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Estimated Impacts of the Proposed Public Charge Rule on Immigrants and Medicaid

Introduction

On October 10, 2018, the Trump administration released a proposed rule to change “public charge” policies that govern how the use of public benefits may affect individuals’ ability to enter the U.S. or adjust to legal permanent resident (LPR) status (i.e., obtain a “green card”). A previously published fact sheet  describes key provisions of the proposed rule. Based on Kaiser Family Foundation analysis of 2014 Survey of Income and Program Participation (SIPP) data, this analysis provides new estimates of the:

  • Share of noncitizens who originally entered the U.S. without LPR status who have characteristics that DHS could potentially weigh negatively in a public charge determination, and
  • Number of individuals who could disenroll from Medicaid under different scenarios in response to the proposed rule.

Background

The proposed rule would broaden the programs that the federal government would consider in public charge determinations to include previously excluded health, nutrition, and housing programs. Under longstanding policy, if authorities determine that an individual is likely to become a public charge, they may deny that person’s application for LPR status or entry into the U.S.1 The proposed rule would define a public charge as an “alien who receives one or more public benefits” and would define public benefits to include cash assistance for income maintenance, government-funded institutionalized long-term care, and certain health, nutrition, and housing programs that were previously excluded from public charge determinations. These programs would include non-emergency Medicaid, the Medicare Part D Low-Income Subsidy Program, the Supplemental Nutrition Assistance Program (SNAP), and several housing support programs.

Officials consider the totality of a person’s circumstances in a public charge determination. At a minimum, officials must take into account an individual’s age; health; family status; assets, resources, and financial status; and education and skills. In the proposed rule and its preamble, DHS describes how it would consider each factor and identifies characteristics it would deem as positive factors that would reduce the likelihood of an individual becoming a public charge and negative factors that would increase the likelihood of becoming a public charge. The proposed rule would establish a new income standard of 125% of the federal poverty level (FPL) ($25,975 for a family of three as of 2018) for considering an individual’s assets, resources, and financial status and would consider family income below that standard to be a negative factor.2 The proposed rule also identifies certain heavily weighted negative or positive factors. One of these heavily weighted negative factors is current enrollment in or approval for enrollment in a public benefit or enrollment in a public benefit within the previous 36 months. In general, DHS would find an individual “inadmissible” and deny him or her adjustment to LPR status or entry into the U.S. if the person’s negative factors outweigh his or her positive factors.

The proposed rule would directly affect noncitizens seeking to obtain LPR status.3 DHS data show that 1.1 million individuals obtained LPR status in 2017, including about 550,000 living within the U.S. who adjusted to LPR status and about 580,000 who entered the U.S. as a new arrival. 4 About 380,000 of the 550,000 individuals who adjusted to LPR status within the U.S. did so through a pathway that would likely be subject to a public charge determination.5 Some groups, including refugees and asylees, are exempt from public charge determinations.

The proposed rule would likely lead to disenrollment from Medicaid and other programs among noncitizens who intend to seek LPR status as well as among a broader group of individuals in immigrant families, including their primarily U.S.-born children. Noncitizens without LPR status would likely disenroll from Medicaid and other programs because enrollment could negatively affect their chances of obtaining LPR status under the proposed rule. In addition, previous experience and recent research suggest that the proposed rule would have a “chilling effect” that would likely lead to disenrollment among a broader group of individuals in immigrant families even though the proposed rule would not directly affect them.6 This research suggests that individuals may forgo enrollment in or disenroll themselves and their children from public programs because they do not understand the rule’s details and would fear their or their children’s enrollment could negatively affect their or their family members’ immigration status. DHS recognizes evidence of a chilling effect and notes that previous studies examining the effect of welfare reform changes in 1996 showed enrollment reductions ranging from 21% to 54% from public programs due to this chilling effect.7 However, in its estimates of program participation changes due to the proposed rule, DHS assumes only individuals directly affected by the rule (i.e., those applying to adjust status) drop coverage. It does not assume disenrollment among their family members or other noncitizen families, noting uncertainty related to estimating prospective disenrollment and that the proposed rule changes enrollment incentives versus eligibility policy.

