Immigration Reform's Big Impact on Health Care

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Congress has a hot topic on its hands this summer. A proposed immigration reform bill is making its way through the halls of Capitol Hill. While lawmakers argue the pros and cons of the legislation on immigration, the bill also would make a major impact on health care in the U.S.  

More spending
According to the Congressional Budget Office, around 8 million unauthorized residents would gain legal status and 10.4 million additional residents would be added to the U.S. by 2023. The CBO says that federal spending will increase by $262 billion over the next decade due largely to refundable tax credits and higher health care spending.

That higher health care spending goes primarily to two areas: Obamacare and Medicaid (including the Children's Health Insurance Program, or CHIP). Additional spending on Obamacare health insurance exchange subsidies will amount to $82.3 billion through 2023, according to the CBO, with another $5 billion hit from lower revenue. Medicaid and CHIP will require $29.3 billion added spending during the same period with the proposed immigration reform.

Medicare spending would only increase by $0.8 billion, but this highlights a larger issue. The CBO only scores the budgetary impact for the first 10 years. Most unauthorized immigrants wouldn't qualify for Medicare until many years from now -- well beyond the CBO's cost calculation time frame.

The CBO did take a stab at going out further in time, with projected increased health care spending of around $470 billion in the 10-year period ending in 2033. However, according to the Center for Immigration Studies, the average age of unauthorized immigrants was around 42 in 2010. Newly incoming immigrants tend to be much younger, with an average age of less than 30. This means that even estimating through 2033 doesn't give a good picture of the ultimate health care costs for the proposed bill. 

We should note that the CBO expects increased revenue will exceed the higher costs incurred. Through 2023, around $459 billion of higher revenue is expected resulting from additional taxes paid by legalized residents and new immigrants. These higher taxes assume higher employment levels, according to the CBO, "because the larger population would boost demand for goods and services and, in turn, the demand for labor." 

More doctors
One clearly positive impact from the proposed immigration bill would be in enabling more physicians to remain in the U.S. In particular, non-resident physicians who work in areas that have a shortage of health care professionals or at Veterans Administration hospitals will have an easier path to staying in the U.S. with the current immigration reform legislation.

I call this clearly positive because the U.S. faces a physician shortage. The New York Times reported last year that the nation will have nearly 63,000 fewer doctors than needed by 2015, with that number doubling by 2024. A recent research study led by Dr. Candace Chen of George Washington University confirmed that critical physician shortages loom ahead, especially in rural areas. 

Current doctors echo these concerns. A 2013 Deloitte survey found that nearly three-quarters of physicians think that fewer individuals will consider a career in medicine. 62% of respondents said that more physicians will retire early because of changes in the practice of medicine.

More investment ideas?
As always, The Motley Fool looks for an investing angle with any story. How can investors take action based on immigration reform's potential impact on health care?

The best approach would be one that should be successful regardless of whether the bill ultimately becomes law. Focusing on investment alternatives that address the physician shortage issue raised in the immigration reform debate seems to meet that criteria. Even if more physicians from other countries are allowed to stay in the U.S., it won't be enough to fully solve the problem.

With this in mind, telemedicine offers potential to help by enabling physicians to provide care for patients in other geographical areas. Companies that facilitate effective use of telemedicine should do well over the long run.

Cisco (NASDAQ: CSCO  ) looks like one good pick. Technology research firm Technavio touts Cisco as one of the key leaders in telemedicine video conferencing. The firm expects the telemedicine video telecommunications market to grow 18% annually over the next few years. Cisco's Telepresence video conferencing product should rack up big gains if those projections prove true.

Qualcomm (NASDAQ: QCOM  ) is another major player in telemedicine. The company's Qualcomm Life division markets the 2Net platform that supports end-to-end wireless connectivity between medical devices and clinical professionals. Qualcomm Life counts more than 170 organizations in its 2Net ecosystem, including major medical device makers and electronic medical record systems vendors.

Neither stock appears too expensive right now. Cisco has a forward price-to-earnings ratio of less than 12, while Qualcomm's forward multiple stands a little below 13. However, Qualcomm seems to have the better overall growth opportunities, so it could be the better value between the two.

Both stocks also offer decent dividend yields. Cisco's dividend yield stands at 2.8%, while Qualcomm isn't too far behind with a 2.3% yield. 

Congress must deal with immigration reform this summer. In the meantime, investors can buy two stocks that help address one of the areas that immigration reform hopes to tackle. Hot topic, hot stocks -- I say go with the stocks.

