Findings

High Percentage of Persons in Immigrant Households Lack Insurance. Figure 1 shows the proportion of persons in immigrant- and native-headed households who have no health insurance, also referred as the uninsured. Figure 1 also shows the percentage who are covered by Medicaid, the means-tested health insurance program provided by the federal government and states. (The figures for Medicaid include persons using the Indian Health Service as well as state programs, such as California’s Medi-Cal). In 1998, 32.4 percent of all persons in immigrant households were without health insurance. This was more than twice the rate for persons in native households — 13.9 percent of whom lacked health insurance. This means that, astonishingly, nearly one out of three persons in immigrant households had no health insurance in 1998. The difference in rates of insurance coverage is statistically significant using either a 90 percent or 95 percent confidence level. This means that we can say with 95 percent certainty that the gap in rates of insurance coverage in the CPS represents a real difference in the actual population.

Compared to other subgroups in the population, the percentage of persons without health insurance in immigrant households is extremely high. Even in comparison to groups that traditionally have a high percentage without insurance, the rate for those in immigrant households stands out. For example, it exceeds the rate for African-Americans, 22.2 percent of whom lack insurance, and also exceeds the rate for high school dropouts,⁵ 26.7 of whom lack insurance, and it is about equal to the 32.3 percent of all persons living in poverty who are uninsured. If many observers have described the fact that 16.3 percent of the nation’s total population lacks insurance as a severe problem, then the situation for immigrants and their children can only be described as a crisis.

Immigrant Households Account for a Large Share of Uninsured Population. The high percentage of persons in immigrant households without insurance coupled with the very large number of people living in immigrant households means that immigration has had a very significant effect on the overall size of the uninsured population. Table 1 provides percentages and totals for persons without health insurance living in immigrant and native households. In 1998, persons in immigrant households accounted for 26.1 percent or 11.6 million of the 44.3 million people in the United States who lacked health insurance. Since persons in immigrant households account for only 13.1 percent of the country’s total population, their disproportionate representation among the uninsured reflects the very high percentage who do not have health insurance. Put another way, the uninsured population is one-third larger (32.7 million versus 44.3 million) because of immigration. Clearly, the impact of immigration on the health insurance problem in the United States is difficult to overstate.

Welfare Reform is Not to Blame. In 1996, concern over immigrant use of means-tested programs led Congress to reduce welfare eligibility for some immigrants as part of a general overhaul of the welfare system. In particular, Congress made some recent non-humanitarian immigrants (i.e., not refugees and asylees) ineligible to receive several federally funded programs, including SSI, AFDC/TANF, and food stamps, until they had been in the country for a certain period of time. Since persons receiving cash assistance programs like SSI and AFDC/TANF are automatically eligible for Medicaid coverage, changes in immigrant eligibility for these programs might explain why so many persons in immigrant households do not have health insurance. The available evidence, however, indicates that this is clearly not the case. Lack of insurance coverage was a severe problem for persons in immigrant households before welfare reform. In 1995, 30.5 percent of persons in immigrant households were uninsured.⁶ This is very similar to the 32.4 percent who were uninsured in 1998. Moreover, the gap between persons in immigrant and native households has remained roughly the same size since 1995. In that year, 13.2 percent of persons in native households lacked health insurance, so there was a 17.3 percentage point gap between immigrant and native households. This is only slightly smaller than the 18.5 percentage point gap that existed in 1998 between the two groups. It is true that Medicaid use among persons in immigrant households has fallen significantly since 1995, but it has also fallen sharply for persons in native households. Between 1995 and 1998, Medicaid use declined 15 percent for persons in native households and a little less than 18 percent for persons in immigrant households. As Figure 1 shows, despite falling Medicaid use, persons in immigrant households are still significantly more likely to be on Medicaid than those in native-headed households.⁷ In 1998, 13.8 percent of persons in immigrant households used Medicaid compared to 9.7 percent of people in native households. Since the percentage of persons in immigrant households on Medicaid remains higher than that of persons in native households, it is hard to argue that low rates of Medicaid use alone account for the higher percentage of immigrants and their children who are uninsured.

