Obamacare and Nonimmigrants

Date: Monday, December 07, 2009 2:03 PM

<<<<< JOB DESTRUCTION NEWSLETTER No. 2055 -- 12/07/2009 >>>>>

blog version:
http://blog.vdare.com/archives/2009/12/07/obamacare-and-nonimmigrants/

Very little has been said about whether H-1B visa holders will qualify for
national healthcare if Obamacare is passed (read CRS study: "Treatment of
Noncitizens in H.R. 3200?). It s important to understand the nuances of this
issue because the bills being proposed by the House and Senate could lead to
unintended consequences as they are applied to H-1B/L-1 and other nonimmigrant
visas.

The primary question is this: Will nonimmigrant guest workers be eligible to
receive our nationalized health care after reform? Both the House health care
bill (H.R. 3200) and the Senate version (H.R. 3590) are considered.

To get right to the point, H-1Bs and most other nonimmigrant guest workers (H-
2B, L-1, O, B-1, etc.) will be able to get the same national health care as
U.S. citizens. They will participate in our system whether they like it or not
because it will be mandated that they do so. In the rest of this study, and
for the sake of brevity, the term "nonimmigrant" refers to the alphabet soup
of guest worker visas.

Listed below are the most important points concerning this issue:

* Nonimmigrants will be required to have health care insurance, just as

citizens.

* Nonimmigrants will be eligible for premium credits, which means that if

they choose to purchase private health insurance they will be able to get
subsidies to purchase their own insurance.

* Nonimmigrants will be eligible for the "Health Insurance Exchange"

depending on their income. The exchange is a pool of insurance companies that
would offer public plans.

* Nonimmigrants can get the public option if they are eligible for the

exchange.

* It is not clear how the transfer of insurance and taxation will be

implemented between countries that have their own national insurance plans.

So, there is no difference in the coverage between nonimmigrants and U.S.
citizens. The rest of this study discusses each of the main points in more
detail. You don t need to read further unless you are interested in the nuts
and bolts of nonimmigrants and the healthcare bill.

Unless otherwise noted the following analysis is about HR 3200, "To provide
affordable, quality health care for all Americans and reduce the growth in
health care spending, and for other purposes." The verbiage in the Senate bill
(HR 3590) is slightly different than the House bill but both of them amount to
the same thing -- nonimmigrants are legal residents that will be required to
participate in our system and they will pay for the privilege.

Mandated Health Care Insurance and Eligibility

SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COVERAGE
PARTICIPATION REQUIREMENTS.
(2) NONRESIDENT ALIENS. -- Subsection (a) shall not
apply to any individual who is a non resident alien.

Subsection A is the part of the bill that says everyone must pay taxes on
health care because being insured is mandatory. The only exemption is for
people who are non-resident aliens. Almost all nonimmigrants (such as H-1B)
must participate in the plan because they are resident aliens.

The terms "resident alien" and "non-resident alien" may seem unfamiliar
because they are defined in our tax code instead of immigration laws. Most
nonimmigrant guest workers such as H-1B are classified as "resident aliens".
There may be a few exceptions for aliens who don t stay in the U.S. very long
-- B-1 and L-1 for example who sometimes stay for days or a few weeks. Legal
permanent residents, such as green card EB visa holders, and nonimmigrants
qualify as resident aliens because they meet the substantial presence test,
which is just another way to say that they are in the U.S. for a minimum of
about 183 days a year (See Cornell s USC
1101 definitions).

In the Senate bill ( HR 3590), many paragraphs similar to this one appear
repeatedly on many pages throughout the bill:

(3) ACCESS LIMITED TO LAWFUL RESIDENTS.--
If an individual is not, or is not reasonably expected to be for
the entire period for which enrollment is sought, a citizen or
national of the United States or an alien lawfully present in
the United States, the individual shall not be treated as a
qualified indi- vidual and may not be covered under a qualified
health plan in the individual market that is offered through an
Exchange.

The Senate proposal is a makeshift effort that was put into a shell of a
totally different bill. Apparently they were in such a hurry they didn t want
to make a new bill so instead they merely used another one as a template to
cut and paste new text. It even uses the original title that wasn t removed:
"H.R. 3590: Service Members Home Ownership Tax Act of 2009?. My theory about
why the verbiage above appears so often is that whoever wrote the latter parts
of the bill never read the earlier parts.
This mess of a bill is appears to be glommed together in a very haphazard way.

Premium credits

H.R. 3200 defines who doesn t get insurance credits.

SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.
(a) Definition-CommentsClose CommentsPermalink (1) IN GENERAL-
For purposes of this division, the term affordable credit
eligible individual means, subject to subsection (b), an
individual who is lawfully present in a State in the United
States (other than as a nonimmigrant described in a
subparagraph (excluding subparagraphs (K), (T), (U), and (V))
of section 101(a)(15) of the Immigration and Nationality Act)

The most important thing about Section 242 to consider is which nonimmigrants
are not qualified to get credits for private insurance and which ones are
qualified. H-1B is defined in section H of the INA 101, which is not on their
exclude list. Sorry about the double negative but Congressional lawmakers just
love that kind of confusing Boolean logic. So, H-1B visa holders are not not-
qualified which means that they are qualified.

Actually, those exclusions don t include guest worker visas so choose your
alphabet soup of visas like H-2B, B-1, L-1, O, R, OPT, or whatever -- they all
qualify for insurance credits. So, H-1Bs can get affordable credits, which
means if they decide to use private health insurance over the public option
they can get federal subsidies to make it easier to afford.

