Undocumented immigrants help keep Medicare solvent, according to new study
By George Lauer
California Healthline, June 29, 2015
Undocumented immigrants pay billions more into Medicare every year than they use in health benefits, and in fact they subsidize care for other Americans, according to researchers.
A study published in the Journal of General Internal Medicine contends that undocumented immigrants generated surplus Medicare contributions of $35.1 billion from 2000 to 2011, extending Medicare's estimated life span by one full year. The study appeared earlier this month as an "online first" article in the Journal of General Internal Medicine and will appear in a forthcoming print edition of the journal.
Researchers from Harvard Medical School, the Institute for Community Health and City University of New York's School of Public Health at Hunter College found that in one year alone -- 2011 -- undocumented immigrants generated an average surplus of $316 apiece for Medicare. Other Americans generated an average deficit of $106 apiece. Undocumented immigrants contributed $3.5 billion more than they received in care in 2011, according to the study.
Researchers concluded that restricting immigration would be bad for Medicare's financial health. They estimated that contributions from undocumented immigrants during the first decade of the century prolonged Medicare's trust fund solvency by one year. The trust fund is predicted to be insolvent in 15 years.
Background and study methodology
Undocumented immigrants are not eligible to participate in government health programs, including Medicare and the Affordable Care Act, but they do contribute by paying taxes. Payroll taxes are the major revenue source for Medicare's trust fund, used primarily to pay hospital bills. Using an Individual Tax Identification Number or an unauthorized Social Security number, most undocumented immigrants -- the estimate in California is 90% -- pay payroll taxes.
Researchers examined Medicare trust fund contributions and expenditures from 2000 through 2011, comparing data from the Census Bureau's Current Population Survey to calculate tax contributions. They used the HHS Medical Expenditure Panel Survey to determine medical expenses paid by Medicare.
"For years I have seen my unauthorized immigrant patients be blamed for driving up health care costs," lead author Leah Zallman, a faculty member at Harvard Medical School and researcher at the Institute for Community Health said in a prepared statement. "Yet few acknowledge their contributions. Our study demonstrates that in one large sector of the U.S. health care economy, unauthorized immigrants actually subsidize the care of other Americans."
CMS officials declined to comment on the research, citing a standing policy against commenting on "outside studies."
Implications for Medi-Cal
Although the research dealt exclusively with Medicare -- the federal health coverage program for seniors and those with disabilities -- the findings have implications for Medicaid -- the state-federal partnership providing health care for those with low incomes -- according to California Insurance Commissioner Dave Jones (D).
"While these are two different programs with different funding sources, I think there's no question that this study lends support to the efforts to extend Medi-Cal coverage to undocumented immigrants. I think many of the same points in this research -- that undocumented immigrants contribute tax money to support government programs -- applies to Medicaid and California's Medicaid program, Medi-Cal," Jones said.
Zallman said the study's underlying message -- that undocumented immigrants' contributions should be recognized and appreciated -- applies to Medicaid, as well.
"I think our study should cause us to re-examine our assumptions about the impacts of unauthorized immigrants in other sectors such as Medicaid," Zallman said.
Daniel Zingale, senior vice president at the California Endowment, said the Medicare research showed similar results to the Endowment's own efforts to secure health coverage for undocumented Californians.
"These findings mirror what we found in California -- that undocumented people contribute far more than they take out," Zingale said.
As part of its Health4All campaign, the California Endowment did similar research in California and found undocumented Californians paid $3.2 billion in state and local taxes in 2012.
The Endowment's statistics are included in a You Tube video, California's Hidden Truth.
Research may affect immigration reform
Jones and Zingale predicted the Medicare research would help advance immigration reform efforts.
"I believe this may be the first study to analyze the impact of unauthorized immigrants on the national Medicare program," Jones said. "The information is well researched and well documented and clearly shows they have had a very positive impact."
Jones said the study goes one step further and predicts that immigrants will continue to bolster Medicare's trust fund under President Obama's immigration reforms.
"This study also analyzes the potential impact of the president's efforts if the courts allow him to move forward with immigration reform to enable some portion of the unauthorized population to stabilize their status and move forward on a path to citizenship. The net contributions persist even if there's a path to citizenship," Jones said.
Zingale said Medicare's national status will help broaden the immigration arguments his organization has been making in California.
"This is another installment in a mounting number of facts that show how undocumented people are good for the health of our country," Zingale said. "Because Medicare is a big deal, it will advance that progress toward a greater understanding."
Zingale and Jones both pointed to California's budget agreement last week that includes health coverage for undocumented children.
"Clearing the way for children of unauthorized immigrants to join Medi-Cal is a good first step," Jones said.
"We're calling that the first ever health for all kids budget," Zingale said. "That shows you how far we've come. That budget received Republican votes. Indeed, we are in a very different place than we were just a few years ago. Remember Proposition 187?"
In 1994, California voters approved Prop. 187, a controversial ballot measure denying public services -- including health care and education -- to undocumented immigrants. Courts declared much of the initiative unconstitutional and last year, Gov. Jerry Brown (D) signed legislation repealing unenforceable provisions of the proposition.
Ties to national physicians group
Physicians for a National Health Program, a national advocacy organization, is helping spread the word about the Medicare research.
Although the group "had no role in conducting, financing or otherwise supporting the research, it decided to help publicize the study and its findings because they are consistent with PNHP's mission statement," Zallman said.
The organization's mission statement, in part, says:
"PNHP believes that access to high-quality health care is a right of all people and should be provided equitably as a public service rather than bought and sold as a commodity."
Two of the Medicare study authors -- Steffie Woolhandler and David Himmelstein, both professors of public health at City University of New York and lecturers in medicine at Harvard Medical School, are co-founders of PNHP.
George Lauer is California Healthline features editor.