Did you know that thanks to Democrat policies, and America being over-run by illegal aliens, that illegals sponge off the American taxpayer to the tune of $18 BILLION a year in free health care?
Gee, that’s enough to build a wall covering the entire southern border.
Current federal policy is to prohibit federal tax funding of health care to illegal aliens through either Medicaid or Obamacare, but there’s a catch. Actually lots of them.
Rough estimates suggest that the nation’s 3.9 million uninsured illegal aliens who are unauthorized likely receive about $4.6 billion in health services paid for by federal taxes, $2.8 billion in health services financed by state and local taxpayers, another $3.0 bankrolled through “cost-shifting” i.e., higher payments by insured patients to cover hospital uncompensated care losses, and roughly $1.5 billion in physician charity care, reports WSJ.
In addition to these amounts, illegal aliens likely benefit from at least $0.9 billion in implicit federal subsidies due to the tax exemption for nonprofit hospitals and another $5.7 billion in tax expenditures from the employer tax exclusion.
All told, Americans cross-subsidize health care for illegal aliens to the tune of $18.5 billion a year . Of this total, federal taxpayers provided $11.2 billion in subsidized care to unauthorized immigrants in 2016 .
The purported intent of federal policy is to prevent federal tax dollars from being used to fund health care for illegal aliens except in extreme circumstances. Notwithstanding express prohibitions contained in the statutes related to Medicaid and Obamacare, there also are companion federal programs that permit federal funding to be used for health care of unauthorized immigrants indirectly.
Medicaid. Under Medicaid and CHIP (Children’s Health Insurance Program), no federal funding may be used to cover illegal aliens, except for payment for limited emergency services. Specifically, “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 illegal aliens.”
Moreever, states can and do use state-only Medicaid programs to cover such individuals.
For example, California’s Health for All Kids Act provides illegal alien children with access to coverage through Medi-Cal, the state Medicaid program. Its passage in 2015 made California the largest state to use state-only funding to provide coverage to all children regardless of immigration status; in doing so, it joins New York, Illinois, Massachusetts, Washington, and the District of Columbia.
ACA. Under the ACA, immigrants must be lawfully present to purchase insurance in a Qualified Health Plan, or to be eligible for an Advance Payment for Premium Tax Credit or Cost-Sharing Reduction.
Under legislation signed by Governor Jerry Brown in June 2016, California would have been the first state to allow illegal aliens to purchase health plans through its insurance exchange without fear that their information would be shared with other government agencies.
The law directed California’s exchange, Covered California, to apply for a State Innovation Waiver to allow people who would be eligible for the exchange if not for their immigration status to purchase California Qualified Health Plans (QHPs), which provide benefits identical to those included in other ACA-compliant QHPs. This policy requires a waiver because it involves an alteration to the original terms of the ACA, which bars the participation of illegal aliens in state exchanges. However, this waiver request was withdrawn on January 18, 2017.
Where Use of Federal Dollars to Fund Health Care for Illegal Aliens is Indirectly Permitted
The “clear intent” of restrictions embedded in Medicaid and Obamacare is undercut by several end-arounds that allow health care for illegal aliens to be indirectly funded using federal dollars.
Medicaid DSH Payments.
First, there is a source of Medicaid financing that indirectly benefits unauthorized immigrants: DSH payments. Kaiser Family Foundation reports “DSH, or “disproportionate share” hospitals are hospitals that serve a large number of 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).” The DSH program simply provides a general subsidy against a hospital’s aggregate uncompensated care losses from uninsured patients.
Nothing requires hospitals to back out their spending on uncompensated care for illegal aliens from their aggregate losses; consequently, federal Medicaid funds end up indirectly subsidizing their care even though it would be expressly illegal to pay for their care by making them direct Medicaid recipients.
Medicare DSH Payments. In a similar fashion, although the formula is much more complicated, Medicare also pays hospitals a DSH payment that effectively serves as a general subsidy to offset aggregate uncompensated care losses without making any distinction between uncompensated costs generated by illegal aliens and those generated by American citizens or legal immigrants.
Community Health Centers. Federally qualified health centers provide primary healthcare, dental, mental health and pharmacy services. They treat all comers without concern for immigration status or ability to pay for care.
Tax Exemption. Nonprofit hospitals (and other health facilities) receive tens of billions of dollars annually in benefits from the federal tax exemption including forgone taxes, public charitable contributions, and the value of tax-exempt bond financing. illegal aliens benefit from this federal largesse.
Employer Tax Exclusion. The employer tax exclusion provides an indirect federal tax subsidy to everyone with employer-sponsored health insurance. Noncitizen immigrants are admittedly less likely to have such coverage than natives, but the differential is less than 10 percentage points after adjusting for the most important demographic/socioeconomic characteristics.
Current Funding for Health Care of Illegal Immigrants
Uninsured illegal aliens.
According to Pew Research Center, there were 11.3 million illegal aliens in the U.S. in 2016. Currently, 14% of the uninsured (3.9 million) are illegal aliens who are ineligible for both Medicaid and ACA coverage under federal law.
Focusing principally on financing health care for illegal aliens who are uninsured since we know that about 70% of care for America’s uninsured is uncompensated, meaning that ultimately it is paid for by society in one way or another.
Specifically, in 2013 (the latest available such figures), America’s uninsured generated $84.9 billion in uncompensated care costs or $1,257 per person who was ever uninsured that year.
39% was covered by various federal programs (e.g., disproportionate share payments to hospitals);
23% by state and local governments (e.g., via taxpayer support of state and locally owned hospitals);
12% came in the form of physician charity care covered;
25%–was covered by hospitals (arguably by “cost-shifting” i.e., higher charges to privately insured patients that effectively cross-subsidize care for patients who do not pay full freight etc.). An unknown fraction of this stems from EMTALA–the Emergency Treatment and Active Labor Act–a federal law that requires hospitals to treat emergency patients regardless of their ability to pay. EMTALA is an example of “taxation by regulation” insofar as the same outcome might have been achieved by using tax dollars to pay hospitals to treat such patients voluntarily.
Assuming unauthorized immigrants received a pro rata share of such support (i.e., 14%), 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
When we sum all the figures, including $11.9 billion for the uninsured and another $6.6 billion in tax subsidies, we arrive at a grand total of $18.5 billion in subsidized health care for all unauthorized immigrants in 2016. This amounts to $57 per U.S. resident. The share that concerns me the most–$11.2 billion borne by federal taxpayers–amounts to $34 per U.S. resident.
Mr Americana, Overpasses News Desk