As the so-called migrant caravan inches its way towards the southern border of the United States, the participants in the march frequently cite poor job prospects and criminal violence as their reasons for seeking the American Dream. Another issue that may have them on the march is the relative lack of adequate health care in Central America, which is the region that is contributing most of the current wave of migrants. Should they cross into the United States illegally, their health care will be borne by Americans by as much as $18.5 billion a year. Of this amount, federal taxpayers provided $11.2 billion in subsidized care to unauthorized immigrants in 2016.
If any of the women currently in the migrant caravan cross illegally into the U.S. and should bear a child while on American soil, even in detention, the resulting child automatically obtains U.S. citizenship and would be eligible for health care through Medicaid and other sources. Health care would include pre-natal consultations and actual delivery of the baby. Food stamps and housing are other benefits for which they may be eligible. American citizens, once they are of age, can petition for their foreign parents to obtain legal residence and eventual citizenship.
Even while it is current federal policy to prohibit taxpayer funded health care to illegal immigrants through Medicaid or Obamacare, there are estimates that the approximately 3.9 million uninsured illegal immigrants are given $4.6 billion in health services paid by for by federal taxes. Another $2.8 billion in health services are financed by state and local taxpayers, while $3.0 is covered by "cost-shifting" (higher payments paid for by insured patients to cover hospital uncompensated care losses), as well as approximately $1.5 billion in medical care donated by physicians. This health care is not provided through fraud, but through various direct and indirect means from federal funds.
Besides these outlays, illegal immigrants may also get at least another $0.9 billion in federal subsidies due to the tax exemption for nonprofit hospitals and another $5.7 billion in tax expenditures from the employer tax exclusion.
Therefore, American citizens and legal residents cross-subsidize health care for illegal immigrants at the rate of $18.5 billion a year. In 2016, federal taxpayers funded illegal immigrants $11.2 billion in subsidized care.
Despite federal policy to prevent the use of federal tax dollars to fund health care for illegal immigrants, except in extreme cases, through Medicare and the Affordable Care Act (Obamacare)), there remain other means for federal funds to be used for providing health indirectly to illegal immigrants.
- Under Medicaid and the Children's Health Insurance Program (CHIP), no federal funds may be expended on illegal immigrants, except for certain specified emergency services. “Medicaid payments for emergency services may be made on behalf of individuals who are otherwise eligible for Medicaid but for their immigration status. These payments cover costs for emergency care for lawfully present immigrants who remain ineligible for Medicaid as well as undocumented immigrants."
- However, the various state use use state-only Medicaid programs to cover health care for illegal aliens. California's Health for All Kids Act, for example, provides access to health care to illegal immigrant children through Medi-Cal, the state Medicaid program. California is the largest state to state-only funding to provide coverage to all children regardless of immigration status. In this, it is in league with Illinois, Massachusetts, New York, Washington, and District of Columbia.
- While the intent of restrictions in Medicaid and the Affordable Care Act may be clear, there are work-arounds that allow health care for illegal immigrants to be indirectly funded using federal funds by hospitals. For example, “disproportionate share” payments (DSH) indirectly benefits illegal immigrants. According to the Kaiser Family Foundation, these “disproportionate share” hospitals are those that serve Medicaid and low-income uninsured patients. “At the facility level, Medicaid DSH payments are limited to 100 percent of the costs incurred for serving Medicaid and uninsured patients that have not been compensated by Medicaid (Medicaid shortfall)." This means that the DSH program pays back a hospital's aggregate loses due to health care that was not compensated by uninsured patients. Therefore, federal Medicaid funds indirectly subsidize care for illegal aliens even though it is illegal to pay for their care by direct recipients of Medicare assistance.
- Similarly, Medicare DSH payments also serves as a subsidy to offset aggregate losses due to uncompensated care while drawing no distinction between uncompensated costs caused by illegal immigrants and those produced by American citizens or legal resident aliens. Hospitals exercise market power by charging private patients at a higher rate than Medicare or Medicaid patients. Therefore, hospitals can use profits gained from private patients for uses that include the provision of charitable care.
- Federally qualified community health centers provide primary health care, dental care, mental health and pharmacy services. Anyone who comes in the door receives treatment, regardless of ability to pay or immigration status.
- Nonprofit hospitals (and other health care providers) effectively receive tens of billions of dollars every year in benefits from the federal tax exemption, which include public and charitable contributions, forgone taxes, and the value of tax-exempt bond financing. Among those benefiting are illegal aliens.
- Physician charity amounts to $1.5 billion or an average of $1,750 per year for each of the country's 855,000 active physicians. Physicians receive no tax benefits for providing charity care, being unable to write off the cost of charity care from their personal or business taxes.
According to Pew Research Center, there were 11.3 million unauthorized immigrants in the U.S. in 2016. As of then, 14 percent of the uninsured (3.9 million) are illegal immigrants who are thus ineligible for both Medicaid and ACA coverage under federal law. Meanwhile, approximately 70 percent of health care for the uninsured is uncompensated, which means that government and others bear the burden. In 2013, the country’s uninsured created $84.9 billion in uncompensated care costs. Of this amount: 39 percent was covered by the federal government; 23 percent by state and local governments; and 12 percent was covered by physician charity care covered; while 25 percent was covered by hospitals through “cost-shifting" i.e., higher charges to privately insured patients that effectively cross-subsidize care for patients who do not pay their bills. Some fraction of this is due to the federal Emergency Treatment and Active Labor Act (EMTALA), which requires hospitals to treat emergency patients regardless of ability to pay.
Assuming illegal immigrants received a pro rata share of such support (i.e., 14 percent), they account for the $11.9 billion in uncompensated care costs, financed as follows:
$4.6 billion--federal taxpayers
$2.8 billion--state and local taxpayers
$3.0 billion--hospital charity care/bad debts arguably cost-shifted to private patients
$1.5 billion--physician charity care