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One Way To Fix Obamacare Exchanges: Sign Up Undocumented Immigrants?

Jennifer Morrow/Creative Commons

If 25-year-old Alexis Meza could get health insurance through an exchange, she’d be one more young, healthy person making the Affordable Care Act viable.

At least that’s the theory some experts are working with now.

Meza, who lives in Lexington, is one of 24 million people in the U.S. who don't have health insurance. That figure comes from a new report from the Commonwealth Fund, a private nonpartisan foundation. Forty percent of the uninsured are, like Meza, Latino. And millions of those are, also like Meza, not eligible for the insurance exchanges or Medicaid.

Amid growing signs that state-based exchanges created under the ACA are struggling, some health policy analysts say getting more Latinos -- both those who are citizens and those without documentation -- onto insurance plans through the exchanges would strengthen the system.

For Latinos who were born in the U.S., the uninsured rate has gone from 24 to 14 percent between 2013 and 2016. But nearly half of foreign-born Latinos here remain uninsured, according to the Census Bureau. People who aren't in the U.S. legally aren't allowed to enroll in Medicaid or buy insurance through exchanges.

Meza has a two-year work permit through the Deferred Action for Childhood Arrivals federal program, so she's in the country legally. The Obama administration policy allows undocumented immigrants who came to the U.S. as children to get a work permit and deferred deportation for two years.

Meza came to the U.S. with her family in 1999, when she was 9 years old. She is now a temporary resident and has to renew her permit every two years.

But she still can't get insurance through Kynect.

“Obamacare was great and it’s something that would help a lot of people, but we’re counted out of it because we’re not legally allowed to be here,” she said. “We’re not residents, we’re not citizens. When it comes down to health care and sickness, it’s very hard.”

System Troubles

Just last week, Aetna announced it is withdrawing from most of the state exchanges it had been in, including Kentucky’s. United Healthcare, the nation’s largest health insurer, made a similar decision earlier this year. And Louisville-based Humana has said it would be leaving some state exchanges, though specifics haven’t been announced.

The reason?

They say they’re losing too much money on sick people – because there aren’t enough young, healthy people to pay premiums and make up the difference. Insurers selling on exchanges also are getting shortchanged by an ACA program designed to keep insurers from gaining or losing too much money on exchange plans in the first three years.

The idea is to redistribute funds from insurers that made over a certain amount to those that lost. Insurers that made too much money paid $362 million in 2014, but others lost and requested $2.87 billion.

The federal government, however, doesn’t have all the money to pay out. Blue Cross and Blue Shield of North Carolina sued the feds last month, saying it's owed $129 million in unpaid losses for 2014 alone.

So, why Latinos?

For one, they're part of a coveted demographic: Latinos make up nearly half of young adults in the U.S. who are still uninsured.

And making undocumented immigrants eligible would boost the overall number of enrollees; it's a kind of rising-tide argument, according to one analyst.

“Increasing the numbers of immigrants who are eligible for enrolling, either through broad immigration reform or loosening restrictions that exclude undocumented from both Medicaid or buying a plan in a marketplace, would increase enrollment,” said Sara Collins, vice president for the health care coverage program at the Commonwealth Fund. “And greater enrollment smooths out the risk across a broadest population.”

Excluding Undocumented Immigrants

There were two main reasons lawmakers didn’t allow undocumented immigrants to buy insurance on the exchanges: political and fiscal.

The nonpartisan Congressional Research Service estimated in 2013 that 80 percent of non-citizens — 17.5 million people — would, due to their income level, qualify for some part of the insurance expansion. Multiply that by even the most modest federal subsidy and you get hundreds of millions in new spending.

There’s also the political opposition, which has been strongest among Congressional Republicans, who pushed against allowing undocumented immigrants access to federal health insurance subsidies and are unlikely to allow such a change in the law.

Ira Mehlman is the media director for the Federation of American Immigration Reform, a group that advocates to limit immigration. He said people like Meza shouldn’t have access to exchanges or Medicaid because that’s one more step toward normalizing the status of people who came to the U.S. illegally.

“Precisely because they tend to be younger, and tend to use less health care, it would be more cost-effective to pay for the services they use, rather than subsidize health care coverage,” Mehlman said.

Undocumented immigrants have options for health insurance beyond Kynect and other state-based exchanges. They can sign up for an employer-sponsored health plan. In Kentucky, however, only 34.7 percent of employers with fewer than 50 employees offered health coverage in 2013, according to the Kaiser Family Foundation. The lion's share of Latinos in the U.S. are employed by small businesses.

They can also buy insurance on off-exchange plans, but those don’t come with subsidies that lower monthly premiums.

Collins said loosening restrictions on undocumented immigrants’ ability to get health insurance would benefit not only families but the health care system overall.

“It would allow people to get coverage before they get really sick and [would] prevent longer-term high costs for health systems,” Collins said.

For Meza, who graduated from Kentucky State University last year, it would also provide a safety net. She’s been looking for a full-time job while working part-time gigs, where she can't get insurance.

WFPL News is partnering with Al Dia en America to provide Spanish-language versions of stories. To read this story in Spanish, click here

Lisa Gillespie is WFPL's Health and Innovation Reporter.

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