As Congress proposes sweeping changes to America’s immigration policies, a new study finds that immigrant workers improve Medicare’s finances. These workers contribute billions a year more than immigrant retirees use in medical services.
The researchers are quick to point out that “Immigrants, particularly non-citizens, heavily subsidize Medicare”. “Policies that reduce immigration would almost certainly weaken Medicare’s financial health, while an increasing flow of immigrants might bolster its sustainability.”
In 2012, the Hospital Insurance Trust Fund, the component that pays for Medicare’s inpatient hospital care, skilled nursing facilities, home health and hospice (“Medicare Part A”), had $244 billion in assets. However, it is projected to run out of money as soon as 2024, according to the Medicare trustees. Medicare Part A is financed by payroll and self-employment taxes, making the balance between the retiree population and workers critical.
The study found that immigrants contributed nearly 15 percent to the trust fund in 2009, $33 billion in total. They received $19 billion in immigrant population expenditures, giving the trust fund a surplus of $14 billion. Conversely, people born in the United States contributed $192 billion and received $223 billion, decreasing the trust fund by $31 billion.
The study concluded that between 2002 and 2009, immigrants generated a cumulative surplus of $115 billion for the trust fund. The bulk of the surplus came from non-citizens. The net gain is the result of age 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.
The researchers wrote that changes in the nation’s immigration policy could increase revenue for the trust fund by eliminating vast amounts of under-the-table employment that does not collect payroll taxes.