The Number and Cost of Immigrants on Medicaid: National and State Estimates. Implications


A substantial share of Medicaid beneficiaries - about one in thirteen or 2.4 million people - were noncitizen immigrants, in a typical month in 1994. Because the welfare reform legislation does not affect the eligibility of most of those who were present in the U.S. in August 1996, very few of the immigrants now on Medicaid are affected. However, profound changes will occur over time, as the number of more recently arrived immigrants accumulates. If high immigrant states curtail Medicaid eligibility in line with the basic federal policies, the number of people with Medicaid coverage, particularly adults and the elderly, will gradually fall as immigrants drop off the caseload. If high immigrant states instead opt to use state funds to supplement federal Medicaid coverage, they may forestall these problems, but the non-federally matched portion of their Medicaid expenditures will gradually rise. The impact will be much smaller in low immigrant states under either policy.

Immigrants who lose full Medicaid coverage are still eligible for emergency medical services. However, given the historical experience with emergency coverage for undocumented aliens, it is possible that legal immigrants will have great difficulty obtaining access to emergency coverage in the Medicaid program. Administrative barriers, such as the inability to get a Medicaid card, problems obtaining the required documentation, and interactions with Medicaid managed care programs, may make it very hard for immigrants to get Medicaid coverage, even when they are eligible. States could reduce barriers to entry by developing administrative systems to ease access to emergency coverage for immigrants, such as by determining eligibility in advance and issuing Medicaid cards that indicate eligibility only for emergency services. There is little information at this time about how many states have adopted policies like these.

The data presented in this paper are for 1994. It is difficult to predict how these distributions will apply in the future. There have been, and will continue to be, changes in the rate of immigration to the U.S. and in the composition of immigrants.(4) Further, the rate of naturalization among immigrants has risen sharply, at least partly because of concern about the welfare reform changes. The first issue, changes in the rate and type of immigrants, mean there may be fewer immigrants eligible for Medicaid in the future, if there are fewer total immigrants or if they are less poor. The increase in naturalization might mean that the immigrants who lose Medicaid eligibility could gain it after becoming citizens, increasing Medicaid caseloads again. It is not possible to predict how these factors will balance out.

What will happen to low-income immigrants without Medicaid coverage and what does this mean for the health care system? It seems probable that some will get private insurance coverage, whether they get it through employment or through relatives. The rest will join the ranks of the nation's uninsured. Even before these changes, almost half (43 percent) of the noncitizen immigrants in the U.S. were uninsured, a rate of uninsurance three times the national average (Employee Benefits Research Institute 1996). Many uninsured immigrants will avoid or delay medical care because of financial problems. Others will seek charity or uncompensated care from safety net providers, such as public hospitals, community health centers and such. Health care providers in high immigration areas may find that the loss of Medicaid and increase in demand for uncompensated care create substantial financial hardship.