President Biden's executive order allowing certain undocumented immigrants to receive temporary legal status and work permits will expand Affordable Care Act subsidies for health insurance, potentially costing taxpayers up to $4 billion per year.
President Joe Biden just announced his latest executive action to gain votes. He plans to allow certain undocumented immigrants who have been in the U.S. for at least 10 years and married to a U.S. citizen to receive temporary legal status, which will permit them to legally work. While there are economic benefits to allowing them to work legally, there are also costs. And one of those costs will be the expansion of Affordable Care Act (ObamaCare) subsidies for health insurance.
The White House explains: “Those who are approved after DHS’s [Department of Homeland Security] case-by-case assessment of their application will be afforded a three-year period to apply for permanent residency. They will be allowed to remain with their families in the United States and be eligible for work authorization for up to three years.”
The White House says this action will affect some 500,000 undocumented spouses of U.S. citizens and some 50,000 noncitizen children of the undocumented spouses.
Once legal, they will be eligible for certain benefits, including ObamaCare.
In general, illegal immigrants are not eligible for ObamaCare and its taxpayer-provided subsidies. However, “lawfully present noncitizens” and green-card holders are eligible (as are certain other classes of noncitizens).
It is likely that the large majority of these families are in the middle- or lower-income brackets, so they will qualify for taxpayer-subsidized coverage. Under ObamaCare, households with annual income between 100 percent and 400 percent of the federal poverty level may qualify for a subsidy. For a family of two today, that’s income between $20,440 and $81,760. For a family or four, it’s between $31,200 and (amazingly) $124,800. Given that the median household income in the U.S. is about $75,000, you can see why the large majority of those affected by Biden’s executive order will qualify for a full or partial subsidy.
According to the Kaiser Family Foundation, in 2023 the government spent $90.4 billion on ObamaCare tax credits for 14.3 million enrollees, with the average monthly tax credit being $527 — or $6,324 per year. Thus, the upper limit of the annual cost of Biden’s scheme is about $3.5 billion (multiplying 550,000 by the annual average tax credit cost).
But wait! On May 3, Biden announced that about 100,000 immigrants who were brought to the U.S. as children — i.e., those in the Deferred Action for Childhood Arrivals, or “Dreamers” — will now be eligible to join ObamaCare and receive the subsidies. That’s an additional upper-limit expense of about $632.4 million.
Call it a little more than $4 billion per year for the two executive orders combined.
But that’s the upper limit. It likely will be less. Some noncitizen spouses will have health coverage through their citizen spouses’ employer. Others may decline coverage if they don’t want, or can’t afford, to pay their share of the premium. And others, especially young healthy immigrants, just may not see the need for health insurance.
But some of the newly eligible noncitizens may choose to go with family coverage if the citizen-spouse doesn’t have it.
We can only make estimates of how much Biden’s two executive orders will cost taxpayers. There’s just too much we don’t know about the families involved and their preferences.
What we can say is Biden’s plan will make the federal budget deficit even bigger. As the Wall Street Journal points out, “CBO [Congressional Budget Office] projects that this year’s budget deficit will clock in at roughly $2 trillion, some $400 billion more than it forecast in February and $300 billion larger than last year’s deficit.”
That missed forecast is not due to CBO’s bad estimating skills, but can be attributed to Biden’s additional spending.
The Journal adds, “CBO says deficits will stay nearly this high for years, and the total over the next decade is now expected to total $21.9 trillion ….” Incidentally, about $211 billion of that $400 billion increase is Biden’s newest student-loan forgiveness program.
The shame in Biden’s latest immigration ploy is that “Dreamers” and long-time undocumented spouses living in the U.S. are the most sympathetic of those residing in the country illegally. Congress needs to address the problem, but Washington is too broken to do anything about immigration or immigrants.
Moreover, Biden’s decision to do something by executive order — rather than going through the constitutionally-prescribed process of negotiating with Congress and passing a law — will only exacerbate the current disfunction.
Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas. Follow him on X@MerrillMatthews.
