How do and will immigrants get health insurance?

The Migration Policy Institute has issued a thoughtful analysis of how immigrants, both legal and illegal, obtain health insurance.
Locally and nationwide, roughly two-thirds of working-age immigrants who are legal residents are insured, and more than one-third of illegal immigrants also have insurance.
The report says, “We estimate that half of LPRs [legal permanent residents] overall currently have employer coverage and one-third (3.9 million) are uninsured, accounting for 9 percent of the overall uninsured population. Almost all uninsured LPRs (93 percent) are adults, so the cost of providing coverage to uninsured LPR children (who are twice as likely as US-born children to be uninsured) would be quite low.”
What about illegal immigrants? The report says, “There are an estimated 12 million unauthorized immigrants in the United States. They are ineligible for Medicaid and other means-tested federal benefits, though hospitals may be reimbursed through Medicaid for providing emergency services. Notwithstanding the recent political furor over the issue, none of the pending legislative proposals would provide coverage for unauthorized immigrants. However, verification systems to screen them out of subsidies and the proposed insurance exchanges may be expensive and may have unintended consequences for US citizens and legal immigrants.
“Unauthorized immigrants are disproportionately likely to have low incomes, and although most of them work, they are even more likely than LPRs (46 percent) to work at small firms that do not provide insurance. As a result, most unauthorized immigrants (6 million working-age adults and 660,000 children) are uninsured, accounting for 15 percent of the overall uninsured. Yet it is not widely recognized that 31 percent of unauthorized immigrants (some 3.2 million working-age adults and 460,000 children) already have employer coverage.”
The executive summary of the report, Immigrants and Health Care Reform What’s Really at Stake? By Randy Capps, Marc R. Rosenblum, and Michael Fix Migration Policy Institute October 2009
The health care reform legislation being drafted in Congress holds the promise of delivering coverage to millions of uninsured people in the United States through Medicaid expansion, private insurance subsidies, and mandated employer coverage. The scope and success of reform, however, will be affected substantially by lawmakers’ decisions regarding the eligibility of legal immigrants for health benefits, and their approaches to screening out unauthorized immigrants. Their decisions will help determine how close Congress comes to its goal of reducing the ranks of the nation’s 46 million uninsured.
Despite high workforce participation rates, many immigrants (regardless of their legal status) are uninsured. Yet some proposals under consideration in Congress would deny core benefits to many legal immigrants. These proposals would leave many legal immigrants outside a reformed health care system, with costly spillover consequences for taxpayers, health care consumers, and providers.


