Study: Immigrants a source of profit for private insurers

Immigrants with private insurance coverage paid 12.6% of overall premiums but only accounted for 9.1% of insurer expenditures, according to new research published in Health Affairs.

Previous studies have established that immigrants pay more into Medicare than they receive in benefits. Many immigrants have little choice for health insurance outside of private, non-Marketplace insurance plans, however, raising the question of how far premium payments go in terms of covering the cost of care for the immigrant population.

Answering that question is the key to understanding the overall economic effect of immigrant populations, according to the study’s lead author, Leah Zallman, M.D., director of research at the Institute for Community Health in Malden, Massachusetts, and an assistant professor of medicine at Harvard Medical School.

“The key piece that’s missing in the general conversation is we just look at the expenditure side and nobody talks or focuses on the contribution side,” she told FierceHealthcare.

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Zallman said she expected to find that immigrants were net subsidizers of private insurance given that they tend to be relatively young, healthy, working-age adults and are also likely to encounter barriers to seeking care.

But the size of the gap between expenditures and contributions came as a bit of a surprise. The study found that the net surplus in immigrant contributions in 2014 amounted to about $24.7 billion, surpassing total insurance company profits by $10 billion. Undocumented immigrants alone produced $7.6 billion of the surplus.

That wasn’t a one-off result, either. The study showed immigrants producing a relatively steady net surplus in their contributions between 2008 and 2014. And while researchers found that expenditures for immigrants rose over time, contributions kept pace.

Immigrants paid similar premiums compared to U.S. natives but accounted for far less in expenditures. 

Though the study doesn’t shed light on how access to care factors into that equation, the authors indicate that some policies certainly could play a part in generating the gap. For example, immigrants may face difficulties in obtaining medical interpreters or translators, since neither Medicare nor private insurers typically pay for those expenses.

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The healthcare industry has felt the effects of the immigration debate in a number of areas, both expected and unexpected. The presence and size of the connection between immigrant populations and private insurance industry profits throw another set of subtle pressures into the broader policy debate.

“Our study suggests that curtailing immigration—particularly undocumented immigration—would lead to less profit in the private insurance industry," Zallman said. "It’s unclear whether it would lead to increased premiums for others or decreased benefits or reduced networks, but certainly it would affect the risk pool."