While passage of immigration reform remains up in the air, Obamacare is here and just cranking up. Still in the dark about how Obamacare might affect you and your portfolio? Don't worry -- you're not alone. To help prepare investors for the massive changes coming to the American health care system, The Motley Fool created a special free report that makes this complex topic easily understandable. Download "Everything You Need to Know About Obamacare" and discover how the law may impact your taxes, health insurance, and investments. Click here for your free copy today.

Read/Post Comments (24) | Recommend This Article (7)

Comments from our Foolish Readers

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  • Report this Comment On June 22, 2013, at 3:44 PM, Americanmale wrote:

    We are struggling with this Obamacare even before it takes full effect. The young generation is not buying into it, many people are now being hired part time by large companies like Walmart and do will not get insurance, health plans now in effect willnot or maynot fit the requirement. IRS is supposed to man this yet they are involved in a scandal, wasteful spending. Most of all Americans are not in favor as a majority and to make things worse, Obama is trying to get more illegals accepted to this plan and we Americans are going to pay through the nose. We need to get rid of this until everyone knows what it says, and it can be made fair to all that are forced to accept it. Unconstitutional regardless what the Supreme court says. They are human and are sometimes wrong.

  • Report this Comment On June 22, 2013, at 3:59 PM, Hjin wrote:

    But how many physicians are non-residents? If 10 million illegal immigrants granted amnesty are matched with only a handful of physicians retained, our problems would be worse, not get better.

  • Report this Comment On June 22, 2013, at 4:08 PM, DanRD wrote:

    LISTED BELOW are several of the arguments that have been used by misguided people to try and justify illegal immigration. Next to each is the reason why that argument has no merit.

    1) They are an economic necessity - Not true. The idea that a bunch of desperately poor, uneducated, unskilled, non-English speaking foreigners are an economic necessity is ludicrous. In fact, when you compare cost vs. benefit, it is obvious that they are not only NOT a necessity, they are not even an asset. Rather, they are a liability and a huge one at that.

    2) They do work Americans won’t do - Not true. They do work Americans won’t do for $7 an hour (especially if Americans can collect welfare and unemployment instead). Of course, if you got rid of the illegals, the jobs wouldn’t pay $7 an hour. The people who wanted the work done would have to pay a wage that was attractive enough to get Americans to do the work. And it might even be enough to get Americans off the unemployment and welfare dole and back into the taxpaying workforce!

    3) We benefit from all that “cheap” labor - This is nonsense. The only people who benefit from the cheap labor are the unscrupulous people who hire illegal immigrants. Taxpayers are left holding the bag. Ultimately, it is they who must pay to support all the Americans who have been put out of work by illegals and must also provide billions of dollars in services and benefits to the illegals themselves.

    4) They are just trying to make better lives - Aren’t we all? The difference is that most of us understand that we DO NOT have a right to acquire by illegal means those things that we find difficult to acquire by legal means. And we certainly don’t have the right to do it in a foreign country.

    5) It is impossible to round up and deport the illegals - We don’t have to. All we have to do is remove the incentives that brought them here in the first place. No jobs. No housing. No taxpayer financed services or benefits (including education). Once we remove the incentives that brought them here, they will leave on their own.

    6) Immigration control is racist / xenophobic - This is just another play of the race card by people who have no other cards to play. Immigration control is the world-wide status quo. There is nothing racist about it. Furthermore, the USA welcomes LEGAL immigrants of all races and ethnicities from all over the world who have gone through the legal immigration process. This is not just a bad argument, it is an attempt to create racial hatred and division.

    7) We are a nation of immigrants - This is the “BIG LIE”. The vast majority of Americans are native-born. I am not an immigrant. Nor were my parents. Nor were my grandparents. We are a nation that has, historically, allowed and even encouraged LEGAL immigration. And we continue to do so. The issue at hand is illegal immigration, which has nothing to do with legal immigration.

    8) They are people. We must treat them humanely - Yes & yes. But lets not pretend like they are victims who were dragged here kicking and screaming against their will. Nothing could be further from the truth. They came of their own free will and for their own benefit and they broke the law to do it. PEOPLE SHOULD NOT BE REWARDED FOR BREAKING LAWS AND COMMITTING CRIMES. SENDING THEM HOME IS THE RIGHT THING TO DO. There is nothing “draconian” or “mean-spirited” about it.

    9) It is wrong to break up families- Yes. Unfortunately, families are often broken up by criminal activity. If you don’t believe it, just drop by any prison or jail on visiting day. We can’t keep families together if some family members choose to participate in criminal activity.

