How Undocumented Immigrants Help Strengthen Our Health Care System

By Esther Yu-Hsi Lee
Think Progress, June 24, 2015

Undocumented immigrants provided a surplus of $35.1 billion to the Medicare Trust Fund between 2000 and 2011, according to a new Journal of General Internal Medicine study recently published. The findings challenge concerns that undocumented immigrants are financially burdening the health care system.

According to the study, undocumented immigrants contributed $2.2 and $3.8 billion more than they withdrew annually between 2000 and 2011 to a Medicare program known as the Hospital Insurance Trust fund. The total contribution of their surplus was $35.1 billion.

Medicare consists of two trust funds. The Hospital Insurance Trust Fund (HITF), mostly paid through payroll taxes (and interest on past surpluses), pays for inpatient care. The Supplemental Medical Insurance Trust Fund (SMITF), mostly funded through enrollee premiums and Congressional appropriations from general revenues, pays for outpatient care.

“If unauthorized immigrants had not contributed to nor drawn HITF funds from 2000 to 2011, the HITF would become insolvent in 2029 — 1 year earlier than is currently predicted by Medicare’s Trustees based on their intermediate cost assumptions,” the study concluded.

The study found that in 2011 alone, undocumented immigrants paid in $3.5 billion more than they needed in care. “Unauthorized immigrants generated an average surplus of $316 per capita to the Trust Fund, while other Americans generated a deficit of $106 per capita,” the study’s press release indicated.

The report was a collaborative effort from researchers at Harvard Medical School, the Institute for Community Health, and the City University of New York School of Public Health at Hunter College. Researchers took data from 201,398 respondents in 2012 using the Current Population Survey.

If undocumented immigrants were allowed to get legal status and get on a path to citizenship like the one laid out in the Senate’s 2013 comprehensive immigration reform bill, the study estimated that the group at large could “contribute a cumulative surplus of $45.7 billion, as compared to $44.1 billion in the absence of this policy, from 2012 to 2019.”

Undocumented immigrants contribute the most to the HITF since they pay taxes with the jobs they have, sometimes on a borrowed or invalid Social Security number. That group also consists of undocumented immigrants shielded from deportation relief under President Obama’s 2012 executive action known as the Deferred Action for Childhood Arrivals (DACA) program, who have valid Social Security numbers and also contribute into Social Security taxes. Meanwhile, they typically don’t benefit from the program. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 imposed restrictions that barred undocumented immigrants from from accessing Medicare benefits. While they can collect on Medicare if they ever legalize, about one-third of undocumented immigrants leave the U.S.

Beyond Medicare, undocumented immigrants incur an estimated $5.5 billion in non-Medicare publicly funded health care expenses annually, but they also contribute to state and local taxes that help to offset those expenses. An Institute on Taxation and Economic Policy study found that undocumented immigrants paid an estimated $10.6 billion in 2010.

The lack of access to primary and preventative care can result in higher use of emergency room services and poor quality of care for immigrants who otherwise can’t find or afford care. As a result, undocumented immigrants are at disproportionate risk for chronic health issues like diabetes, tuberculosis, obesity, and drug and alcohol abuse. Poverty and social exclusion are also factors that perpetuate unhealthy living habits that can exacerbate those health issues.

Some state lawmakers are now trying to give undocumented immigrants the opportunity to sign up for health insurance. Earlier this month, the California Senate approved a bill to allow undocumented immigrants to buy health insurance on a state exchange under the federal Affordable Care Act. The bill still needs support from the General Assembly, a gubernatorial signature, and a federal waiver. A 2014 poll of California voters surveyed by the California Endowment found that 54 percent of voters want health coverage for undocumented immigrants.