Most H-1B, L-1, and O visa holders will qualify for premium credits, and so
will most American citizens that work in the professions of Science,
Technology, Engineering, and Math (STEM). This will be their only choice if
they have an income that is over 400% of the federal poverty level, which
would be slightly over $88,000 for a family of four.

Health Insurance Exchange and public option

To be eligible for the exchange, individuals must have family income within
400% of the federal poverty level. Most nonimmigrants are on the lower end of
the pay scales so they would qualify for this category.

There are no restrictions on non-citizens from participating in the exchange.
Anyone who can get into the exchange can also choose the public option. You
can read all of the eligibility stuff in the bill but get ready for a major
headache.

SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.
(a) ACCESS TO COVERAGE. -- In accordance with this section, all
individuals are eligible to obtain coverage through
enrollment in an Exchange-participating health benefits plan
offered through the Health Insurance Exchange unless such
individuals are enrolled in another qualified health benefits
plan or other acceptable coverage.

Unintended Consequences

It is very important to understand that many aspects of the health care
legislation could change by bureaucratic fiat. What we get now might not be
what we get later, as Dr. Gene Nelson explains to the Washington Examiner
using the Senate bill as an example" "It is very clear that the language of
the Senate bill includes abundant loopholes, granting tremendous authority to
the HHS Secretary."

the Secretary may modify the methods used under the program
established by this section for the Exchange and verification
of information if the Secretary determines such modifications
would reduce the administrative costs and burdens on the
applicant... (page 277)

Presently most nonimmigrants are required to either buy health insurance or to
enroll in employer provided plans so not much will really change with
Obamacare except how much they pay and where they get insurance. Mandating
health care benefits to aliens who don t have nationalized health care in
their home country, or to those who have dysfunctional health care systems,
could be a huge magnet to attract them to work in the United States. In order
to get health care many foreign nationals may accept far lower than fair
salary levels so that their families can get higher quality health care than
what they could get in their home countries. That could give them one more
reason to undercut American workers. Giving nationalized health care to
nonimmigrants could spawn a type of reverse medical tourism in which 3rd world
foreigners move here to get a job with the intention of enjoying generous
health care benefits.

In contrast, nonimmigrant aliens from countries that have superior medical
care benefits (Europe or Canada for example) may consider mandated
participation as a powerful disincentive to come to the U.S. They could get
hit with a type of double taxation because they will have to pay into the U.S.
system while also paying into their own systems -- or they may even lose
benefits in their home country if they don t pay required minimum taxes. The
only way to avoid that from happening would be to devise complex international
agreements similar to social security totalization. Perhaps something similar
to totalization is somewhere in those humongous bills but I couldn t find it.
If you know where it is please contact me. (Hint: I haven t read all of the
1000+ page House bill or the 2000+ page Senate
bill)

REFERENCES:

http://www.irs.gov/taxtopics/tc851.html
Topic 851 - Resident and Non-Resident Aliens

http://www.cis.org/articles/2009/CRS_Report_on_HR3200.pdf
CRS: Treatment of Noncitizens in H.R. 3200

http://www.govtrack.us/congress/bill.xpd?bill=h111-3200
Complete healthcare bill text for H.R. 3200

http://www.govtrack.us/congress/bill.xpd?bill=h111-3590
H.R. 3590

http://www.law.cornell.edu/uscode/8/usc_sec_08_00001101----000-.html
USC 1101 definitions

http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Health-care-No-illegal-immigrants-need-apply-wink-wink-70522607.html

Health care: No illegal immigrants need apply (wink, wink)
By: Barbara Hollingsworth
Local Opinion Editor
11/19/09 12:57 PM EST

Rep. Joe Wilson, R-SC, was forced to apologize to President Obama for shouting
"You lie!" when the president stated in an address to Congress that illegal
immigrants would not be included in the Democrats health care reform bill.

That s sorta true. According to the recently released 2,074-page Patient
Protection and Affordable Care bill
(http://democrats.senate.gov/reform/patient-protection-affordable-care-act.p
df) "access is limited to lawful residents." (page 160)

But when Gene Nelson of Numbers USA, a group that opposes illegal immigration,
waded through the minutiae of the bill, he discovered that it all depends on
what your meaning of "limited" is. "It is very clear that the language of the
Senate bill includes abundant loopholes, granting tremendous authority to the
HHS Secretary," Nelson says. "There is no secure citizenship verification
mechanism."

In fact, "the Secretary may modify the methods used under the program
established by this section for the Exchange and verification of information
if the Secretary determines such modifications would reduce the administrative
costs and burdens on the applicant," (page 277)

So access is limited to residents who make "an attestation of citizenship,"
but the government won t make sure those claims are true if it s too much
trouble.

Nelson says the bill also contains an exemption for families with anchor
babies (page 252). So access is limited to residents who merely claim they re
here lawfully, which the government won t verify if it s too burdensome, and
they don t even have to do that if they have children born in the U.S.

Furthermore, "The Secretary may take into account the financial burden on
providers with underserved populations (page 1849) defined as "populations
underserved because of special needs (such as language barriers, disabilities,
alien status, or age)." (page 1850)

So access is limited to residents who make unverified claims that they re here
legally, unless they have children or live in areas without enough doctors
because of their alien status or language barriers.

But that s it. No other illegal immigrants need apply.

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