How Immigration Reform Threatens Health Reform
It’s rumored that President Obama will follow up his health-care success with a push for immigration reform.
It’s a bad idea—not least because of the negative impact the latter will have on the former.
Predicting the cost of health-care reform is hugely complex, but the core equation is reasonably straightforward. Every American will be required to buy insurance. Those who cannot afford insurance will be subsidized up to 400 percent above the poverty line, or $88,200 in annual income for a family of four. Subsidies will of course be concentrated most intensely among the poorest.
Logical enough—even if difficult to execute.
But when this health plan meets immigration policy, ominous consequences ensue.
Since 1970, the United States has accepted about 40 million immigrants, more than 10 million since the year 2000. The majority of the post-2000 immigration has been illegal.
Over recent decades, the U.S. has operated an immigration policy that—mostly by default—favors unskilled workers. Unlike the waves of immigrants who arrived in the U.S. before 1914, today’s immigrants enter a very sophisticated technological economy—and they arrive armed with little education. About 31 percent of adult immigrants in the U.S. lack a high school degree. Nor are their descendants having much success climbing the skills ladder. Among the single largest group of immigrants, Mexican-Americans, the third generation is significantly less likely to complete college than the second generation.
Today’s immigrants have a strong work ethic: In fact they are more likely to work than the native-born. But they do not earn very much when they do work. And the low-wage occupations in which they cluster typically do not offer health insurance.
As a result:
• about one-third of all foreign-born residents lacked health insurance – even before the recession;
• about one in four of the uninsured were foreign born;
• more than 70 percent of the increase in the uninsured population since 1989 is due to immigrants and their children.
Had the U.S. run a different kind of immigration policy since 1970 – had it emphasized skills, as Australia and Canada do – our health-insurance problem would be much easier and less costly to solve.
As is, the foreign-born will absorb a disproportionate share of the subsidies extended by the newly enacted health plan. If we proceed with an immigration reform that legalizes the 10 million–12 million illegal workers currently in the country, the number of recipients of health-care subsidies will soar, adding hugely to health reform’s future costs. Subsidies will be concentrated among the poorest – and immigrants are 50 percent more likely to be poor than natives.
Donald Rumsfeld used to joke: “If you don’t know how to solve a problem, make it bigger.” This is what the U.S. has been doing with its poverty problem since 1970, and it has not proved to be very good advice.
Can we quit now?
The immigration reform we need would do two things:
• attract more highly qualified immigrants who will contribute more in taxes than they consume in benefits;
• encourage low-skilled illegal immigrants to return home – “self-deportation” as it is called by immigration experts.
Self-deportation does not involve round-ups or detentions. If you tighten work requirements – deter employers from hiring illegals – illegals will return home. Since the onset of the recession, an estimated 1 million illegals have already left the U.S., even in the absence of effective enforcement.
In a recent op-ed, Sens. Lindsey Graham and Chuck Schumer described what effective enforcement would look like:
“We would require all U.S. citizens and legal immigrants who want jobs to obtain a high-tech, fraud-proof Social Security card. Each card's unique biometric identifier would be stored only on the card; no government database would house everyone's information. The cards would not contain any private information, medical information, or tracking devices. The card would be a high-tech version of the Social Security card that citizens already have.
“Prospective employers would be responsible for swiping the cards through a machine to confirm a person's identity and immigration status. Employers who refused to swipe the card or who otherwise knowingly hired unauthorized workers would face stiff fines and, for repeat offenses, prison sentences.”
If this system were in place in time for the next economic recovery, the U.S. could substantially reduce the illegal population – even as better border controls prevent new immigrants from arriving. And if illegals are excluded from the new health exchanges, as the health-care law dictates, health reform itself could well deter future illegal immigration.
And what of those who stay anyway?
Their children born in the U.S. will be citizens, raised here, qualifying for coverage. As for their parents: Do nothing. Amnesty incentivizes new rounds of illegal immigration. Non-amnesty encourages illegals to return home with their savings as they age out of the labor force.
This is not a proposal to halt immigration. It’s a call for rationalizing immigration. In some domains, in fact, health-care reform may lead to a heightened need of immigrants. Who knows? If the Obama reforms squeeze the incomes of health-care professionals tightly enough, doctoring may become one of those jobs that Americans “just won’t do.”
(All statistics courtesy of the Center for Immigration Studies.)
Originally published in The Week.