EBRI Notes

'The Impact of Immigration on Health Insurance Coverage in the United States, 1994–2006' and 'Saving for Health Care Expenses in Retirement: The Use of Health Savings Accounts'

Aug 5, 2008 16  pages


The Impact of Immigration on Health Insurance Coverage in the United States, 1994–2006

Research on immigration and the uninsured: Research is mixed on how immigration has contributed to the increase in the uninsured population: One study concluded that immigrants who arrived between 1994–1998 accounted for the majority of the growth in the uninsured population, but a similar study concluded that they are not a significant reason for the growth of the uninsured.

Federal law contributes to uninsured immigrants: The relative lack of employment-based health coverage for immigrants is compounded by the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, which imposed a five-year ban on receipt of health and other public programs by most newly arrived legal immigrants.

Statistics on uninsured immigrants: More than 12 million immigrants in the United States were uninsured in 2006, accounting for almost 27 percent of all uninsured individuals in the country. Immigrants accounted for 43 percent of the increase in the uninsured between 1994–1998, but 92 percent of the growth between 1998–2003, presumably because of PRWORA restrictions. Over the entire 1994–2006 period, immigrants accounted for 55 percent of the increase in the uninsured. The ranks of the uninsured are likely to grow as immigration continues to increase.

Saving for Health Care in Retirement: The Use of Health Savings Accounts

Use of HSAs: Health savings accounts (HSAs) are tax-favored individual accounts that can be used to cover health insurance premiums and out-of-pocket expenses for health care services, and a possible vehicle for funding future retiree health care costs.

HSA potential is limited: Statutory contribution limits make it unlikely that these accounts will play more than a minor part in savings for health care costs in retirement. The maximum savings that can be accumulated in an HSA will be far from sufficient to fully cover the savings needed in retirement for insurance premiums and out-of-pocket expenses, especially since individuals can (and may need to) use HSA assets to pay for health care services during their working years or to pay COBRA premiums and insurance premiums during periods of unemployment.