Lawmakers also intend to exclude unauthorized immigrants from any new benefits. While most agree that unauthorized immigrants should not benefit from government spending, lawmakers confront important questions about how to exclude them without creating a large and expensive screening bureaucracy and without imposing difficult verification burdens on US citizens and legal immigrants.
To guide our policy analysis, this report offers detailed new estimates, based on Migration Policy Institute (MPI) analysis and imputation of Census Bureau data, which provide a portrait of immigrants by legal status, current health insurance coverage, and variations in coverage across large immigrant states.
The report provides a roadmap of the key health reform issues, focusing in particular on two populations likely to remain at the center of policy debates: lawful permanent immigrants (LPRs) with less than five years of legal residency, and unauthorized immigrants. It addresses legal immigrants’’ eligibility for Medicaid and health insurance subsidies and their inclusion in individual mandates, and strategies for screening out unauthorized immigrants.
This analysis draws on data from the US Census Bureau’s 2008 US Current Population Survey, Annual Social and Economic Supplement (CPS-ASEC). The data we employ include unique assignments of legal status to noncitizens created by Jeffrey S. Passel of the Pew Hispanic Center. See Jeffrey S. Passel and D’Vera Cohn, A Portrait of Unauthorized Immigrants in the United States (Washington, DC: Pew Hispanic Center, 2009). http://pewhispanic.org/files/reports/107.pdf. The assignments are necessary because the Census Bureau does not seek or report information about the legal status of noncitizens. MPI researchers conducted analysis of demographics, income, work patterns, and health insurance coverage using these data.
Snapshot of Immigrants and Their Health Care Coverage
Lawful Permanent Residents
Our estimates suggest there are roughly 12 million LPRs in the United States; 4.2 million are uninsured. These immigrants have ““played by the rules”” and waited their turn —— in some cases for many years —— to enter the United States, and they pay the same taxes and are subject to the same laws as US citizens. The 1996 welfare reform law instituted a five-year waiting period after obtaining a green card during which LPRs are ineligible for Medicaid.
A high proportion of LPRs fall into the low- to moderate-income groups targeted by health insurance reform. The vast majority has family incomes below 400 percent of the federal poverty level (FPL), the cutoff for subsidies under some legislative proposals, so purchasing private insurance would be eased by subsidies. However, lawmakers are conflicted about whether to include all LPRs in health care reform, or to leave in place the 1996 welfare reform restrictions on Medicaid. The decision to retain the five-year waiting period for Medicaid eligibility or to apply it to new insurance subsidies would affect over 1 million LPRs —— thus limiting the potential for health reform to reduce the ranks of the uninsured.
Most LPRs work, meaning that proposed mandates requiring employers to provide health insurance would improve their coverage. Yet 38 percent of LPR workers are employed by small firms (fewer than 25 employees) that likely would be exempt from employer mandates, suggesting many might not get coverage. Just 32 percent of LPRs employed by small firms are insured, compared with 71 percent of the native born working in similar-sized firms.
We estimate that half of LPRs overall currently have employer coverage and one-third (3.9 million) are uninsured, accounting for 9 percent of the overall uninsured population. Almost all uninsured LPRs (93 percent) are adults, so the cost of providing coverage to uninsured LPR children (who are twice as likely as US-born children to be uninsured) would be quite low.
Unauthorized Immigrants
There are an estimated 12 million unauthorized immigrants in the United States. They are ineligible for Medicaid and other means-tested federal benefits, though hospitals may be reimbursed through Medicaid for providing emergency services. Notwithstanding the recent political furor over the issue, none of the pending legislative proposals would provide coverage for unauthorized immigrants. However, verification systems to screen them out of subsidies and the proposed insurance exchanges may be expensive and may have unintended consequences for US citizens and legal immigrants.
Unauthorized immigrants are disproportionately likely to have low incomes, and although most of them work, they are even more likely than LPRs (46 percent) to work at small firms that do not provide insurance. As a result, most unauthorized immigrants (6 million working-age adults and 660,000 children) are uninsured, accounting for 15 percent of the overall uninsured. Yet it is not widely recognized that 31 percent of unauthorized immigrants (some 3.2 million working-age adults and 460,000 children) already have employer coverage.
Disproportionate Impact on Large Immigrant States
States with large immigrant populations stand to benefit from health care subsidies extended to LPRs. The same states will, of course, bear a disproportionate burden if LPRs in the five- year waiting period remain ineligible for Medicaid and are excluded from insurance subsidies. States with large immigrant populations could see an expansion in the use of emergency rooms and public clinics if LPRs or unauthorized immigrants are dropped from employer- sponsored insurance or other private coverage on account of health care reform. Twenty- three percent of the uninsured in California are LPRs, and an additional 23 percent are unauthorized, according to our estimates. LPRs also represent more than 10 percent of the uninsured in New York, Texas, Florida, New Jersey, and Illinois.
Implications for Health Care Reform
Health Insurance Coverage
Many LPRs cannot afford health insurance. We estimate that 3.1 million working-age adult LPRs have incomes below 150 percent of FPL and that 4.1 million have incomes between 150 and 400 percent of FPL. Almost half of these two groups (3.4 million LPRs) lack health insurance, including more than 1 million who would be excluded from subsidies if Congress were to impose a five-year waiting period. If recent LPRs were denied eligibility for Medicaid and subsidies but still subjected to individual health insurance mandates, they would face a significant financial burden.
Exclusion of recent LPRs —— as well as unauthorized immigrants —— from health insurance reform would leave large populations still dependent on emergency rooms, community health centers, and other public health facilities, and would discourage early detection and treatment of chronic conditions. Thus, some of the short-term cost savings from excluding some immigrants from health care reform would be lost through cost shifting to state and local providers. Ultimately taxpayers and health care consumers would have to pay for uncompensated care for uninsured immigrants as well as higher health care costs in the future. Moreover, because recent LPRs (and unauthorized immigrants) are relatively young and healthy, including them in health insurance risk pools could help contain costs.
It is also noteworthy that since welfare reform’s enactment in 1996, lawmakers have sought to expand coverage for legal immigrants, most recently by extending Medicaid and Children’s Health Insurance Program (CHIP) eligibility to all LPR children and pregnant women. New exclusions from subsidies in health reform legislation would reverse this policy trajectory, raising issues that Congress may have to revisit in the future.
Verification
Another critical policy issue is whether the benefits of health care reform would be reduced by expensive and ineffective verification requirements. Though meant to ensure that unauthorized immigrants cannot wrongly access benefits, a verification mandate, if poorly designed, could have the biggest impact on US citizens.
There are two basic screening models: one based on screening individual applicants before they apply for benefits, as in the Medicaid system. The other links payments to tax credits and screens legal status at the time benefits are paid, as in the Earned Income Tax Credit (EITC) program.
Individual pre-screening is a more expensive model, especially if screeners are required to check documents such as birth certificates or passports. Recent experience with Medicaid suggests fraudulent use by unauthorized immigrants is very rare, raising questions about the need for costly front-end document checks.
One concern is that verification approaches might screen out many US citizens and legal immigrants from programs for which they are eligible, or force them to face costly delays in obtaining coverage. The introduction of document checks by the 2005 Deficit Reduction Act (DRA) led to thousands of vulnerable US citizens losing Medicaid or facing delays in their coverage.
In sum, despite the complexity of the issues and the heated political debate, health care reform offers policymakers an opportunity to get eligibility and verification right —— one that should not be missed.
Eligibility screening by private employers or insurance providers outside the health insurance exchanges. Some lawmakers have also proposed requiring that employers and/or insurance providers use the E-Verify system to screen their employees or customers for eligibility based on immigration status prior to providing health insurance. E-Verify is a national database that employers can use to check the work eligibility of immigrants against the DHS and SSA databases. It is currently voluntary for most employers, but a federal requirement that government contractors check the work authorization of new employees recently went into effect, and a handful of states require that all businesses verify work authorization of new hires. As of July 2009, about 140,000 out of 7.4 million US employers used E- Verify to check the lawful status of their new employees, so rapid scaling-up of the system could present challenges.
Eligibility screening for private insurance based on immigration status would represent a significant new restriction on private insurance markets. It would also represent a substantial expansion of the E-Verify system —— something Congress has considered and rejected in the context of immigration policy. To require employers or private insurers to screen the families of employees or customers would represent an even sharper departure from the status quo, one that could affect the coverage of many of the 3.4 million US-born citizen children with unauthorized parents. Such a screening requirement would impose new costs on employers and/or insurance providers, costs that would likely would be passed on to US citizens and legal immigrants in the form of higher insurance premiums. Employer or provider screening would also result in some citizens and legal immigrants wrongly being denied coverage due to system errors or employer mistakes. Screening by private providers also raises privacy concerns and could result in increased identity theft, a problem that already affects about 10 million Americans a year.

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