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The Practical Case For Extending Benefits To ‘Really, Really Poor’ Immigrants

By Andrea Nill Sanchez  

"The Practical Case For Extending Benefits To ‘Really, Really Poor’ Immigrants"

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j0405208Earlier this week, the Atlantic’s Megan McArdle claimed that because most undocumented workers are “really, really poor,” it doesn’t make economic sense to extend health benefits to them as Newsweek’s Andrew Romano and others have suggested. In the interest of preserving health care reform, including undocumented immigrants in health care reform is totally off the table and hardly anyone is suggesting that it shouldn’t be. But it’s worth taking the time to challenge McArdle’s final assertion because the points that prove she is fundamentally wrong also help make the case for extending benefits to “really, really poor” legal immigrants — who are also in danger of “being thrown under the bus.”

McArdle argues that “illegal immigrants really don’t have a lot of money to shell out in premiums,” so adding them to the pool only lowers the average, but not the total cost of health care. “It still costs you extra money to care for each undocumented worker,” explains McArdle. She also adds that since most employers already hire undocumented immigrants “off the books,” then “adding a requirement that they pay imaginary health insurance…will probably not much faze them.” All of this leads McArdle to conclude, “this is not all that likely to be a net fiscal benefit.”

McArdle’s final analysis might prove true in the short-term, but in the long-run it’s deeply flawed. Any investment in preventive care services will ultimately help control health care costs by successfully preventing and managing expensive chronic conditions. This is especially true for uninsured immigrants (along with anyone else who can’t afford health care) who end up going to the hospital as a last resort on the taxpayer’s dime. More simply put, “society already pays the price for treating them. But it pays in the least efficient way.”

Even if McArdle’s assumptions prove correct, it’s still unclear whether the benefits that come from not covering undocumented immigrants and restricting coverage for legal immigrants will offset the costs. Citizenship verification mechanisms can be extremely expensive to implement, and often block more eligible citizens than ineligible immigrants. In the case of Medicaid, documentation requirements used to prove eligibility caused thousands of eligible US citizens to lose Medicaid coverage without saving taxpayers any money: for every $100 spent by taxpayers to implement documentation requirements in six states, only 14 cents were saved. And while employers who continue to hire and pay undocumented immigrants under the table would remain unfazed if undocumented immigrants were included in health care reform, between one-half and three-quarters of undocumented immigrants work “on the books,” according to the Immigration Policy Center. McArdle also overlooks the fact that excluding undocumented immigrants will likely make them more attractive as a source of even cheaper labor.

Ultimately, undocumented immigrants won’t receive benefits under the House and Senate health care bills, no matter how many humanitarian and practical arguments are made in favor of it. While including undocumented immigrants may spell legislative doom and political suicide, excluding legal immigrants from certain provisions is both a political liability and bad policy. TheSome believe the proposal released by Sen. Max Baucus (D-MT) today denies potentially denies individuals living below the poverty line access to state exchanges and tax credits based on the assumption that they already qualify for Medicaid coverage. There is no mention of what will happen to legal permanent residents who are barred from accessing Medicaid during their first five years in the US, though it seems unlikely their situation will change. Eric Rodriguez of National Council of La Raza points out that there is also a possibility that tax credits that will make health care affordable will be applied differently to legal immigrant households. Legal immigrants who aren’t already voters could be in the future — and their numbers are rapidly growing. It may seem convenient to ignore them now, but they won’t forget it in the elections to come.

Update

Andrew Romano and Ezra Klein defended their positions on insuring undocumented immigrants on MSNBC this morning:

Visit msnbc.com for Breaking News, World News, and News about the Economy


Update

,Sen. Max Baucus’ (D-MT) chairman’s mark to the Senate Finance Committee’s health bill states, “individuals subject to a five-year waiting period under Medicaid or CHIP are eligible for the tax credit beginning in 2013.”


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