The Case for Health Insurance for Illegals

Call it the shout heard round the world. Since last Wednesday, when Rep. Joe Wilson, Republican of South Carolina, interrupted Barack Obama's big speech on health-care reform to shout "You lie!," Beltway bloviators have bloviated about little else. Wilson's vulgarity. Wilson's apology. Wilson's "dirty health-care secret". Wilson's charming effort to make American politics more British.

And that's just at NEWSWEEK.

Few of us, however, have actually bothered to address the issue that provoked Wilson's outburst: health insurance for illegal immigrants. The line he objected to—"The reforms I'm proposing would not apply to those who are here illegally"—is, in fact, not a "lie." The current House bill makes it very clear that "individuals who are not lawfully present in the United States" will not be allowed to receive subsidies. To wrangle assistance, illegal aliens would have to commit identity fraud, something that rarely happens in our current public-health-care system (a.k.a. Medicare). And Democratic senators have just announced that they'll require those who participate to show proof of citizenship. So it's a nonissue.

But let's just assume, for argument's sake, that we all live in Wilsonville, where Obama is the lying liar his critics allege him to be—the sort of psycho who has chosen to sacrifice his political future on the flaming pyre of anti-immigrant sentiment by concocting a secret scheme to cover the nation's estimated 11.9 million illegals. Would that really be so bad?

Of course, insuring undocumented workers is ethically murky and politically impossible. Some people argue that if we're hiring illegals to, say, shingle our roofs, we have a moral obligation to care for them if they fall off. But more people, it seems, simply want them out of the country. Given that illegal immigrants have, by definition, broken our laws, it makes sense that large numbers of upstanding citizens oppose any measure that would encourage more foreigners to sneak into America or make their lives easier once they're here.

The only problem? From a purely economic standpoint, insuring illegal immigrants makes a lot of sense—and not just for them, but for everyone.

Consider a few statistics. According to a July article in the American Journal of Public Health, immigrants typically arrive in America during their prime working years and tend to be younger and healthier than the rest of the U.S. population. As a result, health-care expenditures for the average immigrant are 55 percent lower than for a native-born American citizen with similar characteristics. With the ratio of seniors to workers projected to increase by 67 percent between 2010 and 2030, it stands to reason that including the relatively healthy, relatively employable and largely uninsured illegal population in some sort of universal health-care system would be a boon rather than a burden. "Insurance in principle has to cover the average medical cost of all the people it's serving," explains Leighton Ku, a professor of health policy at George Washington University. "So if you add cheaper people to the pool, like immigrants, you reduce the average cost." More undocumented workers, in other words, means lower premiums for everyone.

The actuarial advantages don't end there. As it is now, undocumented workers (and others) who can't pay their way receive free emergency and charitable care—a service that costs those of us with health insurance an additional $1,000 per year, as Obama noted. But if illegals were covered, this hidden tax would decrease, further lowering our premiums and "relieving some of the financial burden on state and local governments," says Harold Pollack, a University of Chicago professor who specializes in poverty and public health. What's more, employers currently have a clear economic incentive to hire undocumented immigrants: they don't require coverage. A plan that mandates insurance for native workers but not their illegal counterparts actually makes life harder on the blue-collar Americans competing for jobs (and railing against immigrants) because it means that hiring them will cost more than hiring a recent transplant from Mexico City. As The Washington Post's Ezra Klein recently explained, "If you're really worried about the native-born workforce, what you want to do is minimize the differences in labor costs between different types of workers. A health care policy that enlarges those differences—that makes documented workers more expensive compared to undocumented workers—is actually worse for the documented workers."

At this point, you're probably wondering whether taxpayers would have to foot a bigger bill for these newly insured illegals. Not necessarily—at least in theory. As Obama said in Wednesday's speech, "Like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects" to fund whatever care it provides. Given that many undocumented workers leave the country before they're old enough to require much medical care, says Phillip Longman of the New America Foundation, "you could set up the system in a way that that they wind up contributing as much or more than they receive" in low-income subsidies, especially when the "offsetting savings of lower emergency-room use" are factored in.

But despite the potential economic upside, the right shouldn't stress: America won't insure its illegal immigrants any time soon. "The hard thing here is that the current state of perception on immigration is eroding our sense of social solidarity," says Longman, who believes, like the rest of the experts quoted in this story, that covering undocumented workers is both politically and logistically impractical. "People simply don't want money going to people on the other side of the tracks." That pretty much explains why Obama was so determined to clear up the confusion—and why Joe Wilson was so determined to keep it alive. Never mind that our wallets would be better off if Wilson were right. Money, after all, isn't everything—even in politics.