With comprehensive immigration reform in the national spotlight this week, one talking point already being parroted by reform critics is that any overhaul that incorporates a pathway to citizenship for undocumented immigrants will eventually make President Obama’s landmark health care law much more expensive by adding millions of low-income immigrants onto Medicaid rolls or making them eligible for Obamacare’s private insurance subsidies. But don’t buy the hype — having these prospective Americans insured and paying into America’s tax and health care systems will be good for public health, personal health care costs, and — consequently — overall spending on health care entitlements.
The fact is, undocumented immigrants already receive subsidized care under Medicaid — but only for life-saving emergency room procedures. Those treatments are much more expensive than the primary and preventative care services that undocumented immigrants tend not to seek due to a lack of coverage, and forgoing that preventative care leads to a snowball effect in which undocumented immigrants only pursue “sick care” rather than health care, which raises health care costs for everybody by producing a more unhealthy population whose care is actually subsidized by the rest of the country.
Studies have estimated that America’s 11 million undocumented immigrants cost federal and state governments $10.7 billion in annual health care expenditures. While there isn’t an abundance of solid data on how much those costs would be lowered by placing the immigrants onto actual insurance rolls with comprehensive coverage, chances are that it would mirror trends in general health care spending on the insured versus the uninsured. Public safety net hospitals have estimated that states that do not participate in Obamacare’s Medicaid expansion will cost them over $50 billion by 2019, since uninsured and under-insured Americans cannot afford to compensate hospitals for the care they receive — and that shortfall is ultimately shifted onto the American taxpayer. Having these consumers become legal residents would allow them to pay into the system and actually pay for the benefits that they receive.
Immigration reform and a pathway to citizenship would also bode well for Obamacare’s subsidies and future Medicare spending. Bringing undocumented immigrants into the legal tax system would raise about $5 billion in new revenue in just three years — and potions of those revenues would go towards funding immigrants’ Medicare, Social Security, and Obamacare’s insurance subsidies. Furthermore, there is overwhelming evidence that people who receive quality health care and preventative services early on in life enjoy greater health — and therefore lower health care costs — in their twilight years. That’s especially significant considering that the bulk of expensive medical spending occurs in the last years of a person’s life.
At the end of the day, adding more legal immigrants and — eventually — American citizens onto Medicare, Medicaid, and Obamacare’s insurance subsidies will temporarily expand health care spending. But it also addresses the actual roots of health care inflation — namely, that people do not pursue enough preventative care early on in their lives and thus raise their treatment costs later on, and that many poor and uninsured people cannot compensate doctors and hospitals for the emergency care that they receive. By patching those elements of the social safety net, comprehensive immigration reform would actually lower long-term health care costs in America, and strengthen the social safety net.