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Unhealthy Immigration Reform

Gang of Eight’s proposal will make Obamacare costs soar. 

By 4.17.13

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A little noticed provision of the Obama health law is likely to become a big roadblock to immigration reform. Obamacare makes legal immigrants eligible for subsidized private health plans on the exchanges, regardless of how recently they arrived.

The Gang of Eight immigration plan -- proposed by four Republican and four Democratic U.S. senators -- is expected to double the number of legal immigrants coming into the country with permanent visas over the next decade. That would add at least $100 billion to the cost of Obamacare health plan subsidies, depending on how many new arrivals don’t get covered through an employer.

Key to the Gang of Eight plan is the pledge that illegal immigrants will go to the “back of line” behind people who have applied for green cards to obtain permanent legal residence in the U.S. The plan says illegals will be allowed to start applying for green cards in a decade.

Meanwhile, a staggering 4.5 million people are in that line. It’s 19 years long on average, according to the Migration Policy Institute at New York University Law School, and as long as 24 years for a sister or brother coming from the Philippines.

Right now, half a million people enter the U.S. yearly with permanent visas (green cards). The Gang of Eight will have to double that figure to a million a year in order to keep the promise that the backlog will be gone before illegals step into the line for green cards.

These legal newcomers will be eligible for Obamacare. Two years ago, Obamacare’s authors wanted to avoid the longstanding federal requirement that newcomers wait five years to be eligible for Medicaid. So they made legal immigrants immediately eligible for subsidized private health plans on the insurance exchanges. That provision means that over 6 million legal immigrants who have arrived in the last five years will be eligible for help paying premiums, copays and deductibles, according to the Department of Health and Human Services.

Lucky newcomers. If you’re a citizen with a household income below 138% of poverty ($32,000 for a family of four) and you’re uninsured, the Obama health law will send you to Medicaid as of January 1, 2014. Medicaid is generally inferior coverage, because it pays doctors and hospitals so little. The better alternative -- private coverage -- is what legal newcomers will get as of January 1, 2014, affording them higher quality care than low income citizens.

Taxpayers will foot the bill for that special treatment. The average exchange subsidy for newcomers under $138% of poverty will cost $9,000, according to the Congressional Budget Office. For all eligible newcomers, the tab will likely be $36 billion a year. That's before immigration reform.

The Obama administration is making insuring immigrants a top priority. Thousands of translators and “navigators” will be hired to assist immigrants in the language they prefer, according to newly released administration rules. In an April 10 report, Families USA, a health advocacy group, predicted that Hispanics will make up half of exchange applicants in California. That's also before immigration reform.

Doubling the number of newcomers admitted with green cards and enrolling the lion’s share of them on the exchanges would increase the cost of Obamacare by as much as $3 billion in year one, $6 billion in year two, $9 billion in year three, and so on. The Gang of Eight proposal is reported to give preferences to applicants with health insurance, which could lower that cost somewhat.

On Fox News Sunday, Senator Marco Rubio was grilled about whether the 11 million illegal immigrants given a pathway to future citizenship will become a burden on taxpayers. He said no, because they won’t be eligible for any federal benefits -- no food stamps, no Obamacare, no Medicaid -- for the next ten years. “They have to be able to support themselves, so they’ll never become a public charge.” Sounds good.

But Senator Rubio and his fellow reformers need to level with us about the cost of expanding legal immigration. The advantages of immigration are manifold. We the People are a nation of immigrants. But we still have to pay the bills.

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About the Author
Betsy McCaughey is a senior fellow at the London Center for Policy Analysis and author of Beating Obamacare 2014.