The Commonwealth Fund Blog

New Opportunities to Increase Legal Immigrants' Health Insurance Coverage

December 13, 2013

Tags: access to care Affordable Care Act health insurance marketplaces Medicaid

Leighton KuBy Leighton Ku, Ph.D., M.P.H.

The nation is waiting to see whether the U.S. House of Representatives will act on immigration reform legislation that would create new pathways to citizenship. In the meantime, it is important to recognize that the Affordable Care Act (ACA) has already created new health coverage opportunities and responsibilities for millions of legal immigrants.

The law may begin to close the large coverage gap between immigrants and native-born adults. In 2012, almost three times as many noncitizen adult immigrants (47%) were uninsured as native-born adults (18%). As many as 6 million “lawfully present” immigrants—including those who have been residents for less than five years and thus are ineligible for Medicaid in most states—could potentially be helped through the ACA.

Health Insurance Marketplaces. While the ACA does not provide insurance coverage for undocumented aliens, immigrants who are “lawfully present” can purchase it in the new state health insurance marketplaces if they do not have public coverage or insurance through an employer. “Lawfully present” immigrants include noncitizen lawful permanent residents (i.e., those with green cards) and others who are legally present in the country, such as people with work or student visas. Immigrants working in small businesses can also receive coverage if their employers use the marketplaces to buy health plans for their employees.

Like citizens, lawfully present immigrants may receive premium tax credits to subsidize the costs of coverage through the marketplaces, if eligible. Premium tax credits are available to people with incomes between 100 percent and 400 percent of the poverty level, or up to about $46,000 a year for an individual. However, because many immigrants are not eligible for Medicaid because of the five-year waiting period, the ACA also lets lawfully present immigrants earning less than 100 percent of poverty receive tax credits.

Medicaid. The ACA did not change the immigrant-related eligibility rules for Medicaid. Since 1996, legal immigrants are eligible only if they are lawful permanent residents who have been present in the United States for over five years or are refugees, asylees, or members of a few other groups. Visa holders are generally ineligible for Medicaid. About half of the states now extend Medicaid coverage to lawfully residing children without a waiting period and slightly fewer states also cover pregnant women. Some states provide Medicaid-like coverage to other legal immigrants without a waiting period, but without federal matching funds.

However, about half of the states are expanding Medicaid eligibility under the ACA to childless adults and parents earning up to 138 percent of poverty, or about $16,000 for an individual. This means that more legal immigrants will be eligible for Medicaid in those states.

Basic Health Program Option. The ACA also enables states to create Basic Health Programs to cover people with incomes between 138 and 200 percent of poverty. States would be responsible for administering these programs and the federal government would cover 95 percent of the tax credits and cost-sharing reductions.

Lawfully present immigrants in this income bracket are eligible for the Basic Health Program; such immigrants earning less than 100 percent of poverty who are not eligible for Medicaid may also qualify. The U.S. Department of Health and Human Services recently issued proposed regulations for this option; it is not clear which states will adopt it.

Individual Responsibility. Like the native-born, lawfully present immigrants are required to have private or public insurance or be subject to a tax penalty. Since undocumented immigrants are not eligible for ACA assistance, they are not subject to the individual responsibility mandate. Immigrants will be exempt from the penalty if they have incomes below the federal tax threshold, lack affordable insurance options, or meet other exemption criteria (e.g., religious exemptions). This new obligation should further increase legal immigrants’ take-up of insurance.

Coverage Challenges. Historically, legal eligibility issues and cultural and language barriers have hindered immigrants’ ability to obtain health insurance. For the ACA to successfully boost coverage among this population, immigrants need to be aware of the new marketplaces and Medicaid benefits and understand how to enroll.

There are efforts under way to help educate immigrants and those with limited English proficiency about new coverage options. In most states, multilingual navigators or in-person assisters are available to help people apply for coverage. Regrettably, some states are placing roadblocks in the paths of navigators, which may deter enrollment of both citizen and noncitizen applicants. Yet, some marketplace websites, including healthcare.gov, have or plan to have information available both in English and Spanish, and sometimes other languages.

Securing high levels of immigrant participation will be important to the overall success of the ACA. After all, reducing the ranks of the uninsured depends, in large measure, on the extent to which we are able to improve insurance coverage and health care access for legal immigrants in the United States.

A more detailed analysis, "Strengthening Immigrants’ Health Access: Current Opportunities," is available on the George Washington University School of Public Health and Health Service website.