    10) They work & contribute to our society - So do I. And if I break the law and commit crimes, I can expect to pay a penalty of some kind. Anything from a small fine to the death penalty. I do not receive a reward. WHY SHOULD WE TREAT FOREIGN CRIMINALS BETTER THAN OUR OWN CITIZENS?

  • Report this Comment On June 22, 2013, at 4:33 PM, jeffy57 wrote:

    If you know of someone who is doing something illegal, and you don't do anything about it like report them, aren't you guilty of conspiracy at the very least? Well I believe that is what every single senator and representative is doing by knowingly allowing all these illegals to remain in this country under current law. I also believe that as a representative of this country and government if you are allowing this to happen wouldn't that be treason? I mean they are giving away our sovereignty to these illegals knowingly and willingly. And from what the description of treason says this fits the word.

    The definition of treason


    the offense of acting to overthrow one's government or to harm or kill its sovereign.


    a violation of allegiance to one's sovereign or to one's state.


    the betrayal of a trust or confidence; breach of faith; treachery.

  • Report this Comment On June 22, 2013, at 4:39 PM, DrEdu wrote:

    DanRD wrote points that have me stunned!

    Dude: I wish our Politicos in Washington would seek your help. You are 100% on the money!

    But the Dems want to increase their base: that of people addicted to welfare, who vote seeking to get 'something' for free.

    Obama and the Dems buy votes with the money you and I -Taxpayers- earned thru hard-work.

  • Report this Comment On June 22, 2013, at 4:50 PM, zardoz333 wrote:

    basically it means that you and i will get to carry the illegal invaders while they continue to get a free ride as well as take away jobs that traitors, people who give them jobs, away from Americans!

  • Report this Comment On June 22, 2013, at 5:03 PM, OnlyAnotherFool wrote:

    I was neutral when Obama was pushing healthcare. I continued to be neutral as the cost of my own healthcare policy went up (according to the healthcare provider it was in "preparation for Obamacare).

    Now I see why all the states that went to court attempting to STOP Obamacare were afraid of happening.

    And now, WE'RE SCREWED!

    Oh, and if the "Dream Act" is ever passed, we can look forward to paying for ANOTHER 11 million people.

    If the U.S. was a person (which they might be if the Supreme Court is making the decision), they would be filing for bankruptcy.

    Now who's the Motley Fool?

  • Report this Comment On June 22, 2013, at 5:08 PM, VegasSmitty wrote:

    If we deported the 12,000,000 that are currently draining the health care system, we'd all be better off!

  • Report this Comment On June 22, 2013, at 6:58 PM, pschaeffer wrote:

    "Comprehensive Immigration Reform" needs to be considered realistically. This is massive Amnesty for every illegal alien who can claim, even fraudulently, that they somehow qualify.

    The next question is what is likely to be the impact of these illegals on our nation. This topic has been extensively researched and the results are highly negative. A number of references make this point all to clearly.

    1. The 1997 National Academy of Sciences study found that each low-skilled immigrant costs $89,000 over the course of his/her lifetime. Of course, the numbers would be much higher now (thanks in part to Obamacare).

    “The NRC estimates indicated that the average immigrant without a high school education imposes a net fiscal burden on public coffers of $89,000 during the course of his or her lifetime. The average immigrant with only a high school education creates a lifetime fiscal burden of $31,000.”

    2. There is little evidence that the children, grandchildren, and great-grandchildren of illegals will do much better. Samuel Huntington looked at this subject in his book, “Who Are We”. See Table 9.1 on page 234. The bottom line is that educational attainment rises from the first to the second generation and then plateaus at levels far below the national average. For example, even by the fourth generation only 9.6% of Mexican-Americans have a post-high school degree.

    3. The Heritage foundation found that low-skill immigrant households impose huge tax costs on Americans. See “The Fiscal Cost of Unlawful Immigrants and Amnesty to the U.S. Taxpayer”. The summary is

    “In 2010, the average unlawful immigrant household received around $24,721 in government benefits and services while paying some $10,334 in taxes. This generated an average annual fiscal deficit (benefits received minus taxes paid) of around $14,387 per household. This cost had to be borne by U.S. taxpayers. Amnesty would provide unlawful households with access to over 80 means-tested welfare programs, Obamacare, Social Security, and Medicare. The fiscal deficit for each household would soar.

