Republicans Require Health Insurance for
September 28, 2005
By Gene C. Gerard
month, Congress will consider an immigration reform bill introduced
by Senators John Cornyn (R-TX) and Jon Kyl (R-AZ). A component of
the bill would require employers to provide health insurance to
all workers who are registered immigrants. To be sure, immigrants
who lawfully enter the country to work, and who pay taxes, should
have access to health insurance. But this bill is poorly reasoned
and has the potential to create tremendous problems.
Although the bill will mandate that employers provide health insurance
coverage to immigrants, this is a luxury that no American enjoys.
Employers are not required to provide health insurance to citizens.
At the very least, this will provoke animosity and tension between
immigrants and citizens. At its worst, this will result in an increase
in American workers without insurance.
Employers are finding it increasingly difficult to keep up with
the pace of health care costs. According to a survey conducted by
Salary.Com, 90 percent of small businesses will spend more on their
employees' health insurance in 2005 than they spent in 2004. Half
of the companies surveyed reported that health care costs are increasing
at an average yearly rate of 10 percent to 20 percent. Almost one-tenth
of the companies in the survey complained that health care costs
are increasing at an annual rate of 30 percent or more.
A report released this summer by PricewaterhouseCoopers revealed
that one-fourth of large corporations have seen a double-digit increase
in health care costs in recent years. The companies surveyed for
the report indicated that per-employee health care costs have increased
12 percent since last year, and they expect an increase of 11 percent
for the coming year. These employers reported spending 12 to 15
percent of their annual payroll on health insurance. This is an
increase of eight percent since 2000.
According to a recent study by Hewitt Associates, most employers
will pay an average of 12.6 percent more for workers' HMO coverage
in 2006. HMOs insure approximately one-fifth of all privately insured
workers. Humana has announced the largest increase for 2006, at
23 percent. Kaiser-Permanente, a non-profit HMO, has announced the
smallest increase at 10 percent. WellPoint, the largest insurance
provider in America, intends to increase their rates by 16 percent
next year. UnitedHealth Group, the second largest insurer, has projected
an 11 percent increase for 2006.
The immigration reform bill, by mandating that employers provide
health insurance to their immigrant workers, would have a disastrous
effect on American workers. Some employers, perhaps even many, would
simply discontinue providing health insurance benefits to its workers
who are citizens. This would be the easiest way for employers to
offset health care costs. In fact, the Salary.Com survey found that
14 percent of businesses are already actively encouraging their
employees not to enroll in their health plans.
California, a state with a large immigrant population, has seen
a 13 percent decline in employer-sponsored health care since 2000
among low-wage earners. Among all workers, the state has experienced
a three percent decline in employer-sponsored health coverage in
the last five years. Arindrajit Dube, an economist at the University
of California-Berkley who recently analyzed that state’s health
insurance crisis noted, "The most alarming thing is that precisely
where we are seeing job growth in California, that is where we are
seeing the biggest declines of employer sponsored health care."
Nationally, the percentage of all companies offering health benefits
to their employees has declined nine percent since 2000, according
to a study by The Kaiser Family Foundation. This decrease has been
driven by a substantial decline in the percentage of small companies
(those with three to 199 employees) offering health insurance, which
has fallen from 68 percent to 59 percent in the last five years.
Fifty-seven percent of the smallest companies, those with less than
10 employees, no longer offer health coverage.
Many small companies, and even some large companies, will likely
discontinue health insurance to their workers who are American citizens
if the law forces them to provide coverage to immigrants. While
Republican Senators Cornyn and Kyl proposed this bill with good
intentions, the end result would almost certainly be fewer American
workers with health coverage. A more common-sense approach to the
widespread lack of health insurance is some form of universal health
care. Then, there would be no distinctions between American citizens
and registered immigrants.