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DataWatch

Legal Status And Health Insurance Among Immigrants

Abstract

 
The foreign-born represent a disproportionate share of nonelderly U.S. adults without health insurance. Using data from Los Angeles County, we find that most of the insurance disparities between the foreign-born and native-born can be explained by traditional socioeconomic factors. Undocumented immigrants, however, have lower rates of coverage—both private and public—even after a wide array of factors are controlled for. Applying Los Angeles County rates to the U.S. population implies that undocumented immigrants account for one-third of the total increase in the number of uninsured adults in the United States between 1980 and 2000.

Several studies have documented a disparity in health insurance coverage between immigrants and natives, but our understanding of why this disparity exists is incomplete.³ The few studies that exist find that the gap in insurance coverage persists even after health status, employment sector, occupation, and a limited set of other socioeconomic variables are controlled for. Uninsurance is also more common among noncitizen immigrants.⁴

None of this research examines the relative importance of legal status. Immigrants are a heterogeneous population across nationality, visa, and legal status. Given the rapidly rising numbers of undocumented immigrants, this diversity has important implications for the likelihood that an immigrant has health insurance, whether that insurance is provided through private or public sources, and overall rates of health insurance in the population. We provide such an examination using unique data from Los Angeles County, one of the largest and most diverse U.S. counties and a major destination for immigrants, both legal and otherwise.

Study Data And Methods

Top Study Data And Methods Study Results Discussion NOTES

 
Data. Research on the health insurance of immigrants has been severely limited by the quality of the available data. Most general social science surveys include the foreign-born only in proportion to their representation in the population. Relevant information on immigrant attributes is often unavailable, because these surveys are principally targeted to more numerous nonimmigrant populations. Most important, immigrants’ legal status is frequently missing, because of a perceived sensitivity about the question or the limited numbers of undocumented immigrants included in health surveys.

To remedy these deficiencies, we used data from the Los Angeles Family and Neighborhood Survey (LAFANS). LAFANS is based on a stratified random sample of sixty-five census tracts in Los Angeles County with oversampling of poor neighborhoods. Fieldwork for LAFANS began in April 2000 and was completed by the end of 2001.⁵ Within each neighborhood, households were randomly selected to determine if a household was eligible to be interviewed—that is, there was an adult who spoke English or Spanish well enough to complete a screener. Only 2 percent of sampled households (n = 74) were unable to communicate because of language barriers. Screener interviews were completed with 3,085 households. In each selected household, one adult was selected at random for interview, and 2,543 completed the survey (response rate, 82 percent). After we excluded 108 elderly respondents and 37 observations with missing data, our analysis sample consisted of 2,398 respondents ages 18–64. We excluded the elderly because of near-universal Medicare coverage in this age range and because, nationwide, 86 percent of adult immigrants and 97 percent of adult undocumented immigrants were in the 18–64 age group.

Administering the interview in only English or Spanish should not bias the results in a measurable way. Using data from the 2000 census, we found that 96.5 percent of the county’s population either speaks Spanish as a native language or reports speaking English "well" or "very well." Furthermore, when we compared our race/ethnicity distribution with that of the census, we found a close correspondence, even among Asians.

Immigrant status. To determine legal status, we asked the foreign-born if they were U.S. citizens; if they were not, we asked if they were permanent residents ("had a green card"). If the answer was no, we asked if they had been granted asylum, refugee status, temporary protected immigrant status, a student or tourist visa, or another document permitting them to stay in the United States for a limited time. People answering affirmatively to any of these questions and reporting that their documents had not expired were classified as "nonimmigrant." The remainder of the foreign-born were classified as "undocumented."

This method of classifying legal status is well-accepted in surveys of immigrant populations. We compared our estimates with population estimates available from other sources. Our LA County estimates of the foreign-born and naturalized populations correspond quite closely with the 2000 census, and our estimates of the number of non-naturalized, non–permanent resident immigrants are quite close to those produced by the California Health Insurance Study.⁶

Insurance status. Respondents were asked about their insurance status at the time of the survey and during the previous two years, including the start and end dates (if not ongoing) and the type of coverage. Answers were used to classify insurance during the previous two years as always insured, partially insured, or always uninsured.

Analysis. We estimated probit regression models—weighted to account for the LAFANS design—to explain insurance status as a function of individual characteristics. Our primary interest was the differences in uninsurance rates between native-born citizens, immigrant citizens, permanent legal residents (green-card holders), foreign-born on temporary visas, and undocumented foreign-born. Other mediating factors include age, race, sex, education, marital status, employment, number of employment changes in the past two years, industry of last job, income, assets, and residence changes (Exhibit 1).