    At the end of the interim period (after the Amnesty is complete), unlawful immigrants would become eligible for means-tested welfare and medical subsidies under Obamacare. Average benefits would rise to $43,900 per household; tax payments would remain around $16,000; the average fiscal deficit (benefits minus taxes) would be about $28,000 per household.

    Amnesty would also raise retirement costs by making unlawful immigrants eligible for Social Security and Medicare, resulting in a net fiscal deficit of around $22,700 per retired amnesty recipient per year.”

    4. Heather MacDonald has written extensively on the bleak realities of mass unskilled immigration. I recommend “Seeing Today’s Immigrants Straight”. Key quote

    “If someone proposed a program to boost the number of Americans who lack a high school diploma, have children out of wedlock, sell drugs, steal, or use welfare, he’d be deemed mad. Yet liberalized immigration rules would do just that. The illegitimacy rate among Hispanics is high and rising faster than that of other ethnic groups; their dropout rate is the highest in the country; Hispanic children are joining gangs at younger and younger ages. Academic achievement is abysmal.”

    5. Edward P. Lazear’s (CEA / Harvard Economics) paper “Mexican Assimilation in the United States” has a wealth of statistics showing the raw deal from south of the border. Summary quote.

    “By almost any measure, immigrants from Mexico have performed worse and become assimilated more slowly than immigrants from other countries. Still, Mexico is a huge country, with many high ability people who could fare very well in the United States. Why have Mexicans done so badly? The answer is primarily immigration policy.”

    See also “Lazear on Immigration”. Money quote

    “Immigrants from Mexico do far worse when they migrate to the United States than do immigrants from other countries. Those difficulties are more a reflection of U.S. immigration policy than they are of underlying cultural differences. The following facts from the 2000 U.S. Census reveal that Mexican immigrants do not move into mainstream American society as rapidly as do other immigrants.”

  • Report this Comment On June 22, 2013, at 7:03 PM, popeye1250 wrote:

    And there's another problem.

    I spoke with a U.S. Postal Inspector in Boston, Mass a few years back and she told me that not only is it illegal to use the USPS to mail drug money but *ANY* money that was illegally obtained.

    She said it's called "MAILFRAUD" a federal felony.

    And she said if you use a wire service like Western Union it's called "WIREFRAUD" also a federal felony.

    We have US Citizens in prisons right now for those very offenses.

    Don't we have "equal protection under the law?"

  • Report this Comment On June 22, 2013, at 8:14 PM, OldNDazed wrote:

    I was born here. I'm told I have to buy insurance in order to benefit from Obamacare. Presumably, the newly-leqalized fence jumpers would, as well. Why will they cost so much money?

    I'm in awe of the way Big Pharma and Big Healthcare have managed to manipulate the govt. all these years. Pharma, in particular, is run more like an organized crime industry than anything else, with all the money being in treatment, not cures, and treatment by drugs that B.P. makes 1000's of percent profits from. Absurd profit margins, fake shortages, and utter disregard for those who can't afford the drugs is just the tip of the iceberg.

    Dr.s and hospitals are more upfront about robbing us; they simply charge outrageous prices for everything, and if you don't like it, go to the local witch doctor.....

  • Report this Comment On June 22, 2013, at 8:46 PM, Spartigan wrote:

    The Democrat legislators pushing this new immigration bill down our throats don't care what the huge future cost will be to taxpayers. They are only interested in one thing, more voters for their party.

  • Report this Comment On June 22, 2013, at 8:53 PM, clloyd53 wrote:

    A major hit will be that we will have ten million people immediately eligible for Social Security Supplemental Income disability. And after paying FICA about a year. Be eligible for full Social Security Disability. And half of all immigrants in the country will be eligible for Social Security retirement within 25 years. Or half the time that citizens have paid into the system. All for the sake of more market shares for American corporations and companies.

  • Report this Comment On June 22, 2013, at 10:07 PM, FYN wrote:

    No FREE healthcare for ILLEGALS. NO FREE HANDOUT. NO welfare. NO food stamps.

  • Report this Comment On June 22, 2013, at 10:23 PM, VRSEFgold wrote:


  • Report this Comment On June 22, 2013, at 10:49 PM, lubddy693 wrote:









  • Report this Comment On June 22, 2013, at 11:16 PM, whatthefrick wrote:

    This is who is going to be in charge of this BScare:

    The IRS sent more than $46 million in tax refunds to 23,994 “unauthorized” alien workers who all listed the same address in Atlanta, Ga., in 2011, according to an audit report by the Treasury Inspector General for Tax Administration (TIGTA).

