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Republicans Require Health Insurance for Immigrants Only

September 28, 2005
By Gene C. Gerard

Next 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.

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