Social insurance, like commercial insurance, is about protection against financial risk. In the United States, Medicare and the Social Security Administration's programs for retirement, disability, worker's compensation, and worker's life insurance have become dominant features of American public policy, amounting to more than 41 percent of the federal budget. Yet their fiscal centrality does not rest on anything like an understanding of what makes social insurance social—or why that is so important to American political life. This essay seeks to clarify the crucial differences between social and commercial insurance and elaborates on the conceptual justifications and distinctive operational features of America's social insurance programs.

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