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How Unauthorized Immigrants Support Legal Users of Medicare

A new study finds unauthorized immigrants create a huge surplus in Medicare by contributing to payroll taxes, but not withdrawing benefits.
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(Photo: Konstantin L/Shutterstock)

(Photo: Konstantin L/Shutterstock)

There's a belief among some that unauthorized immigrants take jobs and benefits away from citizens and their authorized counterparts. But that's not always true, according to a new study: Unauthorized immigrants pay significantly into Medicare, helping to fund it in the face of growing spending, the study found. In fact, if unauthorized immigrants had neither used nor paid into Medicare between 2000 and 2011—the years for which researchers had available data—the program would go bankrupt one year earlier than it is now predicted to.

This research comes as Americans debate how many benefits to offer unauthorized immigrants. Last year, President Barack Obama's executive action on immigration made it so that some undocumented immigrants would eventually qualify for Medicare and Social Security, for which they're currently ineligible. Republicans opposed the move, and technically it's contingent on future administrations not overturning Obama's promise. So as long as folks disagree on its worth and fairness, the future of Obama's executive action is uncertain.

The Hospital Insurance Trust Fund will become insolvent in 2030, as the United States' population ages. Without unauthorized immigrants, that would have happened in 2029.

The new study offers an argument for providing Medicare to unauthorized immigrants. Between 2000 and 2011, unauthorized immigrants created a surplus of $35.1 billion in Medicare's Hospital Insurance Trust Fund, according to the study's authors, a team from several American universities and health care organizations. That's because about half of undocumented immigrants contribute to payroll taxes, but almost none use Medicare, since they're ineligible. Legal users of Medicare, on the other hand, created a $31.3 billion deficit.

Medicare's Trustees estimate that the Hospital Insurance Trust Fund will become insolvent in 2030, as the United States' population ages. Without unauthorized immigrants, that would have happened in 2029, the research team calculates. The numbers work out even better if some unauthorized immigrants become citizens: more of them paying payroll taxes would bring the surplus up to $45.7 billion, assuming 10 percent of those unauthorized immigrants become citizens every year, for seven years.

That may seem counterintuitive, since more citizens means more eligible Medicare users, too. But new citizens don't use much Medicare, as immigrants tend to be younger and healthier than native-born Americans, and Medicare largely supports people over age 65. In a previous study, this same research team found that immigrants as a group, including authorized and unauthorized folks, pay more into Medicare than they take out.

Over time, of course, those document-holding immigrants will age and start using Medicare like any other legal user. But perhaps then a new generation of immigrants will come in to support them.

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