Immigrants Contribute More To Medicare Than They Take Out

By Jordan Rau for Kaiser Health News

As Congress mulls changing America’s border and naturalization rules, a study finds that immigrant workers are helping buttress Medicare’s finances, because they contribute tens of billions a year more than immigrant retirees use in medical services.

“Immigrants, particularly noncitizens, heavily subsidize Medicare,” the researchers wrote in the journal Health Affairs. “Policies that reduce immigration would almost certainly weaken Medicare’s financial health, while an increasing flow of immigrants might bolster its sustainability.”

The Hospital Insurance Trust Fund, which pays for Medicare’s Part A inpatient hospital care, skilled nursing facilities, home health and hospice for the aged and disabled, had assets of $244 billion at the start of 2012 but is projected to run out of money in 2024 as the population ages, according to estimates of the Medicare trustees. It is financed by payroll and self-employment taxes.

The study examined the impact of 29 million immigrants counted in the Census on the financing of the Medicare program. It included those who had become U.S. citizens as well as those who hadn’t, but, the authors noted, probably excludes many [undocumented] immigrants who dodged the survey.

The study found that in 2009, immigrants contributed $33 billion to the trust fund, nearly 15 percent of total contributions. They received $19 billion of expenditures, about 8 percent, giving the trust fund a surplus of $14 billion. People born in the United States, on the other hand, contributed $192 billion and received $223 billion, decreasing the trust fund by $31 billion, according to the paper’s lead author, Leah Zallman, a scientist at Cambridge Health Alliance in Massachusetts,

Between 2002 and 2009, immigrants generated a cumulative surplus of $115 billion for the trust fund, the study found. Most of the surplus contribution came from noncitizens. The immigrants created a net gain primarily because of demographics: There are 6.5 immigrants of working age for every one elderly immigrant, but only 4.7 working-age native citizens for every one retiree. Although that ratio could change in the future, the report notes that the Census Bureau projects that the share of immigrants in the United States will increase for the next 18 years.

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  1. Viviana on May 31, 2013 at 2:36 pm

    Interesting numbers. Might I suggest that Healthcare Now not continue to perpetuate the negativity associated with the usage of terms like “illegal immigrants”, and make the effort to understandably place this category of tax-paying immigrants as “undocumented” instead. Just a thought.

  2. Healthcare-NOW! on May 31, 2013 at 2:40 pm

    Thanks Viviana. This article is from Kaiser Health News and that’s their language. Didn’t realize it was in there and I’ll fix it. Sorry about that.

  3. Tim Schaeffer on May 31, 2013 at 11:35 pm

    This study seems to be limited to legal immigrants. Undocumented immigrants generally work for gray-market compensation (e.g. cash or barter) and therefore don’t contribute materially to the Medicare trust fund.