Obamacare and Nonimmigrants
December 07, 2009, 05:17 PM
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Very little has been said about whether H-1B visa holders will qualify for national healthcare if Obamacare is passed (read CRS study: "Treatment of Noncitizens in H.R. 3200"). It's important to understand the nuances of this issue because the bills being proposed by the House and Senate could lead to unintended consequences as they are applied to H-1B/L-1 and other nonimmigrant visas.

The primary question is this: Will nonimmigrant guest workers be eligible to receive our nationalized health care after reform? Both the House health care bill (H.R. 3200) and the Senate version (H.R. 3590) are considered.

To get right to the point, H-1Bs and most other nonimmigrant guest workers (H-2B, L-1, O, B-1, etc.) will be able to get the same national health care as U.S. citizens. They will participate in our system whether they like it or not because it will be mandated that they do so. In the rest of this study, and for the sake of brevity, the term "nonimmigrant" refers to the alphabet soup of guest worker visas.

Listed below are the most important points concerning this issue:

  • Nonimmigrants will be required to have health care insurance, just as citizens.
  • Nonimmigrants will be eligible for premium credits, which means that if they choose to purchase private health insurance they will be able to get subsidies to purchase their own insurance.
  • Nonimmigrants will be eligible for the "Health Insurance Exchange" depending on their income. The exchange is a pool of insurance companies that would offer public plans.
  • Nonimmigrants can get the public option if they are eligible for the exchange.
  • It is not clear how the transfer of insurance and taxation will be implemented between countries that have their own national insurance plans.
So, there is no difference in the coverage between nonimmigrants and U.S. citizens. The rest of this study discusses each of the main points in more detail. You don't need to read further unless you are interested in the nuts and bolts of nonimmigrants and the healthcare bill.

Unless otherwise noted the following analysis is about HR 3200, "To provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes." The verbiage in the Senate bill (HR 3590) is slightly different than the House bill but both of them amount to the same thing — nonimmigrants are legal residents that will be required to participate in our system and they will pay for the privilege.

Mandated Health Care Insurance and Eligibility

SEC. 324. ADDITIONAL RULES RELATING TO HEALTH COVERAGE PARTICIPATION REQUIREMENTS.

��(2) NONRESIDENT ALIENS.—Subsection (a) shall not apply to any individual who is a non resident alien.

Subsection A is the part of the bill that says everyone must pay taxes on health care because being insured is mandatory. The only exemption is for people who are non-resident aliens. Almost all nonimmigrants (such as H-1B) must participate in the plan because they are resident aliens.

The terms "resident alien" and "non-resident alien" may seem unfamiliar because they are defined in our tax code instead of immigration laws. Most nonimmigrant guest workers such as H-1B are classified as "resident aliens". There may be a few exceptions for aliens who don't stay in the U.S. very long — B-1 and L-1 for example who sometimes stay for days or a few weeks. Legal permanent residents, such as green card EB visa holders, and nonimmigrants qualify as resident aliens because they meet the substantial presence test, which is just another way to say that they are in the U.S. for a minimum of about 183 days a year (See Cornell's USC 1101 definitions).

In the Senate bill ( HR 3590), many paragraphs similar to this one appear repeatedly on many pages throughout the bill:

(3) ACCESS LIMITED TO LAWFUL RESIDENTS.— If an individual is not, or is not reasonably expected to be for the entire period for which enrollment is sought, a citizen or national of the United States or an alien lawfully present in the United States, the individual shall not be treated as a qualified indi- vidual and may not be covered under a qualified health plan in the individual market that is offered through an Exchange.
The Senate proposal is a makeshift effort that was put into a shell of a totally different bill. Apparently they were in such a hurry they didn't want to make a new bill so instead they merely used another one as a template to cut and paste new text. It even uses the original title that wasn't removed: "H.R. 3590: Service Members Home Ownership Tax Act of 2009". My theory about why the verbiage above appears so often is that whoever wrote the latter parts of the bill never read the earlier parts. This mess of a bill is appears to be glommed together in a very haphazard way.

