Financing Healthcare for Unauthorized Immigrants

 

Your federal tax dollars are financing unauthorized (illegal) immigrant healthcare. In my last post, How Taxpayers Finance Health Care for Unauthorized Immigrants, I explained the ways this is happening. Today we’ll discuss the pros and cons of the current system.

Chris Conover, healthcare economist at Duke University, says the current policy allows states and local governments to use their resources (their tax dollars) to make exceptions to federal programs that exclude unauthorized immigrants. That means liberal states like California, New York, Massachusetts, and Washington can choose to encourage such immigrants by providing free health care, while more conservative states can choose not to provide such support.

This is not a matter of compassion for the needs of such immigrants but rather a matter of political ideology. Democrats have long avoided policies that discourage illegal immigration because they see these people are useful political foils and probable future Democratic voters. Republicans prefer to discourage illegal behavior and wasteful spending of precious resources on those who have entered this country illegally and don’t have the means to pay for their care.

But the truth is that society will have to absorb the cost of unpaid healthcare one way or the other. This is precisely why encouraging the immigration of anyone who cannot support himself or herself is bad policy.

Current Funding for Health Care of Illegal Immigrants

According to the Pew Research Center, there were 11.3 million unauthorized immigrants in the U.S. in 2016. Of these, 3.9 million (34%) are ineligible for Medicaid or ObamaCare coverage under federal law. (The rest are presumed to be receiving employer-provided healthcare insurance.)

America’s uninsured, as of 2013 (latest figures available), generated $84.9 billion in uncompensated care costs, or $1,257 per person.

  • 39% was covered by various federal programs (DSH payments to hospitals)
  • 23% was covered by state and local governments
  • 12% came in the form of physician charity care
  • 25% was covered by hospitals (cost-sharing)

 

What would happen if federal and state taxpayers refused to subsidize the healthcare of unauthorized immigrants?

  • Hospitals might raise their charges – This might allow them to pay for some of the expense, but is limited by the ceilings for charges established by federal programs such as Medicaid and Medicare and by commercial insurance plans.
  • Hospitals might spend less on non-essentials and discourage unauthorized immigrants from using their facilities – There is no doubt hospitals could be more frugal and build less-expensive facilities.
  • Physicians would provide more charity care – There is a long-standing tradition in the medical community of providing such care and it will continue regardless of federal policies.
  • Patients might have to pay more ­Paying patients would likely absorb more of the expense of uncompensated care through higher payments for their own care.
  • Voters would likely demand more accountability in immigration policies – If the cost of paying for healthcare for illegal immigrants was borne by voters, there would likely be pushback against those politicians who favored illegal immigration. This is precisely why Democratic politicians pay lip-service to fixing the illegal immigration problem yet undermine every effort to actually solve the problem.

 

How much does it cost you to pay for healthcare for illegal immigrants?

I asked you this question in the previous post that introduced this discussion. The actual number, based on an expense of $18.5 billion per year paid for by 324 million Americans, is $57 per resident. The portion paid by federal taxpayers, $11.2 billion, is $34 per U.S. resident.

That seems like very little money; perhaps not an issue worth fighting about. But Conover reminds us it is just that sort of thinking that has led us to today’s dismal reality that unfunded liabilities facing our country are now estimated at roughly $200 Trillion and rising. (Our annual budget is about $4 Trillion.)

There you have it – the pros and cons of our current system. But is there a better way? Stay tuned for more on this issue in the future.

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