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NRO’s domestic-policy blog, by Reihan Salam.

Why Nancy Pelosi is Wrong About Subsidized Medical Care for Legalized Immigrants



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David Nakamura and Sandhya Somashekhar report on conservative efforts to deny various taxpayer-financed health benefits to unauthorize immigrants. Rep. Raúl R. Labrador, for example, has insisted that unauthorized immigrants granted provisional legal status be required to purchase their own issues without federal subsidies. As Jed Graham explains, however, excluding individuals with provisional legal status from the various provisions of the health law would also give them an advantage over citizens:

Labrador’s tough line suffers from the same tunnel vision as the Senate immigration bill — at least as it stands now — which also would deny ObamaCare subsidies to immigrants for a decade or more.

Both approaches would give employers a big incentive to hire legalized immigrants in order to dodge ObamaCare’s fines for failing to provide affordable, comprehensive health coverage to workers. That’s because such fines may be levied based on the number of full-time employees who actually get subsidized coverage via ObamaCare’s exchanges.

For each subsidized worker, many employers will owe a $3,000 nondeductible fine, which equates to $5,000 in wages for a profit-making firm that pays a combined 40% federal and state tax rate. 

This is not to suggest that Labrador’s concerns are entirely misplaced. The unauthorized immigrant population is extremely poor, and while offering unauthorized immigrants provisional legal status will tend to raise their incomes, it won’t raise them enough to obviate the need for subsidized medical coverage. According to Nakamura and Somashekhar, congressional Democrats find the debate over subsidized medical coverage for legalized immigrants exasperating:

Frustrated Democrats argue that Republicans are picking a fight where one does not exist. In both chambers, Democrats say, they have agreed that illegal immigrants would not be eligible for public benefits — including health-care subsidies and Medicaid — as they embark on a path to permanent legal status, which would take at least 10 years under the Senate plan.

“We have said since Day One . . . that undocumented people will not have access to subsidies in the Affordable Care Act,” House Minority Leader Nancy Pelosi (D-Calif.) said last month. “Any thought that we want to do something different than that is simply not true. It is a bottom line. No need to even discuss it.”

Under current law, illegal immigrants and legal residents of fewer than five years are mostly barred from receiving benefits under Medicaid, the joint state-federal health insurance program for the poor. That restriction does not apply to poor immigrants who show up at hospital emergency rooms, however.

While writing the Affordable Care Act, Congress sidestepped the dicey issue of illegal immigration by excluding immigrants who are in the country illegally from its provisions. That means that those immigrants will not get government subsidies to help them buy private insurance plans, nor can they benefit from the law’s expansion of Medicaid.

At the same time, however, they are exempted from the mandate, taking effect next year, that every person must carry health insurance or face a tax penalty.

One reason congressional Democrats might believe that there is “no need to even discuss” this subject is that their current position is untenable. Los Angeles County is just one of many local governments which have raised the fact that denying legalized immigrants federal health subsidies will leave them with a crippling economic burden it can ill afford. Given that the House Minority Leader represents San Francisco, a jurisdiction that contains a nontrivial number of unauthorized immigrants who will be eligible for provisional legal status, one assumes that she understands that local taxpayers will resist fully taking on the cost of providing subsidized medical care for legalized immigrants, particularly in light of rising pension and benefits costs. So the game plan appears to be this: insist that subsidies are off the table for legalized immigrants (“no need to even discuss it”), pass the law with the support for conservatives and centrists in both parties who’d be reluctant to support it if subsidies were offered, and then extend subsidies once the law is passed by pointing to the burden that has been placed on state and local governments, and various news stories about the difficulties facing low-income legalized immigrants who don’t have access to subsidized medical coverage. 

Nakamura and Somashekhar telegraph what this debate will look like in their final paragraphs:

Last week, Rubio announced he would co-sponsor an amendment with Sen. Orrin G. Hatch (R-Utah) to mandate that illegal immigrants cannot get access to public benefits until five years after they earn green cards signifying permanent legal status.

That would mean that, although such immigrants could be eligible for citizenship after 13 years, they would not be allowed to access the health subsidies for at least 15 years.

“The 13-year-long pathway to citizenship will be hard enough,” said Sen. Mazie Hirono (D-Hawaii). “The restrictions on federal safety-net programs make the pathway even more treacherous.”

Suffice it to say, medical providers and insurers will likely embrace Hirono’s stance, as utilization of medical services will increase considerably among legalized low-income immigrants if they are granted subsidized medical coverage. 



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