In the Aug. 31 edition, the Signal published a well-written and thoughtful letter entitled “Health Care for Illegal Immigrants.” In that letter, the author suggested that I might be able to evaluate the cost impact of certain provisions contained in Assembly Bill 133.
While I am honored that a reader would seek my analysis, unfortunately, my schedule does not permit me to undertake such a study and I lack the resources to do so. However, I thought I would share some preliminary thoughts about AB 133 as it pertains to providing health care to illegal immigrants.
For those who are not familiar with AB 133, it is a voluminous and comprehensive bill related to the administration of Medi-Cal benefits provided to low-income Californians that was passed on a straight party-line vote on July 15, with Democrats favoring and Republicans opposing. (Medi-Cal is the name given to California’s Medicaid plan.)
Gov. Gavin Newsom signed the bill into law on July 27. Unlike federal legislation, which provides easy-to-find analyses of the legislation’s impact on the federal budget, California law generally is less transparent and I was unable to find an analysis comparable to what is typically provided during the federal legislative process.
According to information provided by the California Medical Association, AB 133 “makes progress towards reducing health disparities and increasing access to health care for many Californians who have previously struggled to receive adequate care.” The California Medical Association is a professional association of California physicians.
Some of AB 133’s provisions expand health care services that are provided to people who are not legal California residents. The Aug. 31 letter to the editor raised some valid points about increased taxpayer costs of providing medical services to those who are not legal residents.
Clearly, we should not create a system that encourages people to come to California to obtain taxpayer-funded medical benefits.
However, to a large extent, we already bear the costs of providing medical care to illegal residents, so perhaps we should compare the existing costs with the costs of expanding Medi-Cal coverage to people regardless of their immigration status. We presently bear these costs in several ways.
Illegal residents are frequently poor people who lack the means to pay for medical care. Consequently, when they need care, they show up at hospital emergency rooms, which are among the most expensive treatment venues. Hospitals are generally required to treat these people. When patients cannot pay for the medical services provided, the hospital writes off what they owe as a bad debt expense, which gets built into the cost of providing services to patients and insurance companies who can pay.
One of the arguments in favor of expanding Medi-Cal services to these people is that they can be directed to less expensive treatment options. Furthermore, AB 133 supporters believe Medi-Cal expansion will encourage affected patients to seek care sooner, when it is less expensive to treat.
Poorer people generally live in more densely populated housing, which makes the spread of communicable disease more prevalent among those communities. This is true with influenza and is especially true with COVID-19. Allowing poor people, including those who are illegal immigrants, to obtain care sooner through the use of Medi-Cal benefits probably slows down the overall spread of communicable diseases. Those who are here illegally interact with the remainder of the population, so earlier treatment of the illegal population may reduce the spread of disease among the entire community. The California Medical Association believes that providing health care to all Californians, regardless of their documentation status, improves the state’s overall public health.
A large segment of the illegal community participates in the underground economy where people are paid lower wages “under the table” without medical benefits or workers compensation insurance. While this lowers the consumer’s cost of those services that are provided by undocumented workers, the under-the-table arrangement has effectively shifted a portion of the cost of such services to health care providers, and ultimately, to those who can afford to pay for health care services.
I have not seen any sort of cost-benefit analysis, but intuitively, these arguments are plausible. However, plausibility does not infer proven cost savings. Preparing a cost-benefit analysis is an extensive undertaking that will require input from epidemiologists, economists and cost accountants. Such analysis would likely contain numerous subjective assumptions and would undoubtedly be subject to varying interpretations.
Whether the Medi-Cal expansion increases the overall societal cost of providing health care to those who are here illegally, or whether there is an overall cost savings, remains to be seen.
Jim de Bree is a CPA who resides in Valencia.