Obamacare Bars Illegal Immigrants—and Sticks Hospitals With the Bill

Reimbursements for urban hospitals that serve undocumented residents are about to shrink drastically—but their patients aren't going anywhere.

Patients wait in line at Nuestra Clinica Del Valle in San Juan, Texas. (Eric Gay/Associated Press)

After the calamitous debut of Healthcare.gov, Obamacare enrollment is now rising steadily, offering much-needed good news about a program that has been bombarded with criticism. The bad news: There’s still a serious flaw in the Affordable Care Act that will require more than a few lines of code to fix.

Immigrants—including 11.7 million undocumented people—are either explicitly barred from accessing federal benefits or face significant restrictions on Medicaid and other programs for the poor. Excluding immigrants was a key concession offered to moderate Democrats and conservatives, who insisted that no tax dollars go toward the undocumented. But keeping immigrants out of the ACA means that states and cities with large immigrant populations are likely face a huge strain on their budgets in the coming years.

It gets worse: The law also trims $22 billion from Medicaid charity-care reimbursements. Those cuts were approved with the reasoning that when most Americans were required to have insurance, hospitals would be stuck footing fewer bills for the uninsured. That’s generally true, but the logic falls apart in immigrant hubs such as New York, where nearly 70 percent of uninsured patients in the city’s public hospitals and clinics are also undocumented.

“They are basically left with the same options as before, which are no options, really, for affordable health insurance,” says Jenny Rejeske, a health-policy analyst at the National Immigration Law Center. “Most of these people are part of mixed-status families. It's not like there's an undocumented population that lives separate from the rest of us, the rest of the country, the rest of Americans. These are people who are integrated into our communities. They have family here and kids who are citizens.”

Immigrants lacking papers aren’t the only ones staring down a health dilemma. Under the Clinton-era welfare overhaul, even most legal residents with green cards must wait five years before they can access Obamacare or other federal benefits, including Medicaid. They are eligible for private coverage, but often can’t afford it. New York's 4.3 million immigrants, for example, are three times more likely to be uninsured than the rest of its citizens.

There are no easy federal remedies. Even if the House of Representatives were to have a sudden change of heart and pass comprehensive immigration reform, the “path to citizenship” created by the Senate would leave undocumented people waiting a minimum of 10 years for benefits. An executive order may not help either. The Department of Health and Human Services recently declared that the 567,000 young people who have been shielded from deportation under Obama’s Deferred Action for Childhood Arrivals (DACA) program are still ineligible for Obamacare.

“One thing that could absolutely be done in short-term that would be tremendous help would be to remove this exclusion of DACA individuals from the ACA,” Rejeske says. “It's a pretty small population, they're lawfully present, they have Social Security numbers, they're working—excluding them was just a huge step backward for the ACA.”

The prognosis for legal immigrants is somewhat better thanks to an option called the Basic Health Plan (BHP), an Obama new program that will essentially reimburse states for creating their own low-cost plans. Washington, Minnesota, and New York are all already moving to adopt it, but frustrated officials have been waiting months for the feds to give them definitive cost estimates for final analysis. According to a report funded by the New York State Health Foundation, the BHP would cover 86,000 lawful immigrants currently on state-only funded Medicaid, and save the state up to $511 million.

The healthcare options available to the most needy immigrants are limited, and vary widely from state to state. States have the option of using federal funds to provide prenatal care to pregnant women whose lack of legal status makes them ineligible for Medicaid, and the Children's Health Insurance Program provides coverage to nearly 8 million children (not just immigrants) in families with incomes too high to qualify for Medicaid. Even so, the fear of deportation scares qualified families away.

“The undocumented parent may not get insurance or benefits that their citizen child is entitled to simply because they're concerned about their own immigration status,” says Jackie Vimo, advocacy director at the New York Immigration Coalition. “In other cases, they’re simply not aware that they’re even eligible for these programs.”

Vimo advocates for group markets modeled after New York’s Freelancers Union or Healthy San Francisco, a city-funded program for the poor that does not discriminate based on immigration status. Those solutions are years in the making. In the short term, undocumented adults in some states will qualify for emergency Medicaid, but only in dire circumstances.

“They'll get a Medicaid card that's only good for certain emergency services,” says Elisabeth Benjamin, vice president for health initiatives at the Community Service Society of New York. “If you get hit by a bus, or you throw your back out, or break your leg, if you have renal disease and you need renal dialysis—that kind of stuff.”

But even that narrow safety net has holes. Each month, the Mexican Consulate in New York hosts a support group for people with debilitating kidney problems. There are more than 40 regulars, but several more arrived at last month’s meeting due to recent changes in Medicaid that, according to consulate spokesman Carlos Gerardo Izzo Rivera, created “loss of access to vital medications.”

Vimo met with the group last month, and says many complained they are now only able to receive the care they need under emergency circumstances—emergencies that could otherwise be easily prevented.

“Many people who had been having dialysis medications covered for years suddenly found out the state was no longer covering it,” Vimo says. “They said that doesn't qualify as a medical emergency. But if you don't take your medications it will soon become an emergency situation—you'll be in emergency rooms and only then will emergency Medicaid kick in. It's a poor solution, both from a health point of view and financial point of view.”

Incredibly, some of the same people who left their homes behind and risked their lives crossing the border to reach the land of opportunity are now leaving because their native country offers superior health coverage. Izzo says that, in addition to advising people about resources, the consulate is also facilitating “repatriation for individuals wishing to return to Mexico and continue their healthcare alongside their families.”

That means enrolling in the country’s Seguro Popular system. Created in 2003, the public-insurance plan provides free, comprehensive healthcare to more than 50 million people. A 2008 report by the World Health Organization called it a successful example of “the democratization of health.” It is, in other words, precisely what Obamacare aspires to be.