David Frum

05.29.13

The House Still Isn't Dealing With Immigration's Obamacare Problem

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POLITICO's David Nather reports that Republicans on the House Gang of Eight are pushing for a rule forcing provisional immigrants to purchase healthcare - while remaining ineligible for the subsidized exchanges offered by the Affordable Care Act.

Republicans in the group want these immigrants to pay for their own medical bills — and they also want to make sure Obamacare doesn’t expand as part of immigration reform. Under the health care law, illegal immigrants are not entitled to purchase plans in the exchanges and they aren’t eligible for subsidies.

“We want them to have health care, not Obamacare,” Rep. Sam Johnson (R-Texas), another member of the group, said in a brief interview on his way in to the group’s negotiating session last week.

Jed Graham of Investor's Business Daily, who first reported on the problems caused by the Affordable Care Act meeting the immigration reform, explains it in clear English:

[M]any employers deciding whether to employ a legalized immigrant or citizen full-time would have a big incentive to favor the immigrant. Because the annual fine of up to $3,000 is nondeductible, it is equivalent to as much as $5,000 in wages for companies paying a combined 40% federal and state tax rate.

As Graham notes, mandating provisional workers purchase insurance helps mitigate the public cost of their healthcare, but not the advantage being barred from the ACA gives provisional workers against their native counterparts. So Graham proposes a third option:

A more plausible path would be to reduce all ObamaCare employer fines by one-third and to levy the same fine for legalized immigrants without qualifying coverage.

Getting that would be a huge validation of the Affordable Care Act for liberals, a major step to protect native workers, and a solid way for conservatives to push to a catastrophic coverage based model instead of the ACA status quo.

Because of that, it probably won't happen. After all, those affected the most - low and moderately skilled workers, are the ones with the least political power in this fight. Pity.