Amnesty Would Entail Massive Medicaid Costs

From Human Events and Vision To America:

Amnesty Means Massive Medicaid Costs


by James R. Edwards, Jr.



08/16/2010







If Congress pushes through amnesty, hold onto your wallets. Taxpayers will get robbed and illegal aliens rewarded.



The 11 million illegal aliens who get legalized will then qualify for many taxpayer-funded government programs, including health premium subsidies, the Earned Income Tax Credit and Medicaid. This redistribution of wealth will add billions to the government’s red ink—not to mention deprive productive Americans of their own money.



To get a handle on the size of amnesty’s fiscal consequences, consider the impact on a single program: Medicaid.







Medicaid is an entitlement program, meaning if someone meets the eligibility criteria, then benefits must be provided. This is a welfare program, meaning eligibility is based on low income.



It is guaranteed benefit, meaning there’s no per-beneficiary cap to cause self-restraint. It’s also federal-state, meaning taxpayers get hit twice—paying both state and federal taxes—and states can’t easily buck federal Medicaid mandates. Medicaid has become one of the biggest unfunded liabilities and out-of-control cost drivers saddling state budgets.



Medicaid, Medicare and Social Security are the greatest causes of our runaway federal spending. These entitlement programs gobble up about one-tenth of GDP and are expected to double that by 2055.



This “mandatory” spending is on track to eat up the entire federal budget before the end of the century. It already amounts to two-thirds of all federal spending. All of Obama’s and the Democratic Congress’s profligacy in discretionary spending (e.g., education, energy) is pocket change compared to entitlement spending.



It gets worse: Obama’s health reform expanded the Medicaid program. Starting in 2014, incomes up to 133% of the official poverty level can get healthcare through Medicaid. A third above the poverty level is income of about $29,000 for a family of four.



An estimated 20 million people will join the Medicaid rolls by 2019 under Obamacare. Medicaid’s 2008 enrollment was 43.5 million.



About half the costs of the health law, or around $410 billion, will be spent on Medicaid. You can bet money government prognosticators have underestimated the eventual price tag.



Recall the President’s assertion that his health reform wouldn’t cover illegal aliens. After Rep. Joe Wilson(R.-S.C.), called him out on that point, legislators added a loophole-ridden measure purported to screen out illegal aliens.



But what happens if an amnesty grants 11 million illegal aliens legal status? They can then take part in a lot of public programs such as Medicaid that they previously only could use through fraud.



If Obama, Nancy Pelosi and Harry Reid launder the status of illegals, taxpayers foot the bill. The tax collector of Big Government will come calling again.



Millions of New Beneficiaries



It gets even worse: Looking at Medicaid alone, the fiscal consequences of amnesty add up to real money. About 3.1 million illegal aliens earn less than a third above poverty wages, census figures show. These would become new Medicaid beneficiaries.



Covering 3.1 million newly legalized, poor aliens would run an extra $8.1 billion a year in new Medicaid costs. Over Obamacare’s initial budget window, that would total $48.6 billion.



That total reflects only spending over six years, 2014-2019, because Obamacare Medicaid benefits don’t start at the beginning of the budget decade. This fact has much to do with Obamacare’s budget smoke and mirrors, the sneaky ways politicians hide true taxpayer costs.



Amnesty’s $80 Billion for Medicaid



Conservatively, Obama’s Medicaid expansion and any mass amnesty will together increase the annual Medicaid costs of lawbreaking aliens by more than Obamacare’s extra Medicaid costs without amnesty. The cost of amnesty to Medicaid alone will run more than $80 billion over a full decade.



Worse goes to worst: The unfunded fiscal liabilities of amnesty to Medicaid will be much higher than estimated, once chain migration is factored in. Each former illegal alien will be able to sponsor distant relatives for visas, and you can bet money those relatives have about the same socioeconomic characteristics and eventually will qualify for the same public programs.



Therefore, amnesty will slap taxpayers with an $8.1 billion a year Medicaid bill. That cost will continually grow because of budgetary underestimation and a pipeline of new Medicaid constituents through chain migration.



The only rational conclusion: Amnesty is fiscally irresponsible, exacerbates the unsustainability of entitlement spending and adds to the demise of the American middle class.







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Mr. Edwards is coauthor of The Congressional Politics of Immigration Reform.



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