ObamaCare Subsidies for Illegal Aliens?

Health Affairs is a reliable barometer of the direction of mainstream health policy. The following is from the abstract of a May 2014 article:

iStock_000004348658XSmallUndocumented immigrants were excluded from the health benefit Marketplaces created by the Affordable Care Act partly because of claims that they contribute to problems such as high costs and emergency department (ED) crowding. This article examines the likely health care use and costs of undocumented immigrants in California in 2009-10. Using data from the 2009 California Health Interview Survey (CHIS), we developed a model that estimated the state’s adult and child undocumented immigrant population…We found that undocumented immigrants in California, and the uninsured among them, had fewer or similar numbers of doctor visits, ED visits, and preventive services use compared to U.S. citizens and other immigrant groups. Allowing undocumented immigrants to purchase insurance in the Marketplaces and ensuring receipt of low-cost preventive services can contribute to lower premiums and reduce resource strains on safety-net providers.

Aside from the inaccurate representation of the reasons why people who receive subsidized policies through ObamaCare must be legal U.S. residents, the authors claim that premiums will fall if the uninsured are covered. They do this despite the fact that a number of solid studies indicating that providing coverage typically increases utilization by roughly 30 percent. (See the results on emergency department and outpatient utilization from the Oregon Medicaid experiment, Anderson et al. on the relationship between the probability of having health insurance and emergency department visits and inpatient admissions, and the RAND Health Insurance Experiment on utilization differences between “free” coverage and high deductible coverage.)

We also know that covering “low-cost preventive services” with insurance increases premiums, especially when men have to pay for mammograms.

Given the extent of taxpayer subsidies for the “Marketplaces,” it might be less expensive and more effective to repeal the individual mandate, institute a tax credit for proof of insurance coverage, and reimburse safety net institutions based on the estimated fraction of uninsured people in their catchment area.

Comments (13)

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  1. Devon Herrick says:

    It’s a political issue. Undocumented workers tend to be uninsured. Many came from cultures without a history of pre-paid health care. Most simply haven’t bought into the notion that families should spend half their annual income on something they will hardly use (I don’t blame them).

    Here is the bottom line: if you’re healthy enough to work, you are probably cheap to insure. If you are the children of someone working in the country illegally, you are cheap to insure. Various studies have found illegal immigrants tend to be healthier than the native population. They are not a cause of high ER use and costly charity care. They are also the only non-religious group that is exempt from the individual mandate.

    • John R. Graham says:

      Yes, why would “allowing” undocumented immigrants to buy health insurance in the exchanges cause them to do so?

      Covered California, the state-run ObamaCare exchange, did not hit its enrollment numbers for legally resident Latinos.

      If Latinos who are legally in the U.S. have figured out they don’t need ObamaCare, the likelihood of those illegally here deciding they need it is surely much smaller.

      • Devon Herrick says:

        Most wouldn’t buy coverage if allowed to in the exchange. Actually, I would argue that illegal immigrants got a better deal than native born residents — who are required to have health coverage.

        The idea that every family should spend $16,000 annually on a health insurance plan is ridiculous. A lot of hard-working immigrants understand what a fallacy this is. I have always maintained that if workers really understood they were indirectly paying the premiums for generous employer plans, far more families would revolt and demand they be allowed to handle the funds. Self-employed entrepreneurs are far more likely to have high deductible plans with HSAs because they understand the trade-off between high premiums and low-deductibles.

        Americans have been conditioned to believe good jobs provide health coverage and comprehensive health insurance is something people should have. If there is one myth that was resulted in runaway medical inflation, that is probably it!

    • Patterson says:

      True. They come to the U.S. for extra coins. Many have no excess money to buy pre-paid health care. Providing them cheaper insurance plans is of humanitarian. However, this practice is unfair for those documented aliens who have contributed a lot for this country. It may lead to more and more undocumented aliens.

  2. Thomas says:

    “…it might be less expensive and more effective to repeal the individual mandate, institute a tax credit for proof of insurance coverage, and reimburse safety net institutions based on the estimated fraction of uninsured people in their catchment area.”

    Now there is a sound idea. And one that does not force an individual to purchase insurance, but gives a strong incentive to do so.

  3. Big Truck Joe says:

    Of course illegal immigrants won’t pay for Obamacare policies – that’s why we have Medicaid. But don’t worry, I still have a job. I’ll pay for them all.

  4. Bill B. says:

    Health insurance is likely not very high on the totem pole for immigrants. The money that they earn, they view as being much more valuable than to throw down the hole for health insurance. Even if they were allowed to, they would have little incentive to sign up.

  5. Steve says:

    The next political maneuver will be to claim that Obamacare subsidies need to be given to those here illegally because it would be the “humanitarian” thing to do. But would it also be “humanitarian” to force them to buy a product such as health insurance, like the rest of us have been forced to?

  6. Rich Berger says:

    I guess Joe Wilson was prescient.