The fact that welfare reform does not explain the lack of insurance coverage for persons in immigrant households does not mean that Congress was right to curtail welfare eligibility for immigrants. As we will see, the low level of educational attainment and high poverty rates of many immigrants and their children indicates that they need access to the welfare system even more than do natives. While it may make little sense to have an immigration policy that admits large numbers of people who end up in or near poverty and need to use means-tested programs, cutting welfare benefits to immigrants after they have already been allowed into the country seems neither fair nor wise.

Recent Immigration Accounts for Much of Growth in the Uninsured Population. One of the reasons policymakers, politicians, the media, and researchers have devoted so much attention to the uninsured population is that it has grown significantly in recent years. As previously discussed, both the percentage of the population without health insurance and the size of the uninsured population have grown significantly in recent years. The growth in the uninsured population continued through the 1990s, despite a strong economy over most of the decade. What has not been generally acknowledged is that much of this increase was caused by newly arrived immigrants and their children. The Current Population Survey asks immigrants when they came to the United States. therefore, it is possible to estimate the direct impact of recent immigration on the size of the uninsured population. In 1998, 2.58 million of the 5.32 million immigrants who indicated that they had arrived between 1994 and 1998 lacked health insurance. In addition, 114,000 of the 424,000 children born in the United States to immigrants that arrived in this time period also lacked health insurance.⁸ This means immigration accounted for 2.7 million or an astonishing 59 percent of the 4.67 million increase in the size of the uninsured population that took place after 1993. Looked at from a different point of view, if all persons in immigrant households are excluded from the data, the percentage of the population without health insurance in the United States would be 13.9 percent (the current rate for persons in native households and the national rate back in 1990). These numbers indicate that immigration policy has become central to an understanding of the growing health care insurance crisis in the United States. Without immigration, the size and scope of the problem would be significantly different.

Lack of Insurance Remains a Problem Even After Many Years in the Country. While recent immigrants and their children account for much of the recent growth in the uninsured population, this would not be as much a matter of a concern if immigrants obtained insurance soon after arriving in the country. In addition to overall totals, Table 1 reports the percentage of persons who lack health insurance based on the year of entry of the household head. Looking at insurance coverage by entering cohort is useful because it is one of the best ways of determining the progress of immigrants over time. Table 1 shows that the longer immigrants reside in the United States, the more likely they are to have health insurance. This is certainly to be expected. As immigrants become more familiar with their new country and as their work experience grows, their access to health insurance increases. However, the table also shows that even after immigrants have been in the country for a long period of time, the percentage without health insurance remains extremely high. For example, 35.8 percent of persons living in households headed by an immigrant who arrived in the 1980s still did not have insurance in 1998, even though in most cases the household head had been in the country for 10 or more years. Turning to persons living in households headed by immigrants who arrived in the 1970s, 29 percent were without coverage, even though most of the heads of these households had been in the country for more than 20 years. With the exception of pre-1970 immigrant households, the differences between persons in immigrant and native households by year of entry is statistically significant. The higher rates of insurance coverage of pre-1970 immigrants may partly reflect the fact that most of these immigrants were admitted under the system that existed prior to 1965, which tended to produce a more educated flow of immigrants. The results in Table 1 make clear that although the percentage without insurance does decline over time, many persons in immigrant households do not acquire insurance even after they have been in the country for many years.
The figures in Table 1 report insurance coverage for all persons in immigrant households. One might assume that the immigrant themselves have much higher rates of insurance coverage, but that it is their dependents who are often without insurance. Analysis of only immigrants, however, indicates that this does not appear to be the case. In 1998, 27.2 percent of immigrants who arrived in the 1970s were without insurance; for 1980s immigrants, the figure was 37 percent and for immigrants who arrived in the 1990s, 47.2 percent lacked insurance. While these percentages differ somewhat from those in Table 1, the same basic pattern remains. Even after they have lived in the United States for many years, lack of insurance coverage among immigrants is very common. These findings indicate that despite generally favorable economic conditions over the last two decades, many immigrants are unable or are unwilling to acquire health insurance. Even 1970s immigrants are twice as likely as natives to be uninsured. The fact that such a high percentage of established immigrants do not have insurance raises the question of whether low rates of insurance coverage, at least to some extent, reflect a choice on the part of some immigrants, rather than economic necessity. This issue will be explored later in this report.

