Immigrants’ private insurance premiums exceed amount they receive in benefits
Immigrants to the U.S. accounted for nearly 13 percent of premiums paid to private insurers in 2014, according to a study published Oct. 1 in Health Affairs. But they’re spending more on those premiums than they’re receiving in benefits, creating a deficit that’s hard to ignore as the country wrestles with immigration policy.
“Knowing whether immigrants are a burden on the nation’s healthcare system can inform the debate,” first author Leah Zallman, the director of research at the Institute for Community Health in Malden, Massachusetts, and co-authors wrote in the journal. “Previous studies have indicated that immigrants contribute more to Medicare than they receive in benefits, but have not examined whether the roughly 50 percent of immigrants with private coverage provide a similar subsidy or even drain healthcare resources.”
It’s an important question to consider, Zallman et al. said—especially after President Donald Trump claimed undocumented immigrants cost the U.S. $11 billion each year in healthcare dollars. Conversely, studies have found immigrants—especially undocumented ones—have low healthcare use and spending, due in part to language and cultural barriers.
To evaluate whether privately insured immigrants are cross-subsidized by U.S.-born private insurance enrollees, Zallman and her team gathered nationally representative data from the Medical Expenditure Panel Survey (MEPS), National Health Interview Surveys and Current Population Survey (CPS). The researchers calculated premium contributions and insurers’ expenditures for U.S. natives, immigrants and undocumented immigrants, reaching either a net surplus or deficit for each group.
According to the CPS, immigrants made up 14.6 percent of the U.S. population in 2014. Just under 4 percent of those individuals were undocumented, and 52 percent had private insurance, compared to 59 percent of U.S. natives.
That year, immigrants’ premiums totaled $88.7 billion, Zallman and colleagues reported. That stands in contrast to private insurers’ $64 billion expenditure for those patients, meaning immigrants paid $24.7 billion more in premiums than insurers paid in return. The gap was similar in undocumented immigrants, who paid a total of $17.1 billion in premiums in 2014 compared to insurers’ $9.4 billion output.
“On average, immigrants’ premium payments exceeded private insurers’ expenditures for their care by $1,123 per privately insured immigrant,” the authors wrote. “The comparable figure for undocumented privately insured immigrants was $1,445. In contrast, U.S. natives generated a net deficit of $163 per person.”
Immigrants’ net surplus was likely due to their lower expenditures, Zallman et al. said. The authors noted immigrants are often reticent to seek care for a host of reasons, but their health expenditures tended to increase the longer they lived in the U.S.
“Our findings contradict assertions that people born in the U.S. are systematically subsidizing the medical care of immigrants, particularly those who are undocumented,” the researchers said. “On the contrary, immigrants subsidize U.S. natives in the private health insurance market, just as they are propping up the Medicare Trust Funds.”
Zallman and coauthors said the net subsidy incurred by immigrants persisted even after 10 years of living in the U.S.
“Immigrants’ subsidies to private insurance and Medicare likely reflect their relative youth and good health, as well as the reluctance of many to seek care,” they wrote. “Policies that curtail the flow of immigration to the U.S. are likely to result in a declining number of such ‘actuarially desirable’ persons, which could worsen the private insurance risk pool.”
After graduating from Indiana University-Bloomington with a bachelor’s in journalism, Anicka joined TriMed’s Chicago team in 2017 covering cardiology. Close to her heart is long-form journalism, Pilot G-2 pens, dark chocolate and her dog Harper Lee.