The Real Cost of ‘Free’ Health Insurance for Illegal Immigrants

At the June 27 Democratic presidential debate, all of the candidates endorsed giving government health benefits to illegal immigrants, but there was no discussion of exactly how that would work or how much it would cost. In addition, according to a subsequent survey by The Atlantic, Bernie Sanders, Kamala Harris, Elizabeth Warren, Cory Booker, and Julian Castro all would “provide full benefits to the undocumented.” On the other side of the spectrum just two Democratic hopefuls, Michael Bennet and Joe Biden, suggested only allowing illegal immigrants to buy unsubsidized insurance on the healthcare exchanges.
In response to these proposals, the Center for Immigration Studies has issued two new reports. The first report details the participation rate and cost of Medicaid usage by immigrants under existing policy, which offers noncitizens less access to the program compared to citizens. This second report explores the added costs of offering public health benefits to illegal immigrants.
For the first report, which looked at the cost of Medicaid usage under existing policy, CIS found that despite restrictions on access, immigrant individuals use Medicaid at the same 23 percent rate as native individuals. In addition, Immigrant children (of whom there are relatively few) appear less likely to use Medicaid than native children, but the difference is not statistically significant.
As for the cost, Immigrant adults are significantly more likely to enroll than native adults. An especially large and significant disparity exists among the elderly, probably because some immigrants are not eligible for Medicare. In general, immigrants from Latin America and immigrants without a college degree have above average rates of Medicaid enrollment, while enrollment rates for immigrants with a residency of at least 10 years do not substantially differ from rates among immigrants overall.

Native individuals cost insignificantly more than immigrant individuals on a per-capita basis. Among families, however, immigrants are significantly costlier, with an average Medicaid charge of $2,796 compared to $1,983 for native families. The costliest subgroup is Hispanic immigrant families at $4,411.
As for the second report, CIS estimates there are 4.9 million illegal immigrants who have incomes below 400 percent of the poverty threshold and who do not have insurance. This is the cutoff for premium subsidies. We run two scenarios: In Scenario 1, CIS estimates the cost if illegal immigrants receive ACA subsidies only. In Scenario 2, CIS examines the cost if the lowest-income illegal immigrants receive Medicaid, while the higher-income illegal immigrants receive ACA subsidies. Below is a graph that represents this data:

CIS’s analysis indicates that allowing uninsured, low-income illegal immigrants access to these programs would likely cost taxpayers around $10 billion per year, assuming many chose not to enroll, with costs potentially rising as high as $23 billion.
The report concludes:
Numbers aside, the fact that presidential candidates are advocating spending billions of dollars on people who are in the country illegally is significant in its own right. It suggests that allowing in large numbers of less-educated workers will inevitably generate significant political pressure to provide them access to social programs. If there is significant political pressure to provide coverage to people in the country illegally, it seems almost certain that over time pressure will grow to provide healthcare to low-wage guest workers and other “temporary” immigrants as well. The high cost of providing healthcare to less-educated workers who earn modest wages is a reminder that tolerating illegal immigration or allowing such workers into the country legally is likely to create a significant burden for taxpayers.
This article is from two recent reports done by the Center for Immigration Studies. You can find the first report, here, and the second report, here.