Majority in Immigrant Households Without Insurance Are Legal Residents. While Table 1 indicates that persons in immigrant households make up a large share of the uninsured, it does not provide information about their legal status. It is possible that illegal aliens (also called undocumented or unauthorized immigrants) account for a large percentage of persons in immigrant households without insurance. Knowing the legal status of those who lack insurance may be important because it provides useful information about the extent to which the problem is explained by the presences of illegal immigrants in the country. While it is not possible to definitely identify illegal aliens in the CPS, it is possible to estimate their number and their rate of insurance coverage. Research by Clark and Passel (1998) and Warren (1999) indicates that five million illegal aliens were counted in the March 1999 CPS.⁹ To estimate the percentage who lack insurance, it is possible to use persons with demographic characteristics that are thought to be similar to those of illegal aliens. This paper uses immigrants who are not citizens; who lack a college education; who are under age 65; who are from Mexico, the Caribbean (excluding Cuba), and Central America; and who arrived between 1986 and 1998 as representative of illegal aliens. In the March 1999 CPS, the percentage of these individuals who lacked insurance was very high — 63.9 percent. To calculate the impact of illegal aliens on the size of the uninsured population, we assume that the same percentage of illegals (96.9 percent) live in immigrant households as our surrogate population. If the rate of insurance coverage and distribution across households is the same for illegal aliens as for this surrogate population, then 3,095,955 or 26.8 percent of the 11,564,000 people without insurance living in immigrant households are in the country illegally. Alternately, 73.2 percent or 8,468,045 of persons in immigrant households were legal immigrants or the U.S.-born children of immigrants. These results also imply that 27.5 percent of persons in immigrant households who reside in the country legally are without health insurance. While this is somewhat lower than the 32.4 percent for all persons in immigrant households when illegal aliens are included, it is still dramatically higher than the 13.9 percent for persons in native households. Clearly, these estimates indicate that illegal aliens contribute significantly to the problem. However, they also indicate that illegals account for only about one quarter of persons in immigrants households who do not have insurance. Even when illegals are excluded, the 27.5 percent of persons in immigrant households who are without insurance is still about twice the rate for individuals in native households.

The estimates provided above probably overstate the impact of illegal immigration for two reasons. First, defining who is an illegal alien is not as straightforward as it might seem. A large percentage of those in the country "illegally" actually have the permission of the federal government. Many are asylum applicants awaiting the outcome of their petition to stay in the country. Others enjoy temporary protected status (TPS) because, although they do not qualify for political asylum, the federal government will not deport them or require them to leave because it is thought conditions in their home countries are too unstable or chaotic for them to return. In addition, there are still several hundred thousand persons who are the spouses and children of amnesty beneficiaries from the 1980s who are also allowed to stay in the country. If all of these "semi-legal" immigrants are excluded, illegal aliens would account for an even smaller share of those without insurance living in immigrant households.

The second reason that the estimated impact of illegal aliens may be overstated in the above calculations is conceptual. It may make more sense when evaluating the impact of immigration to view legal and illegal immigration as closely linked and not as distinct phenomena. Many illegal aliens come to the United States to join friends and family members who are legal residents. Sociological research indicates that one of the primary factors influencing a person’s decision to emigrate is whether a family member or person from their home community has already come to United States (Massey and Espinosa 1997; Palloni, Spittel, and Ceballos 1999). Communities of recent legal immigrants serve as magnets for illegal immigration by providing housing, jobs, and entree to America. The close link between legal and illegal immigration can also be seen in analysis done by the Congressional Research Service that estimates that one out of four legal immigrants who receives a green card in any given year is in fact an illegal alien already living in the country (Cited in Vaughan,1997). Thus, it is probably more accurate to view illegal immigration as a direct consequence of large-scale legal immigration and not as a separate phenomenon. If this is correct, it makes more sense to look at the characteristics of all immigrants as reflective of the nation’s immigration policy in its totality, not to separate out illegal aliens from legal immigrants.