US immigration beneficial for health funding, studies find

Two new studies claim that US immigration is beneficial for health care funding. Research released by bipartisan group New American Economy, found that immigrants contribute more to Medicare and private insurance than is spent on them. The two new reports analyzed immigrants and health care finances at a time when immigration remains a hot political issue.

It was noted that the reasons behind the findings were ‘complex’, but generally it was found that immigrants tend to be younger and healthier, on average, compared to the general US population. Meanwhile, they are paying into health care funding systems via payroll taxes and insurance premiums, but using fewer health care services, according to the reports.

The reports claim that immigrants help to keep Medicare solvent, which has been one of the major issues of health care funding in the US. One of the biggest pieces of the Medicare puzzle has been the Hospital Trust Fund, according to the studies. The Trust Fund helps to finance hospital and nursing home coverage.

Immigrants contribute billions

The two new studies found that immigrants had contributed billions more to the Trust Fund between 1996 and 2011 than was spent on the same group of people, which helped to keep Medicare solvent. According to the study, this trend has continued in recent years.

An excerpt from the New America Economy report said: “Between 2012 and 2018 immigrants contributed an average of $165.52 more per capita annually to the Medicare Trust Fund than Medicare spent on their behalf. Over the same time period, the US-born cost the Trust Fund an average of $51.46 per capita, as more was spent on their behalf than was contributed.”

Clarifying the figures, the report stated that immigrants in the US paid out $151 billion more in Medicare taxes than they used for Medicare services during the six-year time period specified. Meanwhile, over the same period, US-born citizens used $98 billion more in Medicare services than they contributed to the Medicare Trust Fund. 

Private insurance

The second report states that it’s a similar story with private insurance, with data showing that immigrants spent more than $1,182 per year on health care insurance premiums than insurers spent on their care.

According to the report, the reason for this is that immigrants tend to utilize health care services less often than native-born Americans. This has been especially true throughout the coronavirus pandemic, with many undocumented immigrants reluctant to seek medical help for fear of it affecting their US immigration status.

The study did highlight that undocumented immigrants do not qualify for government plans, such as the Affordable Care Act, so employer-sponsored plans are one of the few routes they have to obtain health insurance.

The report said that workers tend to be younger, which may explain in part their lower health care costs. In general, the second report found the same dynamic seen with Medicare spending was also true for private plan spending on immigrants. 

An excerpt from the second report said: “By calculating the private health insurance premiums paid by, or on behalf of immigrants, and the amounts that private insurers spent for their care, it was estimated that between 2008 and 2014 immigrants contributed $174.4 billion more in premiums than insurers paid out for their care, while, in aggregate, insurers incurred a net loss on the coverage of US-born persons.”

US immigration funds health care

The two studies concluded that US immigration is helping to fund the health care requirements of US-born nationals and that reducing immigration to the US would increase insurance premiums for Americans.

“These findings contradict claims that persons born in the United States subsidize the medical care of immigrants. These claims have focused on immigrants’ use of uncompensated care and Medicaid,” the research said.

“However, they ignore the fact that immigrants contribute large subsidies to Medicare’s Trust Funds, and, we find, that immigrants also provide tens of billions in cross-subsidies annually to US-born enrollees in private group insurance plans that cover many immigrants, along with US-born persons,” the research added.

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