Key Findings

Characteristics of Noncitizens without LPR status

Using 2014 SIPP data, we show characteristics of noncitizens who originally entered the U.S. without LPR status that DHS could potentially consider in a public charge determination under the proposed rule. These estimates illustrate the share of noncitizens living in the U.S. who might face barriers to adjusting to LPR status under the proposed rule based on certain characteristics. Due to data limitations, they do not provide a precise count of the number of people within the U.S. who would be subject to public charge determinations. The estimates do not account for people who DHS could deny entry into the U.S. due to a public charge determination and do not account for all factors that DHS could consider in a public charge determination. As noted, officials would take into account the totality of an individual’s circumstances, and no single factor would govern a determination. How DHS would operationalize its assessment of factors may differ from SIPP’s measurement of characteristics. (See Appendix A: Methods for more detail.)

Noncitizens who entered the U.S. without LPR status include individuals across different ages, races/ethnicities, and family statuses. Although many were nonelderly Hispanic adults without a dependent child, 7% are a child, one in four is a parent (25%), and one-third (33%) is another race or ethnicity, including nearly one in five (19%) who is Asian (Figure 1).8

Figure 1: Demographics of Noncitizens who Originally Entered the U.S. without LPR Status, 2014

Nearly all (94%) noncitizens who entered the U.S. without LPR status have at least one characteristic that DHS could potentially weigh negatively in a public charge determination under the proposed rule. The most common characteristics that DHS could consider negative factors are a household size of three or more (78%), no private health coverage (59%), and no high school diploma (40%) (Figure 2 and Appendix B). In addition, over one-third (34%) have income below the 125% FPL9 standard the proposed rule would establish. Just over one in four (26%) are enrolled in a public program that the rule identifies as a public benefit. This data may overestimate the share who are using a public program because the proposed rule would establish minimum thresholds for use of public benefits to be considered a negative factor that are not reflected in these measures. Moreover, some reported use of public benefits in the survey data may not be considered a public benefit under the proposed rule. For example, some individuals reporting Medicaid may be relying on emergency Medicaid, which would not be considered a public benefit under the proposed rule.

Figure 2: Characteristics of Noncitizens who Originally Entered the U.S. without LPR Status, 2014

Over four in ten (42%) noncitizens who originally entered the U.S. without LPR status have characteristics that DHS could consider a heavily weighted negative factor. Potential heavily weighted negative factors examined in this analysis include current enrollment in a public benefit (26%), not being employed and not a full-time student (and aged 18 or older) (27%), and having a disability that limits the ability to work and lacking private health coverage (3%). The proposed rule identifies other heavily weighted negative factors that were not included in this analysis, including receipt of a public benefit within the previous 36 months and being found previously inadmissible or deportable on public charge grounds. Those with characteristics that DHS could potentially consider a heavily weighted negative factor are significantly more likely to be a parent (65% vs. 34%) and to be a woman (59% vs. 27%) compared to those without characteristics that DHS could consider a heavily weighted negative factor (data not shown).

Nearly nine in ten (89%) of all citizens (U.S. born and naturalized) also had one or more characteristics that DHS could potentially weigh negatively if they were subject to a public charge determination. Citizens were more likely than noncitizens who entered the U.S. without LPR status to have certain characteristics that DHS could consider negative, including being a child or older than age 61 and reporting fair or poor health and having a physical or mental disability that limits their ability to work (Appendix B).

