Policy Implications

The findings in this paper clearly show that immigration policy has significantly increased the size of the uninsured population in the United States. Although they comprise only 13.1 percent of the nation’s total population, persons in immigrant households now account for 26.1 percent of the uninsured. Moreover, recent immigrants and their children account for more than half of the growth in the uninsured population since 1994. Knowing that our immigration policy causes the uninsured population to grow significantly in the United States does not, of course, tell us what we should do about this problem. As already discussed, there are a number of reasons to be very concerned about this growing problem. Assuming that we are concerned about this situation, two sets of policy options would seem to make sense. The first set of changes that might be pursued would be to adopt a new immigration policy that reduces the flow of immigrants who are likely to be end up among the ranks of the uninsured. This would help to ensure that immigration does not continue to add to the health insurance problem in the future. The second set of policy options would involve the development and implementation of policies that address the needs of uninsured immigrants and their children already here. This would have to be done in the context of existing efforts to provide health care and/or insurance coverage to the uninsured and it would have to be designed to meet the specific needs of immigrant families. Let us consider changes in immigration policy first.

Changing Immigration Policy

As we have seen, the lack of insurance coverage among immigrants stems partly from the low levels of education and high poverty rates among immigrants. Because of the limited value of their labor in an economy that increasingly demands educated workers, those with few years of schooling are the most likely to hold jobs that do not have health insurance. Or, if insurance is offered, the employee must pay a large share of the costs. Since workers with few skills also tend to have the lowest incomes, less-skilled workers are among the most likely not to be able to afford coverage when it is not provided by an employer. As a result, there are very large differences in rates of insurance coverage by education. For example, while 19 percent of working-age adults in immigrant households with a college education were found to be uninsured in 1998, 53 percent of high school dropouts in immigrant households were uninsured. Therefore, selecting a larger share of immigrants based on their skills would be very helpful in increasing the percentage of future arrivals who are covered by insurance. In addition, selecting persons with more education, who tend to have higher incomes, increases the ability of immigrants to purchase insurance on their own if it is not provided through their job. Changing the skill profile of newly arrived immigrants would require changes in both the selection criteria for legal immigrants and significantly stepped-up efforts to reduce illegal immigration.

Of course, there are benefits to immigration and these might be enough to offset the costs associated with the dramatic increase in the size of the uninsured population resulting from current immigration. In 1997, the National Research Council (NRC) examined the economic and fiscal effects of immigration on the United States and concluded that the likely economic benefits from immigration were very small relative to the size of the American economy. (Edmonston and Smith, 1997) Moreover, the NRC study found that the economic gains from immigration are the result of lower wages experienced by the least educated and poorest Americans who face the most competition from immigrant workers for low-wage jobs. Even if it does result in slightly higher returns on capital and slightly lower consumer prices, holding the wages of the poorest workers may be viewed by many as a cost rather than a benefit of immigration. The NRC also found that the net drain on public coffers (tax payments minus services used ) from immigrant households is enough at the present time to offset entirely the small positive economic effects that come from holding down the wages of the poor. While opinions on the costs and benefits of immigration differ, the NRC report was prepared by many of the top scholars in the field. It clearly shows that we can curtail immigration without any worry that it will harm the U.S. economy.

Of course, a low level of educational attainment is not the only reason the rate of health insurance coverage associated with immigrants is so low. One of the central findings of this report is that even among more educated and higher income immigrant households, lack of insurance coverage is surprisingly common. The fact that so many persons in immigrant households who should be able to afford coverage do not have it, suggests that many immigrants may simply not see the value of having health insurance. This may reflect the fact that migrants from countries with little or no tradition of health insurance, even the well-educated, retain the cultural attitudes and norms of their homelands. Therefore, it is entirely possible that increasing the size of the uninsured population is an unavoidable consequence of large scale migration from less modern and underdeveloped countries, where having insurance is not the norm. Since relatively few persons from the developed and more affluent parts of the world wish to come to the United States, persons from the less developed parts of the world will continue to comprise the vast majority of new immigrants as long as immigration remains at the current high level. Thus, it may be that a significantly larger uninsured population is simply an unavoidable cost associated with mass immigration. However, this point should not be overstated. It is clear from the data presented in this report that increasing the skill level of newly arriving immigrants would dramatically increase the percentage who obtain insurance. To ensure that a larger proportion of immigrants who enter in the future have the skills to complete in the modern American economy, and acquire health insurance, some changes in immigration policy are clearly warranted. This seems especially reasonable when one considers it is generally assumed that with the exception of refugees, immigration is supposed to benefit the United States. Therefore, it makes perfect sense to alter immigration to serve that end.

