Mass Immigration: The Costs and Availability of Health Care

One of the most troubling economic trends of recent years has been the rise in health care costs. Health related spending is rising about 7.3% per year – doubling every ten years. As a share of the economy no country spends more on health care than the U.S.

Medical insurance pays about three-quarters of all health-care costs in the U.S. Unfortunately, insurance premiums are rising so rapidly that many middle-class Americans cannot afford coverage. According to the Census Bureau, about 44 million people were without health insurance in 2002. Since 1992 more than 10 million people have joined the ranks of the uninsured.

Explanations of the health insurance crisis usually focus on actions of employers, the aging population, consolidation among health insurance companies, and cutbacks in government medical programs. The role of mass immigration is rarely discussed, but data show that immigrants have had an enormous impact on the size and growth of the uninsured population in the United States.

About one-third of immigrants lacked health insurance in 2002. That is nearly three-times the uninsured rate of native-born Americans (12.8%). More importantly, in recent years immigrants have accounted for all of the rise in the uninsured: From 1997 to 2002 the number of uninsured immigrants rose by 2.2 million, to 11.2 million, while uninsured native born fell by 2.0 million, to 32.4 million.

Why are immigrants uninsured? Many are poorly educated, ending up in jobs that pay poverty-level wages and few benefits – including health insurance. What’s worse, immigrants often displace native workers, who suddenly find themselves without health benefits. Meanwhile all employers, even those in white collar industries with few immigrants, face skyrocketing health insurance costs because they are forced to pay, indirectly, for the uninsured.

Uninsured people receive pretty much the same medical care available to people who pay for health insurance. Their medical costs are paid for by government programs, which means that taxpayers foot the bill. Even illegal immigrants, many of whom pay no taxes, are eligible for publicly funded medical care.

Efforts to resolve the health insurance crisis without addressing the role of mass immigration are doomed to fail.

– Edwin Rubenstein, M.A. (Public Finance)
President, ESR Research, Economic Consultants
www.esrresearch.com
(Director of Research at the Hudson Institute 1997-2002)

Endnotes:

For a comprehensive overview of the uninsured population, immigrant and native, see: Institute of Medicine, “Coverage Matters: Insurance and Health Care,” National Academy of Science, 2001. http://books.nap.edu/html/coverage_matters/ch3.html

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