Immigration Reform 2013: Study Shows Immigrants Are Subsidizing Medicare Instead Of Draining It


More good news came in for those pursuing immigration reform on Capitol Hill on Wednesday. Striking back at the notion that more immigrants would strain federal health care programs to the breaking point, a study published in the journal Health Affairs found that immigrants contribute billions more to Medicare then they draw out.

A team of Harvard University and City University New York researchers conducted the study. The results of the study are sure to be utilized by immigration reform supporters, who argue that immigration is a net economic positive to the United States.

The study found that immigrants contribute to Medicare’s Hospital Trust Fund, a fund that accounts for nearly half of Medicare’s revenues and that pays for hospital care, in excess of their use of it. The surpluses totaled $115 billion from 2002 to 2009. The solely American-born populations had a deficit of $28 billion over the same seven-year period.

In 2009 alone, immigrants contributed $33 billion to the trust fund, nearly 15% of total contributions. Immigrants’ outdraws were only $19 billion, 8% of expenditures.

The individual contributions between immigrants and American-born citizens were roughly the same but the difference came due to a trend that has long been known by demographers, the demographics of populations. Immigrants as a population have a lower average age and thus have less of them being eligible for benefits compared to American citizens.

It was also found that care for immigrants cost less. The average expenditure for immigrants who used the program was $3,923, compared to $5,388 for American-born users. The paper called it a difference "of borderline significance."

Concern over immigrants being “takers” with a net drain to the economy has been a constant line of attack by immigration reform opponents. Leighton Ku, director of the Center for Health Policy Research at George Washington University told the New York Times, "There’s this strong belief that immigrants are takers. This [study] shows they are contributing hugely. Without immigrants, the Medicare trust fund would be in trouble sooner."

This belief that immigrants are a net drain to the economy was emphasized in the report released by the Heritage Foundation that claimed that immigration reform would cost the economy $6 trillion. But many, even other conservative organizations such as the American Action Forum, criticized that report. The conservative libertarian CATO Institute had even stronger wording in their criticism for the report, calling it "fatally flawed."

The report notes that much of the surplus comes from undocumented immigrants. The graph below expands on the data in more detail.

But the demographic trends of the average age of immigrants being lower are consistent among documented and undocumented immigrants. The paper concludes that the immigrant surplus is not a temporary statistical blip but will continue for decades to come. This is due to most of the working age immigrants being decades away from retirement and the higher proportion of working age immigrants compared to older immigrants.

Writing on their findings the researchers note, "Immigrants, particularly noncitizens, heavily subsidize Medicare. Policies that reduce immigration would almost certainly weaken Medicare’s financial health, while an increasing flow of immigrants might bolster its sustainability."

And in an interview, Leah Zallman of Harvard said of the results, "If we continue to have a steady influx of working age immigrants, we’re likely to see the subsidy continue for many years to come."

This report is sure to bolster the spirits and arguments of those fighting for immigration reform. If it is enough to convince those on the other side is another story however.