Premium credits

H.R. 3200 defines who doesn't get insurance credits.

SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL. (a) Definition-CommentsClose CommentsPermalink (1) IN GENERAL- For purposes of this division, the term â€?affordable credit eligible individual’ means, subject to subsection (b), an individual who is lawfully present in a State in the United States (other than as a nonimmigrant described in a subparagraph (excluding subparagraphs (K), (T), (U), and (V)) of section 101(a)(15) of the Immigration and Nationality Act)—
The most important thing about Section 242 to consider is which nonimmigrants are not qualified to get credits for private insurance and which ones are qualified. H-1B is defined in section H of the INA 101, which is not on their exclude list. Sorry about the double negative but Congressional lawmakers just love that kind of confusing Boolean logic. So, H-1B visa holders are not not-qualified which means that they are qualified.

Actually, those exclusions don't include guest worker visas so choose your alphabet soup of visas like H-2B, B-1, L-1, O, R, OPT, or whatever — they all qualify for insurance credits. So, H-1Bs can get affordable credits, which means if they decide to use private health insurance over the public option they can get federal subsidies to make it easier to afford.

Most H-1B, L-1, and O visa holders will qualify for premium credits, and so will most American citizens that work in the professions of Science, Technology, Engineering, and Math (STEM). This will be their only choice if they have an income that is over 400% of the federal poverty level, which would be slightly over $88,000 for a family of four.

Health Insurance Exchange and public option

To be eligible for the exchange, individuals must have family income within 400% of the federal poverty level. Most nonimmigrants are on the lower end of the pay scales so they would qualify for this category.

There are no restrictions on non-citizens from participating in the exchange. Anyone who can get into the exchange can also choose the public option. You can read all of the eligibility stuff in the bill but get ready for a major headache.

SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS. (a) ACCESS TO COVERAGE.—In accordance with this section, all individuals are eligible to obtain coverage through enrollment in an Exchange-participating health benefits plan offered through the Health Insurance Exchange unless such individuals are enrolled in another qualified health benefits plan or other acceptable coverage.
Unintended Consequences

It is very important to understand that many aspects of the health care legislation could change by bureaucratic fiat. What we get now might not be what we get later, as Dr. Gene Nelson explains to the Washington Examiner using the Senate bill as an example" "It is very clear that the language of the Senate bill includes abundant loopholes, granting tremendous authority to the HHS Secretary.�

the Secretary may modify the methods used under the program established by this section for the Exchange and verification of information if the Secretary determines such modifications would reduce the administrative costs and burdens on the applicant….. (page 277)
Presently most nonimmigrants are required to either buy health insurance or to enroll in employer provided plans so not much will really change with Obamacare except how much they pay and where they get insurance. Mandating health care benefits to aliens who don't have nationalized health care in their home country, or to those who have dysfunctional health care systems, could be a huge magnet to attract them to work in the United States. In order to get health care many foreign nationals may accept far lower than fair salary levels so that their families can get higher quality health care than what they could get in their home countries. That could give them one more reason to undercut American workers. Giving nationalized health care to nonimmigrants could spawn a type of reverse medical tourism in which 3rd world foreigners move here to get a job with the intention of enjoying generous health care benefits.

In contrast, nonimmigrant aliens from countries that have superior medical care benefits (Europe or Canada for example) may consider mandated participation as a powerful disincentive to come to the U.S. They could get hit with a type of double taxation because they will have to pay into the U.S. system while also paying into their own systems — or they may even lose benefits in their home country if they don't pay required minimum taxes. The only way to avoid that from happening would be to devise complex international agreements similar to social security totalization. Perhaps something similar to totalization is somewhere in those humongous bills but I couldn't find it. If you know where it is please contact me. (Hint: I haven't read all of the 1000+ page House bill or the 2000+ page Senate bill)