Changing Legal Immigration. In most years, 65 to 70 percent of visas are allotted to the family members of U.S. citizens and LPRs. Family relationships could continue to be a central part of immigration policy; however, limiting which relatives are eligible for admission could reduce the number of immigrants admitted without regard to their skills. The Commission on Immigration Reform chaired by the late Barbara Jordan suggested limiting family immigration to the spouses, minor children, and parents of citizens and the spouses and minor children of LPRs. This would eliminate the preferences now in the law for the siblings and adult children (more than 21 years of age) of citizens and Legal Permanent Residents. The preference for the spouses and children of non-citizens should also probably be eliminated, since these provisions apply to family members acquired after the alien has received a green card, but before he has become a citizen.¹⁵ If the parents of citizens were also eliminated as a category, family immigration would be lowered to roughly 300,000 per year, and the number would likely fall to 200,000 in a few years.
Humanitarian immigration should also undergo some changes. A greater effort should be made to limit asylum and refugee status to those who are genuinely in need of permanent resettlement because of persecution or a well-founded fear of persecution. The expansion of asylum grounds to groups not originally intended is likely to undermine public support for this small but needed category of admission. Abuse of asylum law also encourages illegal immigration by allowing those who make it into the United States to claim asylum on specious grounds in an effort to forestall deportation. As for refugees, the system must continue to remain flexible and in some years it may need to expand well beyond the 50,000 originally intended by the Refugee Act of 1980. Limiting resettlement to 50,000 would still allow the United States to take in nearly all of the persons identified by the U.N. High Commissioner for Refugees as needing permanent resettlement. At present, refugee policy is highly politicized and many of the refugees admitted to the United States do not meet the U.N.’s definition.

For employment-based immigration, the most important change would be to drop the 10,000 visas for unskilled workers.¹⁶ In addition to allowing in unskilled immigrants, this category also encourages illegal immigration because it offers the hope to unskilled illegal aliens that they will find an employer who will eventually petition to bring them in legally. The Jordan Commission also suggested eliminating the visa lottery. While the lottery represents 6 to 8 percent of the legal immigrant flow in most years, it makes little sense to admit immigrants based on luck. It also stimulates further family immigration because the winners can then petition to bring in bothers and sisters, adult children, and parents. Restricting family immigration to only the spouses and minor children of U.S. citizens, rationalizing humanitarian immigration, and ending the lottery would significantly reduce the number of legal immigrants admitted each year without regard to their ability to compete in the U.S. economy. This would help to ensure that immigration does not continue to cause a huge increase in the size of the uninsured population.

Reducing Illegal Immigration. As we have seen, most of the people living in immigrant households without insurance are legal immigrants or the U.S.-born children of immigrants; however, reducing illegal immigration would still be helpful in lowering the number of immigrants entering each year who do not have health insurance. Illegal immigration is undoubtedly the lowest-skilled immigration, with an estimated two-thirds having no health insurance. Among those who study the issue, there is broad agreement that cutting illegal immigrants off from jobs offers the best hope of reducing illegal immigration and, since 1986, it has been unlawful to employ illegal aliens. To date, however, worksite enforcement efforts have been ineffective. Three steps are needed to make worksite enforcement more effective. First, a national, computerized system that allows employers to verify that persons are legally entitled to work in the United States needs to be implemented. Tests of such systems have generally been well received by employers (Bolton, 2000). Second, the Immigration and Nationalization Service must significantly increase worksite enforcement efforts. Congress has repeatedly failed to increase funding for worksite enforcement. Third, more also could be done at the border. Despite increases in funding over the last few years, efforts along the southern border remain grossly inadequate. A real effort to control the border with Mexico would require perhaps 20,000 agents and the development of a system of formidable fences and other barriers along those parts of the border used for illegal crossings.

The cuts in legal immigration proposed earlier would also go a long way toward reducing illegal immigration in the long run because the current system of legal immigration creates a strong incentive to come illegally. There are approximately four million people qualified for immigration to the United States, but who are waiting their turn to receive the limited number of visas available each year in the various family categories. Such a system encourages those who have been selected, but have to wait, to simply come to the United States and settle illegally in anticipation of the day they are granted visas. Eliminating the sibling and adult children categories would alleviate this situation by doing away with the huge waiting lists. In addition to reducing the incentive to come before a green card is issued, cuts in legal immigration would also be very helpful in controlling illegal immigration because communities of recent immigrants serve as magnets for illegal immigration, providing housing, jobs, and entree to America for illegals from the same country. It is no coincidence that the top immigrant-sending countries are also the top countries in sending illegal immigrants to the United States. Sociological research shows that one of the primary factors influencing a person’s decision to emigrate is whether a family member or member of their community has already come to United States (Massey and Espinosa 1997; Palloni, Spittel, and Ceballos 1999). Thus, allowing in large numbers of legal immigrants is one of the leading causes of large-scale illegal immigration.