Study Results

Top Study Data And Methods Study Results Discussion NOTES

 
Socioeconomic differences. In LA County, there are 5.7 million people ages 18–64 who speak English or Spanish; 2.6 million are foreign-born (Exhibit 1).⁹ More than one-quarter of the foreign-born and 12 percent of the entire nonelderly population is undocumented. Because of the small size and diverse makeup of the nonimmigrant category, our discussion of temporary legal residents here is limited.

The foreign-born are far more likely than the native-born to be Hispanic and to have lived or worked outside the United States within the past two years. Age differences between the two populations are small, but a slightly larger fraction of the foreign-born are married. There are also vast differences across household income, education, home ownership, and assets. Since all of these markers of socioeconomic status (SES) are known to be quantitatively important predictors of possession of health insurance, the magnitude of these SES disparities by nativity suggests that differences in resources between these two populations may be an important reason for the lower rates of health insurance among the foreign-born. Although overall employment rates are quite similar, immigrants are far more likely to work in food and agriculture, personal services, or textiles—industries known to be less likely to offer health insurance to their employees.

Comparisons between the native-born and all foreign-born belie substantial differences among immigrants (Exhibit 1). Differences between undocumented and citizen immigrants are especially stark. The undocumented are 94 percent Hispanic, whereas 50 percent of citizen immigrants are white or Asian. Undocumented immigrants are twelve years younger on average, and only 5 percent have a college degree. The undocumented hold very few assets, whereas more than half of citizen immigrants own a home. Mean household income of citizen immigrants is more than three times that of undocumented workers.

Current insurance. Uninsurance rates for the foreign-born are twenty-four percentage points higher than those of natives (Exhibit 2). But differences within the foreign-born population are even greater, with rates of uninsurance as high as 68 percent for undocumented immigrants compared to 23 percent for citizen immigrants. Some clues to understanding these differences might lie in the distinction between private and public health insurance. Although the foreign-born rely less on all three sources of health insurance (employer, individual, and public), the differences are most pronounced for employer-based coverage. Within the foreign-born group, immigrant citizens look remarkably like the native-born for all three sources. Legal permanent residents have much less access to job-based coverage and slightly less access to public insurance.

In California, undocumented immigrants can apply for Medicaid (Medi-Cal) coverage just as any ordinary citizen would, but the benefits are not as generous. Coverage is restricted to emergency (including labor and delivery), prenatal, and long-term care. These services, as well as nonemergency services for recent legal immigrants, do not qualify for federal funds and are financed fully by the state.

The undocumented can also purchase health insurance privately. For example, Mexican immigrants can purchase health insurance from Blue Cross of California (and other providers in California) using only identification cards issued by the Mexican consulate. In the group market, there is no legal burden for the insurer to confirm that a worker is legally entitled to work in the United States. Many employers will provide scrambled identification numbers to health plans in lieu of Social Security numbers to preserve privacy, making verification impossible.¹⁰

Continuous coverage. Health insurance is most useful if one can count on it over time, and there are salient differences by nativity in this dimension as well. Three-fourths of native-born adults were continuously insured during the previous two years (Exhibit 2). The remaining one-quarter were equally likely to have been continuously uninsured or to have had some insurance during that period. In contrast, one in five undocumented immigrants were continuously insured during the previous two years. Of the rest, the vast majority were uninsured the entire period. Uninsurance is a chronic state for undocumented workers. As before, permanent legal residents fell between undocumented immigrants and citizen immigrants on this spectrum, but about a third of them persistently lacked health insurance.

Exhibit 3 provides a complementary perspective on the relationship between current and chronic uninsurance. For each group, the permanence of health insurance is listed, conditional on insurance status at the time of the survey. Coverage among the insured native-born was fairly stable for the two prior years. In contrast, there was more churning among the native-born who lacked health insurance when LAFANS was fielded. Almost one-third had some health insurance during the previous two years.

Factors contributing to uninsurance. The foreign-born in LA County are much more likely to be Hispanic than any other ethnicity, and Hispanics are most likely to be both chronically and currently uninsured (Exhibit 4). There is also a strong gradient in chronic and current insurance in measures that are standard proxies for SES: education, household income, and assets. For example, only half of those in the lowest income quartile have health insurance, compared with 92 percent of those in the highest. Since these SES measures are highly correlated with immigrants’ legal status, they could play a key role in explaining differential coverage.

