer democracies are generally better despite lower spending. The case for multipayer reform: comparable democracies don't all use single-payer (Germany, Switzerland, Netherlands are regulated multi-payer); transition disruption from replacing the largest sector of the economy is severe; private innovation incentives matter; an extended ACA architecture (public option, automated enrollment, drug-pricing reform) could close most coverage gaps without the political and transition costs. The distinguishing premise is typically whether the gains from administrative consolidation outweigh the costs of forced transition and the loss of private-market choice — and that depends on empirical estimates that reasonable analysts dispute.

S3. Successes: work participation rates among single mothers rose substantially in the late 1990s and 2000s; earnings and incomes for working-poor families rose, especially as the EITC was expanded alongside the reform; child poverty (post-tax-and-transfer) fell from 1996 through 2000. Failures: the cash-assistance safety net atrophied, with TANF caseloads dropping from 12.6 million to 1.7 million (much steeper than the underlying poverty drop); deep poverty among single-mother households rose in the 2000s and 2010s; states diverted block-grant funds from cash assistance; the program failed to respond counter-cyclically during the 2007-09 recession.

S4. "Bankruptcy" implies the program ends. Trust-fund depletion means that the accumulated reserves run out, but payroll-tax revenue continues flowing in. After depletion, that ongoing revenue is projected to cover roughly 77-80 percent of scheduled benefits. So if Congress does not act, beneficiaries would face an across-the-board benefit cut of 20-23 percent — a politically intolerable outcome that virtually all analysts expect Congress to prevent through some combination of revenue increases and benefit-formula changes before 2034.