Partnership for a New American Economy, August 5, 2014
The Partnership for a New American Economy’s new report, Staying Covered: How Immigrants Have Prolonged the Solvency of One of Medicare’s Key Trust Funds and Subsidized Care for U.S. Seniors, shows that immigrants are key contributors to Medicare’s Hospital Insurance Trust Fund, a pool of money covering hospital and home health care for 50 million Americans.
Key report findings include:
- 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 the Partnership for a 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.