Immigrants’ access to affordable health care is one of the most contested issues in the current immigration reform debate. Most advocates of comprehensive immigration reform point to the need to ensure that aspiring citizens have opportunities to access appropriate health care since such access will impact their ability to learn, to work, and to contribute to their communities. On the other end of the spectrum, anti-immigration groups tend to inaccurately emphasize that newly legalized immigrants would represent an excessive fiscal burden. This prediction is based on a misleading characterization of immigrants as “takers”—in other words, as disproportionate consumers of public resources. Several studies have shown that this is just not the case. In fact, non-citizens use public benefit programs at a lower rate than similar low-income native-born citizens. With regard to medical expenditures in particular, immigrants tend to use less health care than their U.S.-born counterparts.
On the other hand, immigrants currently make substantial financial contributions to the system, even though a large segment may not be able to use any public benefits in return. A new study conducted by researchers at Harvard Medical School and the City University of New York shows that immigrants are already disproportionately subsidizing Medicare, the national social insurance program that guarantees access to health insurance to people aged 65 and older, as well as younger people with disabilities. Between 2002 and 2009 immigrants generated surpluses of between $11.1 and $17.2 billion per year, which amounted to $115.2 billion in the entire period. Most of the surplus from immigrants, moreover, came from noncitizens who are largely working-age taxpayers. Conversely, in 2009 alone, U.S.-born people accounted for a $30.9 billion deficit. As the study asserts, “immigrants generate a surplus for Medicare primarily because so many of them are working-age adults and the group has a higher labor force participation rate, a combination that generates large payroll tax payments.”
Given the overall weight that Medicare has in the U.S. health care system, the implications of these findings are not minor. Medicare represents over 20 percent of all annual U.S. health care expenditures and its sustainability depends on a large pool of working-age adults paying into the program through payroll taxes. However, as is the case with other industrialized nations, the U.S. is confronting the challenges of an aging population. Over the next few years 77 million baby boomers (Americans born between 1946 and 1964) will be retiring; a trend that will significantly contribute to slow labor-force growth.
In this context, new immigration and the legalization of currently undocumented immigrants will be key to bolstering the system’s sustainability. Future legal immigration flows will result in the expansion of a factor of production: labor. As a recent study shows, the incorporation of new labor into the economy will lead to both economic and fiscal gains. Additionally, the legalization of undocumented immigrants will also entail fiscal benefits, since legalized immigrants will be paying more taxes based on their projected wage expansion.
While immigration and legalization alone cannot make up for the funding shortfalls of Social Security and Medicare, they can definitely make the deficits less severe. Immigrants—and particularly noncitizens—are already subsidizing Medicare. Wouldn’t it make sense, not only from a moral but also from an economic perspective, to ensure that immigrants also have access to health care? If the funding of a main component of our health care system will increasingly rely on a foreign-born labor force, shouldn’t we find stronger ways to ensure that those much-needed workers are in good health?
FILED UNDER: Economics, Healthcare, Immigration Cost, Insuring Immigrants