Gavin Newsom proudly made California the first state to provide no charge Medicaid (called Medi-Cal in Golden State) health insurance to illegal entrants (“illegals”). His plan will cover only adults.
Eleven other states also intend to enroll illegals in Medicaid. In contrast to California’s “adults only,” Utah and Texas allow children only to enroll. Utah state Representative Jim Dunnigan said, “These are kids, and we have a heart.”
The biggest beneficiaries of Medicaid expansion, besides the bureaucrat workforce, are insurance companies.
In California, 37 percent of the state (14.6 million) currently have Medi-Cal insurance. Adding illegals will add an estimated 764,000 persons. That number will likely be greater as illegals continue to pour across the border. In December 2023 alone, there were 225,000 illegal entrants. (READ MORE from Deane Waldman: There’s a Tiny ‘Bubble’ That Could Save Healthcare)
According to the left-leaning Public Policy Institute of California, 66 percent of Californians surveyed support Newsom’s move. However, it is doubtful that Californians understand giving Medi-Cal to illegals will reduce access to care for legal residents.
With a limited and shrinking population of care providers, adding more people to government insurance rolls will exacerbate the seesaw effect. As government insurance rolls go up, access to medical care goes down. When Medicaid rolls expanded via the ACA, maximum wait times for a primary care visit increased to a medically dangerous 122 days. Three quarters of all states report impossibly long waiting lists for home and community health services. One shudders to think how much longer wait times will be if an estimated 5 million uninsured illegals will be given Medicaid coverage.
The net effect of giving Medicaid insurance to illegals is as follows:
More patients demanding care + Fewer providers of care = Longer waits for care, or ® “Death-by-queue” (dying while waiting in line for care).
Expanding Medicaid drives even more spending on bureaucracy, administration, rules, regulations, compliance, oversight, mandates, and enforcement (BARRCOME.) It is estimated that 31 percent to 50 percent of U.S. healthcare spending goes to BARRCOME. As has happened in the past, these will be dollars “diverted” away from paying for patient care
California currently faces a $68 billion deficit. The estimated cost for adding illegals to Medi-Cal is $4 billion. With thousands more coming across the border every day, the actual cost will likely be much higher. It is unclear how Newsom will deal with burgeoning his state deficit as more people flee the Golden state taking their tax revenues with them.
It is not just California or the other eleven states that bear the financial burden of expanding Medicaid to illegals — all American taxpayers do. Medicaid programs are jointly funded by each state and Washington. Wealthy states like California and Colorado get one federal dollar added to each state Medicaid dollar. Thus, when Newsom budgets four billion California dollars to Medi-Cal, he gets an infusion of another $4 billion from all U.S. taxpayers.
Who benefits from giving health insurance to illegals? Certainly not patients, who suffer through reduced access to care and increased wasteful spending of their tax dollars. Beneficiaries include Democrat politicians, health equity advocates, state revenue coffers, small hospitals, and insurance companies. (READ MORE: Feds Can’t Fix Doctor Shortage They Created)
Democrats in state government can prove their progressive bona fides by showing how they are reducing uninsured rates in their state. Never mind they are reducing access to care.
Much is being written about health inequities — disparate outcomes based on race — blaming these inequities on systemic racism in healthcare. Progressives claim reducing the uninsured rate among minorities and the impoverished (which describes most illegals), will reduce inequities. This is false. Inequities are primarily due to socioeconomic factors not what doctors do. Furthermore, giving them Medicaid does not guarantee they will get care, certainly not timely care.
As states allocate more money to Medicaid, they increase state revenue by billions in federal funds. Most Medicaid dollars go to insurance companies, state BARRCOME, and federal compliance requirements. The amounts diverted from patient care to non-medical, “pork” projects is pure conjecture, as where Medicaid dollars actually go is often well-disguised.
The budgets of small especially rural hospitals benefit. Under EMTALA (Emergency Medical Transport and Labor Act of 1986), hospitals must care for acutely or critically ill patients regardless of payment source. Many patients are illegals who are uninsured. At present, hospitals get paid nothing when caring for uninsured illegals. When illegals have Medicaid coverage, the hospitals will get paid per Medicaid allowable reimbursement schedules. While this may not be what they should be paid, something is much better than nothing.
The biggest beneficiaries of Medicaid expansion, besides the bureaucrat workforce, are insurance companies. They get infusions of additional hundreds of billions of dollars. The law states that 80 percent of health insurance premiums must be spent on patient care. Whether it is semantic legal games, viz., differentiating premiums from other forms of revenue or numerous other accounting tricks, it is likely that much, much less than 80 percent of insurance revenues is paid to providers, care facilities, and pharmacies. Given proprietary protection of this information, taxpayers have no reliable, external forensic accounting of where their healthcare billions go. (READ MORE: Cops and Docs ‘Can’t Get No Respect’)
Giving Medicaid insurance to illegal entrants to the U.S. may make good sound bites for progressive politicians. However, insuring illegals takes desperately needed care away from everyone and spends even more taxpayer billions the country can’t afford.
Deane Waldman, M.D., MBA is Professor Emeritus of Pediatrics, Pathology, and Decision Science; former Director of the Center for Healthcare Policy at Texas Public Policy Foundation; former Director, New Mexico Health Insurance Exchange; and author of the multi-award winning book Curing the Cancer in U.S. Healthcare: StatesCare and Market-Based Medicine.
