Shout Draws Focus to Illegal-Immigrant Issue
Coverage Question Is Complex, Experts Say, but Less Ominous Than Reform Foes Warn

By Alec MacGillis
Washington Post Staff Writer
Friday, September 11, 2009

Republican Rep. Joe Wilson's shout of "You lie!" during President Obama's speech Wednesday night brought renewed attention to swirling questions about whether Democratic health-care legislation would extend coverage to illegal immigrants. Although the answer is more complicated than reform proponents acknowledge, it also does not square with the dark warnings of opponents who say the proposals would bring waves of undocumented immigrants into taxpayer-funded plans.

To counter claims that universal health care would cover illegal immigrants, Democrats and independent arbiters have pointed to language in the House legislation that says the federal subsidies, or "affordability credits," that would be the main avenue to expanding coverage would not be available to illegal immigrants.

This language does not assuage the bill's critics, who say the proposals lack the verification tools needed to assure that illegal immigrants do not gain coverage either through federal credits or expanded Medicaid eligibility for the poorest of the uninsured.

House Republicans have proposed amendments to close potential loopholes, but those measures have so far failed in committee. House Democrats say that the stricter rules could prevent eligible people from getting coverage and that eligibility regulations would be drawn up by federal officials. The bill's opponents say such a process would be inadequate.

"The other side appears to be saying, 'Trust us, [the government] will do the right thing.' Well, the trust issue is the core problem in immigration -- the political class is telling the public, 'We'll do the right thing,' and the public doesn't believe them," said Mark Krikorian, director of the Center for Immigration Studies, which advocates for stricter immigration policy.

But many tax and social policy experts say the concerns over undocumented immigrants taking advantage of health-care reform are overstated, if not unfounded. The thorniest immigration issue, they say, may be sorting out how subsidies or Medicaid eligibility would work in families with both legal and illegal residents.

"Will some illegal immigrant get [help]? Probably. Will it be this big problem? Probably not," said Gerald Prante, an economist with the nonpartisan Tax Foundation.

It is estimated that there are 6 million to 7 million illegal immigrants without health insurance and that several million more have obtained coverage through employers or on their own. Taxpayers already subsidize health care for illegal immigrants -- Medicaid reimburses hospitals for emergency treatments for undocumented immigrants, most notably for childbirth. But studies have found that illegal immigrants spend much less on health care than others in the United States, partly because they are wary of interacting with the medical system and the government -- a fear that experts say would keep many of them from trying to exploit the new system.

The Democratic proposals call for covering most of the uninsured by getting them to buy plans on a new "exchange" where they could choose among private plans -- and possibly a government-run plan -- with the help of subsidies for those with low and modest incomes. Illegal immigrants would neither qualify for subsidies nor be required to buy insurance, as everyone else would be, though they could purchase plans on the exchange.

Tax policy experts say it would be difficult for illegal immigrants to obtain subsidies, because eligibility would be based partly on people's tax returns. It is true, they say, that many illegal immigrants pay payroll taxes using phony Social Security numbers, but they rarely file tax returns, and those who do almost always use "personal identification numbers" from the IRS, which essentially flag them as illegal immigrants. That is why it is very hard for them to obtain the earned-income tax credit.

"It would be exceedingly difficult for undocumenteds to game the system" by using a bogus Social Security number to apply for subsidies, said Alan Berube of the center-left Brookings Institution.

Activists fighting illegal immigration and House Republicans pushing for stricter rules want the legislation to mandate proof of legal status, such as requiring a birth certificate or using the Systematic Alien Verification for Entitlements, or SAVE, database, which tracks legal immigrants. They say such measures have prevented large numbers of illegal immigrants from enrolling in Medicaid.

Health-care reform proponents disagree, noting that few illegal immigrants enrolled in Medicaid even before proof of citizenship was required and that such requirements have disqualified tens of thousands of eligible citizens because they lack ready birth certificates.

That is why congressional Democrats have since moved to loosen that requirement for Medicaid. Reform proponents say adding back such rules for Medicaid or for the subsidies on the exchange would be costly and would apprehend relatively few illegal immigrants, at the risk of raising hurdles for those who are eligible.

They say that federal regulators may well end up using the SAVE database but that for Congress to impose strict standards now could result in overly blunt measures.

"Everyone agrees that [illegal immigrants] shouldn't be covered, and they're not going to be," said Edwin Park, a health-care expert with the left-leaning Center on Budget and Policy Priorities. "There's no clear evidence that the system is so vulnerable, so this would be a solution to a problem that doesn't exist but that causes problems for eligible people."

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