Our multivariate analysis is designed to decompose the contributions of these socioeconomic factors to the likelihood of being uninsured.¹¹ The first row in Exhibit 5 shows the unadjusted disparity—the percentage-point difference in rates of chronic and current health uninsurance for each type of immigrant compared to the native-born. (By way of orientation, Exhibit 2 showed that current uninsurance rates were 68 percent for undocumented, 49 percent for nonimmigrants, 38 percent for permanent legal residents, and 23 percent for immigrant citizens. Subtracting from these rates the 17 percent uninsurance rate among the native-born yields the disparities in the top row of Exhibit 5.) Most strikingly, there is a fifty-one-percentage-point unadjusted disparity in current uninsurance, and a fifty-three-percentage-point unadjusted difference in chronic uninsurance, between the undocumented and the native-born. Although not as dramatic, the unadjusted disparities for all other types of immigrants are large, except for immigrant citizens.

The final row in Exhibit 5 documents the unexplained disparity after all factors are adjusted for. With the exception of undocumented immigrants, the variables included in our model collectively come close to accounting for the entire disparity in uninsurance of immigrants, especially for the chronically uninsured, for whom essentially no unexplained disparity remains. For the undocumented, however, there is a disparity of sixteen percentage points (in current health insurance) and nine percentage points (chronic health insurance) unexplained.

Private versus public coverage. It is useful to identify how much of the disparity in uninsurance is attributable to the difficulty in obtaining private or public insurance, especially for the undocumented. To examine this issue, we estimated our model using private insurance as the outcome.¹² We then used the KSV decomposition method to estimate disparities in private insurance coverage that cannot be explained by our model variables. Finally, we calculated disparities in public insurance coverage using the mathematical identity that the sum of private and public uninsurance disparities must equal zero.

There is little difference in public insurance rates among the legal foreign-born that cannot be explained (Exhibit 6). The unexplained disparity is least (in absolute value) for immigrant citizens—only minus one percentage point—which suggests that there are few de facto restrictions on public insurance for this population because of their immigrant status. Permanent legal residents appear to face more restrictions, with an unexplained disparity (minus three percentage points). The discrepancy is greatest for undocumented workers (minus eleven percentage points), so more than half of the low rates of health insurance among undocumented immigrants are attributable to their lack of access to public coverage.

Top Study Data And Methods Study Results Discussion NOTES

These rival concerns have been expressed in heated legislative debates and actions. In November 1994, Californians passed Proposition 187, which sought to limit health services provided to illegal immigrants and their children. In 1996 Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) to overhaul the public welfare system. Prior to this act, both citizens and noncitizens were equally eligible for Medicaid and other public services. Welfare reform drew a distinction between these two groups, and it limited federal benefits for future immigrants. States were given the option to include immigrants already here in 1996 in their Medicaid programs. Legal immigrants arriving after August 1996 were barred from Medicaid coverage for the first five years of residency, except in emergencies. Although federal reimbursement is not available for this population, some states, including many with large immigrant populations, chose to use their own funds to enroll some groups of recent immigrants. The following year Congress enacted similar eligibility restrictions as part of the State Children’s Health Insurance Program (SCHIP). In 2004 Arizona voters passed a proposition limiting benefits that can be received by undocumented immigrants. Since issues about immigrants’ access to health insurance are not going away, having a more factual basis for the continuing policy debate is essential.

Evaluated over a two-year period, chronic uninsurance is far more common among the foreign-born and, within immigrants, five times more likely among the undocumented. But with the sole exception of the undocumented, virtually the entire higher rates of chronic uninsurance can be explained by factors other than their immigrant status. Much of the explanation lies in immigrants’ lower SES levels—family income, education, assets, and working in industries less likely to offer health benefits. These SES markers and place of employment do a better job explaining chronic than current insurance, most likely because of the transient nature of the latter. Consequently, our model leaves unexplained a small component of the lack of current health insurance. These SES measures and place of employment help explain a sizable part of the chronic (forty-four percentage points) and current (thirty-five percentage points) disparity among undocumented immigrants as well, but unexplained disparities remain for both.

About 40 percent of the unexplained discrepancy for the undocumented is attributable to private insurance and the rest to public insurance. The unexplained disparities in public insurance rates are especially important for the undocumented. Whether real barriers to access, in the form of eligibility restrictions based on years of residency or perceived barriers by the immigrants themselves, exist is an area for more research.

A critical related issue not adequately addressed in prior research is whether immigrants have more transient insurance, and if so why. Conditional on having health insurance at the time of the survey, only 8 percent of the native-born did not have it at some time during the prior two years. The comparable figure for the foreign-born is 16 percent, and most of that discrepancy is accounted for by the undocumented, for whom the probability of losing insurance is 38 percent. We found that most of higher transience of health insurance among the undocumented is due to the far more transient nature of their lives in other dimensions. Undocumented immigrants change residences and jobs more frequently than others, and these patterns affect the duration of insurance coverage.

