2004 September 13 Monday
Rising Health Costs Increasing Cost Of Low Wage Immigrants

The Kaiser Family Foundation has released their Employer Health Benefits 2004 Annual Survey. The survey shows that lower income people (a large and increasing fraction of which are immigrants) can not afford health care insurance. (same press release here)

Washington, DC – Employer-sponsored health insurance premiums increased an average of 11.2% in 2004 -- less than last year’s 13.9% increase, but still the fourth consecutive year of double-digit growth, according to the 2004 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust (HRET). Premiums for employer-sponsored health insurance rose at about five times the rate of inflation (2.3%) and workers’ earnings (2.2%).

In 2004, premiums reached an average of $9,950 annually for family coverage ($829 per month) and $3,695 ($308 per month) for single coverage, according to the new survey. Family premiums for PPOs, which cover most workers, rose to $10,217 annually ($851 per month) in 2004, up significantly from $9,317 annually ($776 per month) in 2003. Since 2000, premiums for family coverage have risen 59%.

The survey also found that the percentage of all workers receiving health coverage from their employer in 2004 is 61%, about the same as in 2003 (62%) but down significantly from the recent peak of 65% in 2001. As a consequence, there are at least 5 million fewer jobs providing health insurance in 2004 than 2001. A likely contributing factor is a decline in the percentage of small employers (three to 199 workers) offering health insurance over this period. In 2004, 63% of all small firms offer health benefits to their workers, down from 68% in 2001.

“The cost of family health insurance is rapidly approaching the gross earnings of a full-time minimum wage worker,” said Drew Altman, President and CEO of the Kaiser Family Foundation. “If these trends continue, workers and employers will find it increasingly difficult to pay for family health coverage and every year the share of Americans who have employer-sponsored health coverage will fall.”

“Since 2000, the cost of health insurance has risen 59 percent, while workers wages have increased only 12 percent. Since 2001, employee contributions increased 57 percent for single coverage and 49 percent for family coverage, while workers wages have increased only 12 percent. This is why fewer small employers are offering coverage, and why fewer workers are taking-up coverage,” said Jon Gabel, vice president for Health Systems Studies at the Health Research and Educational Trust.

When people can not afford their own medical insurance then they join the Recipient Class who get more than they pay. Taxpayers who pay more in taxes than they receive in benefits end up footing the bill. Demographic trends worsened by immigration are increasing the size of the Recipient Class (see second table on that page in particular). But rising costs for medical care also do so because higher medical costs raise the level of income one has to earn in order to reach the break even point where one pays as much in taxes as one receives in government-provided (i.e. taxpayer-provided) benefits.

High levels of Hispanic immigration, Staggering Hispanic immigrant illiteracy rates, and sustained poor academic performance even into the 4th generation descendants of Hispanic immigrants already are producing a growing recipient class. But the higher costs for medical care will increase the amount that taxpayers will pay to subsidise "cheap" immigrant labor. On top of that we get the burden of higher rates of Hispanic criminality and the spread of Hispanic criminal gangs.

If crowding, pollution, crime, and higher taxes aren't all reasons enough to do something about this huge and growing problem then perhaps the threat of terrorists coming across the border will eventually force effective border control. Though I suspect we will have to wait till a bunch of Americans are dead before the anger of the public becomes large enough to overrule the desires of the elites.

Share |      By Randall Parker at 2004 September 13 01:23 PM  Immigration Economics

John S Bolton said at September 13, 2004 8:40 PM:

Another way to look at the costs of medical care for immigrants is to note the health care costs per person throughout the country. The NYT of 1-9-04, p.a16, reports the official figure of $5,440 for '02. The out-of-pocket share of this sum was only ~14%. It has often been stated that the elderly get around half of the total medical expenditures. If so, then charge the adult immigrant, or those who are not elderly, $2700+$1300 for one child for every two of them, =$4,000, as their imputed premium.Yet probably less than 10% of immigrants who've been here less than 25 years, would pay more than $4,000 a year in taxes, apiece. Median per capita incomes of 80's and 90's immigrants are only around $15,000. The over $30,000 per individual income is a small fraction of that main group of immigrants, and an even smaller fraction of more recent ones. Yet they would need to be in the top percentiles of their demographic to pay more than $4,000 in taxes, or any net taxes.

John S Bolton said at September 15, 2004 1:57 AM:

If the immigrants' imputed premium were lower than that given for families in the above report, say $8,000 per year per family of four; and one combines that with the median personal income of foreign-born of less than $16,000, the result is that they would have to be at a 50% tax rate , just to cover this one cost. If both parents work and earn at the median of this population, they would have to be taxed 25%, to cover health expenses only. If they have one child in public school at $8,000 a year, that two-income immigrant household would be at a 75% tax rate, just for those two items. Yet the media, officialdom and professoriate tell us, with rancor and malicious rage against patriots who dare to mention such matters, that we are not beset by massive assisted immigration.

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