National Data | Immigrants To The (Medicare) Rescue—In WSJ Wonderland.


 

In ancient Greek plays it`s called a “deus ex machina.” A God suddenly appears and resolves a seemingly hopeless situation. In today`s public policy debates, immigration is the new deus.

A prime example of the mindset is seen in Wall Street Journal Edit Pager`s Holman W. Jenkins Jr.`s recent (and otherwise quite sensible) ruminations on the vast increase in future government spending that is the Bush Administration`s Medicare drug benefit:

“A nation held hostage to the elderly in this way could easily end up like Japan, except for one safety valve: immigration. Maybe it`s time for Washington to pass a new version of the Gramm-Rudman budget law in the `80s, this one requiring every entitlement for retirees to come with an explicit increase in working-age immigrants to help pay for it.” [Wall Street Journal, November 26, 2003, p.A17not online (cheapskates!)]

(Apparently, Jenkins [email him] didn`t realize that the Medicare bill also contains a major subsidy to immigration—reimbursement of border hospitals` costs from their federally-mandated treatment of illegals.  But hey, who can read all these things?)

Nevertheless, this vision of immigrants paying Medicare taxes and then magically vanishing before claiming Medicare benefits—available only to age 65-plus seniors—just doesn`t comport with reality. Immigrant use of Medicare is already surprisingly heavy (11.3 percent vs. 13.7 percent of native-born Americans). And it will most likely increase as immigrants age.

Anyway, many of Jenkins` “working-age immigrants” are either unemployed or have incomes low enough to qualify for the quite separate health programs for the indigent. Among the latter: 3.5 million immigrants who currently receive Medicaid, the federal program for poor families with children.

Meanwhile, older immigrants are anything but reticent when it comes to Medicare:

 

  • In 2002 3.8 million Medicare recipients, or nearly one of ten, were immigrants.

 

  • More than 1 million non-citizens received Medicare benefits in 2002.

 

Medicare recipiency among naturalized citizens deserves particular scrutiny. Since the mid-1990s, making citizenship a condition for welfare eligibility has been fashionable as a politically cheap way of reducing welfare costs.

Result: immigrant groups with the heaviest welfare use rates—for example, Dominicans—have seen the largest increases in naturalization.

And naturalized citizens are now nearly twice as likely to receive Medicare than native-born Americans: 20.7% versus 13.7%.

[Number fans click here for underlying tables.]

Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.