Report Finds Immigrants Contributed Net of $182.4 Billion to Medicare’s Core Trust Fund Between 1996 and 2011

 

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Ryan Williams, New American Economy, rwilliams@fp1strategies.com

Immigrants subsidized Medicare Trust Fund During Great Recession, including a $16.3 billion surplus in 2008 

New York, NY — New American Economy today released a new report showing that between 1996 and 2011 immigrants contributed $182.4 billion more to Medicare’s Hospital Insurance Trust Fund, a pool of money covering hospital and home health care for 50 million Americans, than was expended on their benefits. This surplus stands in sharp contrast to the $68.7 billion deficit the U.S.-born population generated during the same period, and without it, the core trust fund would be nearing insolvency.

“Some critics of immigration reform argue that immigrants are a drain on our entitlement programs, but our report shows just the opposite,” said John Feinblatt, Chairman of New American Economy. “Immigrants have helped our economy grow, and their paycheck deductions actually subsidize government healthcare coverage for millions of Americans.”

Key Findings

  • Immigrants are subsidizing Medicare’s core trust fund. In the period from 1996 to 2011, immigrants contributed $182.4 billion more to Medicare’s Hospital Insurance Trust Fund than was expended on their benefits. Immigrants generated multibillion-dollar surpluses in the trust fund during every year examined in our study. In the average year between 1996 and 2011, they contributed $11.4 billion more to the trust fund than was expended on their care.
  • Immigrants played a critical role subsidizing Medicare’s Hospital Insurance Trust Fund during the recent recession. From 2008 to 2011, a period when the great recession and its after effects eroded trust fund contributions, Medicare’s Hospital Insurance Trust Fund operated at a deficit, failing to bring in enough contributions to fully cover costs each year. Immigrants, however, continued to generate surpluses in the program during this time, including a $16.3 billion surplus during the height of the recession in 2008.
  • Medicare’s Hospital Insurance Trust Fund would be nearing insolvency if not for the contributions of immigrants in recent years. If immigrants had not participated in the Medicare program from 1996 to 2011, Medicare’s core trust fund would be expected to become insolvent by the end of 2027. This is roughly three years earlier than currently predicted by the Medicare Trustees.
  • The role immigrants play subsidizing Medicare’s Hospital Insurance Trust Fund distinguishes them from the broader population. While immigrants contributed a net of $182.4 billion from 1996 to 2011, the U.S.-born population generated a deficit of $68.7 billion during the same period.

This report was prepared for New American Economy by Leah Zallman of the Institute for Community Health and Cambridge Health Alliance at the Harvard Medical School. It builds on a study the author previously published in the peer-reviewed journal Health Affairs.

See the full report, “Staying Covered: How Immigrants Have Prolonged the Solvency of One of Medicare’s Key Trust Funds and Subsidized Care for U.S. Seniors.”

About NAE

New American Economy is a bipartisan research and advocacy organization fighting for smart federal, state, and local immigration policies that help grow our economy and create jobs for all Americans. More…