On Tuesday, the California state Senate voted 28-11 to approve a bill that would significantly expand healthcare access to many undocumented immigrants. If other states—and the federal government—were smart, they would follow suit and implement policies that go even further and make it easier for unauthorized immigrants to pursue medical treatment by giving them access to government healthcare programs.
The version of SB 4 that passed the chamber was a significant dilution of the original proposal, which would have expanded Medi-Cal (the state's Medicaid program) to undocumented residents of the Golden State. Instead, the scaled-back bill focuses on extending full Medi-Cal coverage to up to 240,000 undocumented minors age 19 and below, and coverage to some low-income adults through the creation of an alternative program that provides benefits akin to Medi-Cal. Undocumented immigrants whose earnings are higher would be able to buy private insurance through Covered California, the state's Obamacare marketplace—but with some major caveats: They would not qualify for the premium tax credits available to other Obamacare plan purchasers, and they would have to receive permission from the federal government to purchase a plan at all.
This is, to understate things, a controversial proposal. It's rife with the passions endemic to any discussion that mashes the politics of illegal immigration with the policies of the welfare state. And it's still unclear whether or not Gov. Jerry Brown (D), who has tamed California's budget crisis in part through a controversial cut to Medicaid reimbursements, would sign the bill given his concerns over its $740 million annual tab —or whether it would even reach his desk, since the state Assembly still needs to take up the measure.
But California legislators have the right idea here, and the unwillingness of lawmakers from both sides of the aisle to admit the logic of extending government healthcare programs to this population says more about the dysfunctions of our political discourse than it does about prudent healthcare policy.
1. The future uninsurance crisis will largely be driven by undocumented immigrants
The Affordable Care Act has never been a truly universal healthcare scheme given its reliance on individuals' compliance with maintaining health insurance. The Congressional Budget Office (CBO) estimates in a March 2015 report that a hefty 27 million non-elderly people in the U.S. will still lack coverage in 2025, translating to an uninsured rate of just under 10%. But excluding undocumented immigrants, the uninsurance rate drops by about 3 percentage points:
Uninsurance rate under the ACA with and without undocumented immigrants, via the Congressional... [+]
An earlier (and more detailed) CBO analysis from 2014 found that about 30% of the uninsured population in 2024 is expected to be comprised of undocumented immigrants, since these residents are barred from accessing Medicaid or private plans under Obamacare.
Recent actions in the immigration reform arena—including the now-dead reform bill that was making its way through Congress in 2013 and President Obama's consequent executive order extending temporary legal status to about 4 million unauthorized immigrants—took pains to reserve these restrictions.
2. We already pay for undocumented immigrants' healthcare
But the plain reality is that, largely barred from access or not, undocumented immigrants get sick and need care just like everybody else. And under the 1986 Emergency Medical Treatment and Active Labor Act (EMTALA), emergency rooms are barred from turning away patients irrespective of immigration or insurance status.
So who pays when an uninsured, undocumented immigrant has to go to the emergency room? And how much? This is an area that could benefit from a lot more research, although it's difficult to assess this population's true impact on the health system given the nature of its immigration status. But according to the existing literature, it's largely hospitals and taxpayers picking up the tab.
One of the more recent pieces of legislation to appropriate government funds for undocumented immigrants' healthcare services was signed into law by President George W. Bush as part of the Medicare Modernization Act of 2003, which created the Medicare Part D prescription drug benefit. According to the CBO, the law appropriated $250 million per year to help pay the cost of undocumented immigrants' emergency healthcare services between 2005 and 2008 and was heavily utilized by providers.
More lastingly, when President Ronald Reagan signed EMTALA into law, Congress concurrently authorized a special Medicaid fund that costs about $2 billion per year to help pick up EMTALA's associated costs. About half of this so-called "Emergency Medicaid" funding is currently funneled to California hospitals, while other states with large undocumented populations such as Texas, Florida, and New York spend anywhere from $200 million to $530 million on the undocumented.
