Whereas the native-born population incurred a deficit of $28.1 billion to the Medicare system between 2002 to 2009, immigrants actually generated a surplus of $115.2 billion in the same period, subsidizing Medicare through payroll taxes and interest on those taxes. The study’s findings come at a time when Congress is debating over the healthcare provisions given to immigrants on a pathway to legalization.
As early as 1996, which saw the passage of a five-year eligibility ban on Medicaid and public benefits for new immigrants, the sentiment that immigrants burden the healthcare system has been raised over and over. Poor policy-making strategies prevailed as a result.
But the Harvard study’s authors found the opposite: On average, immigrant Medicare enrollees spent $3,923 on expenditures, whereas native-born enrollees spent $5,388. Without immigrant enrollment, “Medicare’s financial health” would “weaken” the Hospital Insurance (HI) Trust Fund, which pays for inpatient care through Medicare’s Part A.
Undocumented immigrants were unaccounted for in the study, but the authors believe that the “undercount” could be $12 billion that undocumented immigrants put into the Social Security Trust Fund, which accounts for four-fifths of payroll tax. That would leave one-fifth of the contribution, or $2.5 billion to Medicare. The undocumented population thus negates any Medicare expenditures with their generated surplus.
The surplus can be explained by a variety of factors: Immigrants may retire to their country of origin and thus be unable to collect. They may have started work too late to gain Medicare eligibility. They could also lack legal status, through which they have to wait five years to establish residency requirements as set forth by the 1996 law. By not collecting on healthcare benefits, immigrants help to lift the strain off the system.
A sore stalling point for Republicans in drafting the House immigration bill has been that undocumented immigrants cannot have access to certain healthcare benefits. Yet this research, the latest in a slew of studies serves to dispel the notion that immigrants burden the Medicare system. Rather as this study showed, immigrants are preventing native-born Medicare beneficiaries from collapsing the HI trust fund.