The changes in legal and illegal immigration policy outlined above would restore immigration levels to their historical average of about 300,000 to 400,000 annually in a few years. Even with these changes, the United States would continue to accept twice the number of immigrants as any other country in the world. More important, by limiting the number of immigrants allowed into the country without regard to their skills, these changes would insure that immigration will not continue to significantly add to the uninsured population in the way that it has in the recent past.

Increasing Insurance Coverage Among Immigrants Already in the Country

While lowering the number of less-skilled legal and illegal immigrants entering each year would ensure that fewer immigrants admitted in the future end up among the ranks of the uninsured, it would not immediately increase the rate of insurance coverage among immigrant households currently residing in the United States. Reducing the size of the uninsured population by changing immigration policy should, over time, free up resources from federal, state, and local governments so they can do more for the uninsured. And this would clearly be a desirable outcome for uninsured immigrants and their children already in the country. This alone, however, will not solve the problem. The most direct and simplest way to provide health insurance to persons in immigrant households would be for the government to provide free health insurance or insurance at greatly reduced cost to all those who do not have it. This strategy has been extremely effective in providing health insurance coverage to the elderly. Because of Medicare, persons over age 65 have the highest rate of insurance coverage of any sub-population in the country. Of course, the primary disadvantage of programs of this kind is the cost. Providing insurance coverage to the 11.6 million people in immigrant households without insurance would be very expensive. Even providing insurance coverage to only the 7.4 million people in immigrant households who live in or near poverty and have no insurance would cost tens of billions of dollars. For example, expenditures on the more than 30 million recipients of Medicaid amounts to more than $150 billion a year. Providing Medicaid coverage to only the 7.4 million persons in immigrant households in or near poverty, to say nothing of the 16.4 million poor and near-poor in native households, might cost taxpayers upwards of $30 billion annually.

Even if providing coverage to all of the uninsured with low-incomes, including those in immigrant households, is thought to be prohibitively expensive, more can be done to increase their rate of insurance coverage. As we have seen, most persons without health insurance live in households where at least one person works. Thus, one set of options that should be pursued would involve making it easier for businesses to cover their employees. This might involve changing regulations and tax policy with the intent of making it less expensive for businesses to provide private health insurance to their workers. Tax credits might also make private insurance more affordable for the working poor and near poor. Both the Republican and Democratic nominees for president have proposed tax credits totaling billions of dollars a year so the working poor can more easily purchase private health insurance. In addition to increasing private insurance coverage, greater efforts on the part of government, at all levels, to provide insurance to those without it could have a significant effect on the rate of insurance coverage among those most likely to be uninsured. So as to contain costs, such efforts could be specifically targeted at subgroups of the uninsured, such as children and those with the lowest incomes. A number of proposals have been made in this regard in recent years and some new initiatives have been implemented by the federal and state governments. The new State Children’s Health Insurance Program or SCHIP, enacted in 1997, is one such effort. By April of 2000, SCHIP had insured an estimated one million children. It is hoped that it will eventually reach an estimated 2.5 million eligible children, at a cost of over $4 billion annually to the federal government when fully implemented. As the SCHIP shows, even providing insurance coverage to a small fraction of the 44.3 million U.S. residents without health insurance will not be cheap. For this reason, changing immigration so that it does not continue to add to the problem clearly makes sense. The SCHIP program also demonstrates how immigration can make reducing the size of the uninsured population vastly more difficult. As already pointed out in the discussion on insurance coverage by age, in just the last four years immigration has increased the number of children under the age of 19 (SCHIP’s target population) without insurance by more than 700,000 — enough to offset most of the gains made so far under SCHIP.

In addition to making private and government-provided insurance more available, new efforts might be undertaken to educate new immigrants about the need for health insurance. It is clear from the research presented in this report that lack of insurance for persons in immigrant households is not simply caused by the low levels of education and high poverty rates associated with immigrants. Well-educated and high-income immigrant households also are much more likely to be without insurance than similarly situated natives. For example, nearly one in five persons in immigrant households with incomes of more than $50,000 a year were uninsured in 1998. It is very unlikely that programs designed to insure persons with limited incomes would or even should cover most of these individuals. Instead, these individuals should be taking advantage of employer-provided health insurance when it is offered or purchase it on their own if it is not. While it may be seen as paternalistic, efforts to better inform immigrants of the value of health insurance may be helpful in increasing their rate of insurance coverage. This can be justified because, in a society such as ours that will provide at least basic care to all including the uninsured, there is clearly a public interest in increasing the percentage of the population who have health insurance.

Another area where new initiatives may be possible is job retraining. Since the low skill level associated with immigrants is one of the primary reasons so many work at jobs that pay poverty level wages and do not have health insurance, increasing the ability of immigrants to compete in the labor market by improving their job skills is very likely to increase their rate of insurance coverage. Specific programs designed to increase immigrant familiarity with their new country might help to improve their level of insurance coverage. This may include adult education programs designed to increase knowledge of English, the U.S. job market, employee benefit packages, and services available from government and private sources.