Impact on Medicaid Enrollment

We used SIPP data to illustrate the number of Medicaid and CHIP enrollees living in a family with at least one noncitizen who would disenroll under different potential disenrollment scenarios. As noted, previous experience and recent research suggests that the proposed rule may lead to broader disenrollment among individuals in families with immigrants beyond those the rule directly affects. We applied disenrollment rates of 15%, 25%, and 35%. Although it is difficult to predict the effect of the policy change, these disenrollment rates illustrate a range of potential impacts and draw on previous research on the chilling effect welfare reform had on enrollment in health coverage among immigrant families and are consistent with earlier analysis of potential disenrollment among citizen children from Medicaid/CHIP.10

According to the SIPP data, there were over 14 million Medicaid/CHIP enrollees living in a household with at least one noncitizen, and half of these enrollees were citizen children. Although CHIP was not included as a public benefit in the proposed rule, DHS requested comment on its inclusion. Moreover, many individuals are not able to distinguish between their enrollment in Medicaid versus CHIP, and SIPP data do not provide separate Medicaid and CHIP coverage measures.

This analysis finds that, if the proposed rule leads to Medicaid disenrollment rates ranging from 15% to 35%, between 2.1 million and 4.9 million Medicaid/CHIP enrollees living in a family with at least one noncitizen would disenroll (Figure 3). These estimates reflect disenrollment among noncitizens without LPR status who would be directly affected by the rule11 as well as disenrollment due to chilling effects among enrollees in immigrant families, including their primarily citizen children. The estimates provide illustrative examples and, due to data limitations, may reflect both an undercount of noncitizens and an overestimate of noncitizens receiving Medicaid. (See Methods for more detail.)

Figure 3: Declines in Medicaid/CHIP Enrollment among Individuals in a Household with a Noncitizen Under Different Disenrollment Scenarios

These estimates of Medicaid disenrollment vary from DHS estimates because they take into account potential chilling effects among immigrant families and rely on different a different data source and methods. Using administrative and survey data, DHS estimated that about 142,000 individuals would disenroll from Medicaid per year and that this would lead to a $1.1 billion annual decrease in federal Medicaid expenditures. (See Appendix C for more detail on their approach.) Although DHS recognizes previous research showing that chilling effects led to enrollment reductions, it does not account for a chilling effect in its estimates. Instead, DHS assumes that all individuals directly affected by the public charge rule (i.e., those applying to adjust status) drop coverage but no disenrollment effects among their family members or among other noncitizen families.

Implications

Under the proposed rule, individuals with lower incomes, a health condition, less education, and/or who are enrolled or likely to enroll in certain health, nutrition, and housing programs would face increased barriers to obtaining LPR status. As such, the rule would have implications for future immigration opportunities for individuals and families, making it more difficult for low-income individuals and those with health conditions to obtain a green card. For example, a full-time worker in a family of three earning the minimum wage would not have sufficient annual income ($15,080) to meet the new income standard established in the rule, which would be $25,975 for a family of three. The increased barriers to obtaining a green card would disproportionately limit future opportunities for low-income families and individuals with health needs. It also could increase barriers to family reunification and potentially lead to family separation, for example, if DHS denies an individual a green card due to a public charge determination and that individual loses permission to remain in the U.S.

Reduced participation in Medicaid and other programs would negatively affect the health and financial stability of immigrant families and the growth and healthy development of their children, who are predominantly U.S.-born. Coverage losses would reduce access to care for families, contributing to worse health outcomes. Reduced participation in nutrition and other programs would likely compound these effects. In addition, the losses in coverage would lead to lost revenues and increased uncompensated care for providers and have broader spillover effects within communities. In the preamble to the proposed rule, DHS recognizes that disenrollment or foregone enrollment in public benefit programs could lead to worse health outcomes, especially for pregnant or breastfeeding women, infants, or children; reduced prescription adherence; increased emergency room use and emergent care due to delayed treatment; increased prevalence of diseases; increased uncompensated care; increased rates of poverty and housing instability; and reduced productivity and educational attainment.12 Moreover, DHS indicates that the rule may decrease disposable income and increase poverty of certain families and children, including U.S. citizen children.13 DHS also identifies potential impacts on communities, including decreased revenues to health care providers, pharmacies, grocery retailers, agricultural producers and landlords, as well as new direct and indirect costs for individuals and organizations serving immigrant families.14

This brief was prepared by Samantha Artiga and Rachel Garfield, with the Kaiser Family Foundation, and Anthony Damico, an independent consultant to the Kaiser Family Foundation.

Executive Summary Appendices