Kaiser Health News

$2 Billion Medicaid Program Helps Mostly Illegal Immigrants

By Phil Galewitz

KHN Staff Writer

Feb 12, 2013

During the debate over the 2010 federal health care overhaul, Democrats promised that illegal immigrants wouldn't be among the 27 million people who'd gain coverage. President Barack Obama repeated that pledge last month when he outlined his immigration plan.

But while federal law generally bars illegal immigrants from being covered by Medicaid, a little-known part of the state-federal health insurance program for the poor has long paid about $2 billion a year for emergency treatment for a group of patients who, according to hospitals, mostly comprise illegal immigrants. Most of it goes to reimburse hospitals for delivering babies for women who show up in their emergency rooms, according to interviews with hospital officials and studies.

The funding -- which has been around since the late 1980s and is less than 1 percent of the cost of Medicaid -- underscores the political and practical challenges of refusing to cover an entire class of people. Congress approved the program after lawmakers required hospitals to screen and stabilize all emergency patients regardless of their insurance or citizenship status.

Some groups say the services encourage people to cross the border for care, while advocates for immigrants say the funding is inadequate because it doesn't pay for prenatal care and other vital services.

"We can't turn them away," said Joanne Aquilina, the chief financial officer of Bethesda Healthcare System in Boynton Beach, Fla., which sees many illegal immigrants because of its proximity to farms where they harvest sugarcane and other seasonal crops.

Nearly one-third of Bethesda Hospital East's 2,900 births each year are paid for by Emergency Medicaid, the category that covers mainly illegal immigrants. The category includes a small proportion of homeless people and legal immigrants who've been in the country less than five years.

Hospitals can't ask patients whether they're illegal immigrants, but instead determine that after checking whether they have Social Security numbers, birth certificates or other documents.

"We gather information to qualify patients for something and through that process, if you really hit a dead end, you know they are illegal," said Steve Short, the chief financial officer at Tampa General Hospital.

A 2007 medical article in the Journal of the American Medical Association reported that 99 percent of those who used Emergency Medicaid during a four-year period in North Carolina were thought to be illegal immigrants.

The Federation for American Immigration Reform, which seeks to limit immigration, said the funding led more women to give birth in the United States, especially since they knew that children born here would be American citizens. The group believes that tens of thousands of "anchor babies" are born each year to illegal immigrants who hope that giving birth to children recognized as citizens will help the women gain legal status themselves.

Anyone born in the United States is a U.S. citizen. Itfs unclear how many mothers later get green cards or become citizens.

The Federation for American Immigration Reform doesn't dispute hospitals' right to be reimbursed for care they're required to provide.

"Our focus should be that you could save this money if you prevent the illegal immigration from happening in the first place. You can't do it after the fact," said Jack Martin, the special projects director for the organization.

Groups that advocate for immigrants say itfs foolish for Medicaid to pay only for the births and not for the prenatal care that might prevent costly and long-term complications for American children.

"Itfs a lose, lose, lose," said Sonal Ambegaokar, a health policy lawyer at the National Immigration Law Center, which advocates for low-income immigrants. She said denying broad insurance coverage to legal immigrants hurt doctors and hospitals financially, prevented patients from getting needed care and increased costs for the health system.

"There is no evidence that Emergency Medicaid is the cause of migration," Ambegaokar said. "Immigrants migrate to the U.S. for job opportunities and reunifying with family members."

Data that Kaiser Health News collected from seven states that are thought to have the highest numbers of illegal immigrants show that the funding pays for emergency services delivered to more than 100,000 people a year.

California hospitals get about half the $2 billion spent annually on Emergency Medicaid. The rest is spread mainly among a handful of states.

In 2011, for example:

The federal government doesnft require states to report how many people receive services through Emergency Medicaid payments to hospitals.

Legal immigrants whofve been in the United States less than five years aren't eligible for regular Medicaid coverage, though states have the option of extending it to children and pregnant women.

Despite the surge in overall Medicaid spending in the past decade, Emergency Medicaid costs have been remarkably stable. A 2004 study by the Government Accountability Office that looked at data from the 10 states with the highest expected Emergency Medicaid costs, reported $2 billion in spending. State officials say spending varies depending on immigration patterns and that during the economic slowdown, the number of illegal immigrants dropped.

The definition of emergency care and the scope of services available through the Medicaid programs vary by state. For example, in New York, Emergency Medicaid may be used to provide chemotherapy and radiation therapy to illegal immigrants. In New York, California and North Carolina, it may be used to provide outpatient dialysis to undocumented patients.

Other states have tried to narrow the definition of "emergency" to limit what's covered. "Each state has its own interpretation," said Jane Perkins, the legal director of the National Health Law Program, which advocates for the working poor.

Last year, for instance, Florida changed its policy to pay for emergency services for eligible undocumented immigrants only until their conditions had been "stabilized." Previously, its policy was to pay for care that was "medically necessary to relieve or eliminate the emergency medical condition."

Many hospitals -- particularly those in the immigrant areas of Miami and Tampa -- feared the change would cut millions of dollars in funding. An administrative law judge ruled in December that Florida had enacted the change improperly because it didn't go through a public hearing process; the state is appealing.

Short, the chief financial officer at Tampa General Hospital, said the $10 million the hospital collected each year to treat illegal immigrants was "very important to us." He noted that Medicaid pays the hospital about $1,500 for each day a Medicaid patient is in the hospital.

Jackson Memorial Hospital in Miami collects about $50 million a year in Emergency Medicaid funding, according to the state Agency for Health Care Administration.