But the EMTALA funds are, in the end, emergency funds. They come with caveats and restrictions and don't necessarily cover all of a provider's uncompensated care costs—and the money stops coming through once a patient is stabilized. Beyond that, hospitals are either on the hook for the bill, or a patient will be kicked out before receiving a full course of care, potentially necessitating a costly return visit to the ER. And the more costs providers must absorb, the more they'll find ways to pass those costs onto other patients.
The CBO cites one example of the true price of uncompensated care:
[I]n 2000, county governments that share a border with Mexico incurred almost $190 million in costs for providing uncompensated care to unauthorized immigrants; that figure represented about one-quarter of all uncompensated health costs incurred by those governments in that year.
Other analyses, including those by immigration reform opponents like the Center for Immigration Studies, have pegged undocumented immigrants' healthcare costs to taxpayers at about $4.3 billion per year. One obvious way to lower this burden would be to simultaneously extend healthcare access to these immigrants while also granting them legal status, making them eligible to pay into the federal income tax base and thereby allowing them to contribute to the costs of their healthcare.
3. Expanding coverage costs money—but so does shutting the undocumented out of the system
Undocumented immigrants tend to be younger than the general U.S. population. Concurrently, they tend to be healthier, meaning that if they had access to public or private insurance, their healthcare costs would be comparatively low—especially once you balance the cost of being able to get regular checkups and timely access to medical care versus letting a condition like diabetes go untreated to the point of requiring major surgery or intensive care.
The presence of a younger and healthier population in Medicaid and the Obamacare marketplaces could also bring down overall healthcare costs over the long-term by growing the risk pool with an influx of low-risk patients. I.e., after an initial surge in healthcare consumption by patients who had been forgoing care in the shadows, there's a decent chance that including undocumented immigrants in the insurance market could eventually lower overall premiums and government health spending.
Here's an excerpt from a 2013 report by the Kaiser Family Foundation underscoring this dynamic:
While there are costs associated with expanding coverage to individuals granted provisional status, there also are potential offsetting savings to consider [...] Access to timely care, including preventive care, can facilitate earlier diagnosis and treatment of conditions and improved care management, which may help prevent chronic illness and lead to less serious and costly health problems in the long run [...] Lastly, by helping individuals manage their health care, health coverage supports their ability to focus on other priorities, including employment and providing for their family, which has long-term economic benefits.
As the Kaiser report mentions, giving undocumented immigrants access to preventive and timely care is likely a prudential and cost-effective, if not outright cost-saving, strategy. Assessing the broad effectiveness of early-stage preventive and ongoing care is difficult—but there's data to suggest that a benefit exists.
For instance, an analysis by the Robert Wood Johnson Foundation finds that primary and secondary prevention (i.e., preventing the occurrence of a disease and preventing the progression of a disease) is, at the very least, often cost-effective (defined as a low ratio of incremental costs of a service to the incremental health benefits of that service) when considering Quality-Adjusted Life Years (QALYs). Immunization access and hypertension screenings, in particular, are effective interventions that actually save money:
Critics of extending healthcare benefits to undocumented populations typically fall into two camps: 1) Those who are generally opposed to expanding government-subsidized healthcare services, irrespective of whether it's for undocumented people or not; and 2) Those who point to the unfairness of subsidizing care for a population that only pays certain local and state taxes, but not federal income tax.
For the first group of people, this is a much larger debate about the very nature of the American healthcare safety net and the tenets of the welfare state. But for the latter, there is an obvious solution: Pursue a comprehensive immigration reform strategy to bring these unauthorized residents out of the shadows, and give them healthcare access that could prevent the need for much higher emergency health costs over the long run.
There's been polling to suggest that Americans (and specifically Californians) support extending health coverage for undocumented immigrants. Lawmakers in Congress and across the country should pay heed to those convictions and follow the initial step that the California Senate took on Tuesday.