The lack of health insurance for the undocumented population is an important national issue as well. Based on the 2000 Current Population Survey (CPS), the foreign-born represent one-quarter of all uninsured Americans ages 18–64—almost double their representation in the population. Applying the same rates of uninsurance to the national undocumented population that we found in our Los Angeles study implies that undocumented immigrants nationally would represent about half of all foreign-born immigrants without health insurance.¹³ Similarly, the enormous growth in the numbers of undocumented migrants during the past few decades means that undocumented immigrants have played a major role in the growth of the uninsured population.¹⁴ Between 1980 and 2000, undocumented immigrants alone accounted for about one-third of the 8.7 million increase in the number of uninsured Americans ages 18–64. Resolving the public policy issues surrounding the large and rising numbers of uninsured Americans cannot take place without dealing in a more factual manner with the large role played by undocumented migrants in this growth.

It is well known that the foreign-born are less likely to have health insurance. What is less well known is to what degree the pooling of the foreign-born masks heterogeneity by legal status. We found that socioeconomic factors and place of employment fully explain much of the difference in coverage rates between the foreign-born and natives in Los Angeles County, with the notable exception of the undocumented population. The undocumented have lower rates of coverage even after a wide array of socioeconomic factors are controlled for. More than half of the unexplained difference in insurance rates is explained by their lack of access to publicly provided insurance.

We also find that socioeconomic factors and employment do a better job explaining long-term than current insurance. It is education, income, and place of employment that matter, not one’s place of birth. Only for the undocumented do we see large, unexplained disparities using a less transient measure. We conclude that the issue of "immigrant uninsurance" is primarily relevant for the undocumented in Los Angeles County; otherwise, the issues for covering immigrants are no different than those for the native-born.

Editor's Notes

 
Dana Goldman (dgoldman{at}rand.org) is corporate chair and director of health economics at RAND in Santa Monica, California, and a research associate atthe National Bureau of EconomicResearch (NBER). James Smith is corporate chair and a senior economistatRAND. Neeraj Sood is an associate economistatRANDand the NBER.

This work was supported by a grant from the Robert Wood Johnson Foundation through its support of the Economic Research Initiative on the Uninsured (ERIU) at the University of Michigan.

NOTES

Top Study Data And Methods Study Results Discussion NOTES

 

1. J.P. Smith and B. Edmonston, The New Americans: Economic, Demographic, and Fiscal Effects of Immigration (Washington: National Academies Press, 1997).
2. J.P. Smith, "Immigrants and the Labor Market," Journal of Labor Economics (forthcoming).
3. O. Carrasquillo, A.I. Carrasquillo, and S. Shea, "Health Insurance Coverage of Immigrants Living in the United States: Differences by Citizenship Status and Country of Origin," American Journal of Public Health 90, no. 6 (2000): 917–923.[Abstract/Free Full Text]
4. Institute of Medicine, Coverage Matters: Insurance and Health Care (Washington: National Academies Press, 2001); and L. Ku et al., Left Out: Immigrants’ Access to Health Care and Insurance (Washington: Urban Institute, 2001).
5. N. Sastry et al., "The Design of a Multilevel Longitudinal Survey of Children, Families, and Communities: The Los Angeles Family and Neighborhood Survey," Working Paper no. 00-18, DRU-2400/1-1-LAFANS (Santa Monica, Calif.: RAND, June 2003).
6. Gerald Kominski, University of California, Los Angeles, personal communication, 22 January 2005.
7. A. Kapteyn, J. Smith, and A. van Soest, "Self-Reported Work Disability in the U.S. and the Netherlands," Pub. no. WR-206 (Santa Monica, Calif.: RAND, 2004).
8. Details are explained in an online technical appendix, available at content.healthaffairs.org/cgi/content/full/24/6/1640/DC1.
9. There are 5.9 million residents of Los Angeles County ages 18–64.
10. By law, employers must retain copies of Social Security cards or federally issued "green cards," or other approved documents proving someone is legally entitled to work in the United States. The law also mandates that companies ensure that the documents presented appear to be genuine and to relate to the individual.
11. Model estimates and standard errors are available in the online technical appendix; see Note 8.
12. Full results are available in the online technical appendix; see Note 8.
13. Only one-fifth of the uninsured foreign-born are naturalized citizens, and national estimates of the numbers of undocumented immigrants imply that 38 percent of foreign-born noncitizens are undocumented.
14. R. Warren and J.S. Passel, "A Count of the Uncountable: Estimates of Undocumented Aliens Counted in the 1980 United States Census," Demography 24, no. 3 (1987): 375–393.[ISI][Medline]

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