Immigrants Fund Medicare and Social Security, Providing $115 Billion Surplus
Contrary to warnings from conservative think tanks like the Heritage Foundation, a new study shows immigrants pay far more into government services like Medicare and Social Security than they take out.
Between 2002 and 2009, immigrants paid $115 billion more into Medicare than they took out of the program according to a report in Health Affairs. In fact, policies aimed at reducing immigration favored by many conservatives would actually hurt Medicare, as well as related programs like Social Security, according to the study.
"Most of the surplus from immigrants was contributed by noncitizens and was a result of the high proportion of working-age taxpayers in this group," wrote the authors of the report. "Policies that reduce immigration would almost certainly weaken Medicare's financial health, while an increasing flow of immigrants might bolster its sustainability. Because Social Security's eligibility criteria and payroll tax-based funding closely track those of Medicare, our findings support the argument that immigration helps sustain Social Security."
Immigrants and undocumented workers tend to be younger than the general population, so they use fewer government services, especially those related to health care or retirement subsidies. But immigrants, both legal and undocumented, pay into the system. "Those with legal status contribute through payroll taxes under valid Social Security numbers. Undocumented immigrants often pay payroll taxes under Social Security numbers tied to invented names or belonging to someone else, because to comply with federal law employers must obtain a Social Security number from every employee. Less frequently, undocumented immigrants pay self-employment taxes (in lieu of payroll taxes) under individual tax identification numbers, which allows them to claim credit for their contributions should they eventually obtain legal status," says the study.
The authors of the report acknowledge that they personally support providing benefits to people regardless of immigration status, but they also suggest that immigration reform could be one of the best solutions to the looming Medicare crisis.
"Having ourselves witnessed immigrants dying needlessly because of lack of health care, we (and many of our colleagues) are motivated by the belief that all patients have a human right to health care. But economic concerns-including the worry that immigrants are driving up US health care costs-have often dominated the debate over immigration. Our data offer a new perspective on these economic concerns," they write.
"Providing a path to citizenship for currently undocumented immigrants would affect Medicare's finances in multiple ways. It would likely increase payroll tax collections by reducing immigrants' "off the books" employment and removing barriers that keep them out of higher-paying jobs," the authors concluded. "Encouraging a steady flow of young immigrants would help offset the aging of the US population and the health care financing challenge that it presents."
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