Immigrants Created $115B Surplus For Medicare's Trust Fund While American-Born Population Ran $28B Deficit
Immigrants are paying billions more into Medicare's Trust Fund than they're benefiting from it, a new study shows.
Between 2002 and 2009, immigrants generated a surplus of $115.2 billion for the Trust Fund, which pays most hospital bills, while American-born people created a deficit of $28 billion. The study that appears in the June issue of Health Affairs contradicts certain beliefs about whether immigrants are draining the health care system.
"For years I have seen my immigrant patients be blamed for driving up health care costs," said Leah Zallman, lead author and staff physician at Cambridge Health Alliance, "and yet few acknowledge their contributions. Our study demonstrates that in one large sector of the U.S. health care economy, immigrants actually subsidize the care of native-born Americans."
Medicare is paid through the Hospital Insurance Trust Fund that gets revenue from payroll taxes, income taxes from Social Security benefits, and interests from trust fund investments, among other sources.
A close examination of the Trust Fund between 2002 and 2009 revealed that immigrants paid a surplus of $11.1 billion and $17.2 billion ever year, or a total of $115.2 billion. At the same time, U.S. born citizens created a deficit of $28.1 billion. Then, in 2009 immigrants contributed $33.1 billion into the Trust Fund, while using only $19.3 billion in health care.
The expenses for immigrants are low because few are actually elderly. A majority of immigrants are working age group and join the labor force and pay large payroll taxes.
In addition, most elderly immigrants are ineligible for Medicare because they don't meet requirements for Social Security or the five-year residency, or are illegal. Researchers said that even undocumented immigrants pay taxes under borrowed or false Social Security numbers.
"The numbers completely contradict the widely held misperception that immigrants are a drain on the health system," said Steffie Woolhandler, professor at Hunter College School of Public Health and visiting professor of medicine at Harvard. "Reducing immigration would worsen Medicare's financial woes."
Source: Zallman L, Woolhandler S, Himmelstein D, et al. Immigrants contributed an estimated $115.2 billion more to the Medicare Trust Fund than they took out in 2002-09. Health Affairs. 2013.