The Sinking Lifeboat: Uncontrolled Immigration and the U.S. Healthcare System

FAIR's Healthcare Report
February 2004

America's health care system is in crisis: Costs and insurance premiums are skyrocketing, the number of the uninsured is rising rapidly, providers are reducing staffing and services and increasing rates, and hospitals are closing or facing bankruptcy.

As states cut their health care budgets to try to make ends meet, high rates of immigration are straining the health care system to the breaking point. One out of every four uninsured people in the United States is an immigrant. When the 3.5 million immigrants receiving insurance through publicly funded Medicaid are factored in, almost half of immigrants have either no insurance or have it provided to them at taxpayers' expense.

In some hospitals, as much as 2/3rds of total operating costs are for uncompensated care for illegal aliens. Although a national total of annual unreimbursed medical expenses for illegal aliens is not available, it is clear that those costs are more than one billion dollars, given estimates for Texas ($393 million), Los Angeles ($350 million), Florida ($40 million), and U.S.-Mexico border counties ($300 million).

The problem is on the rise: Immigrants (legal and illegal) who arrived between 1994 and 1998 and their children accounted for 59% of the growth in the size of the uninsured population in the last ten years. Federal laws requiring hospitals to treat anyone who enters an emergency room regardless of ability to pay have created an unfunded mandate for states and localities to fund health care for non-U.S. citizens and illegal aliens.

Yet at the same time, lack of enforcement of federal laws against illegal immigration has led to a pool of 9 to 11 million illegal aliens in the U.S.—and state and local taxpayers are being forced to foot the bill. Although immigration law enforcement is a federal responsibility, most hospitals receive little or no reimbursement for the care to immigrants that the federal government mandates that they provide.

Lack of insurance leads many immigrants to use hospital emergency departments—the most expensive source of health care—as their primary care provider. Emergency room visits increased by 20% in the last decade. The problem has become so out of control that some Mexican ambulance companies are now instructing their drivers to drive uninsured patients across the border to the United States, where they will receive free treatment.

The increase in uncompensated care for immigrants has forced some hospitals to reduce staff, increase rates, cut back services, and close maternity wards and trauma centers.