    However, the Atlanta address that received millions of dollars in refunds was not the only address apparently housing thousands of “unauthorized” aliens. In fact, it wasn’t even the only address in Atlanta that was claiming such a situation.

    The TIGTA audit report, published last year at the request of members of Congress, revealed 10 addresses in the U.S. that were issued anywhere from 1,846 to 23,994 tax refunds each. Four of those 10 addresses were located in Atlanta. breaks down the report:

    The IRS sent 11,284 refunds worth a combined $2,164,976 to unauthorized alien workers at a second Atlanta address; 3,608 worth $2,691,448 to a third; and 2,386 worth $1,232,943 to a fourth.

    Other locations on the IG’s Top Ten list for singular addresses that were theoretically used simultaneously by thousands of unauthorized alien workers, included an address in Oxnard, Calif, where the IRS sent 2,507 refunds worth $10,395,874; an address in Raleigh, North Carolina, where the IRS sent 2,408 refunds worth $7,284,212; an address in Phoenix, Ariz., where the IRS sent 2,047 refunds worth $5,558,608; an address in Palm Beach Gardens, Fla., where the IRS sent 1,972 refunds worth $2,256,302; an address in San Jose, Calif., where the IRS sent 1,942 refunds worth $5,091,027; and an address in Arvin, Calif., where the IRS sent 1,846 refunds worth $3,298,877.

  • Report this Comment On June 22, 2013, at 11:29 PM, PaulFrevere wrote:

    People get real. The Government is bought and paid for by international corporations, it doesn't matter what party you affiliate with. The elites who run this nation want socialism for the masses and fascism for the leaders. This is the perfect police state, the people are divided against themselves. Obush or GW Obama its the same thing. The constant dance between communism or fascism and we are the enslaved dupes. We will all bicker and quarrel for our home team blue or red while the corrupt Government makes decisions that benefit who is really in charge and that's certainly not the people. Take a good hard look at what is going on, seriously is this hope and change, or blame Bush, well really does it matter now? the USA is the largest debtor nation in the world. The real unemployment rate is a secret, The press is a bought and paid for joke. We are going to legalize 50 million immigrants from all over the world including Mexico and here comes the racist card and it doesn't matter what race we're talking about cause we are pitted against each other meanwhile American citizens are out of work which includes our returning veterans. You have all been played and Obama's the emperor who's transparency is the same as his clothes (non existant) and as far as Bush - notice the resemblance to Alfred E. Newman?

    When we all start with constitutional ethical principles that protect us all and forget corrupt political parties we will be back on the road to freedom and prosperity. That means quit complaining AND EDUCATE YOURSELVES TO WHAT'S GOING ON ! The change comes from each of us doing something. May I suggest reading the founding of our country, read George Orwell's 1984 or the Star chamber. Check out the history of the October revolution and Kristallnacht and maybe get a clue. Obama indeed!

  • Report this Comment On June 23, 2013, at 12:24 AM, taug99 wrote:




  • Report this Comment On June 23, 2013, at 12:32 AM, motleyscrewed wrote:

    If one is an indigenous American (ironically many of those whom are being targeted as illegal immigrants actually ARE descended from the original inhabitants) then we are all either immigrants or descended from immigrants, many of whom could be labeled "illegal", including the original settlers who simply came and took land that didn't belong to them by force or trickery. Nobody seems to have much of a problem with the fact that our forefathers had no respect for the laws and cultures that were here before us. Of course it's way too late to do anything about that now, but it still makes all this screaming about "illegals" seem highly hypocritical and mostly gaseous, bloviating nonsense.

  • Report this Comment On June 23, 2013, at 1:10 AM, bc3b wrote:

    Motleyscrewed - If your liberal heart is feeling white guilt (like the two times you foolishly voted for Obama), sell your possessions, give the money to the Indians and move back to wherever your ancestors came from. Don't try to force your bleeding heart idiocy on the rest of us.

  • Report this Comment On June 23, 2013, at 2:07 AM, airjackie wrote:

    A nation founded by immigrants sees the need to remove immigrants. Wow. Well Mass. is doing great with Romneycare for 7 years and services include immigrants. Obamacare is the same plan and some see a problem. Things will never go back to when minorities paid into the federal government but got no service. 1950 minorities paid taxes but had no service and even schools were not paid as it was segregation. 1964 when everyone was included it became a problem. Some Republicans and Tea Party Governors/lawmakers would rather go back to when minorities paid taxes but not no service. It was better to assure the right people benefitted.

  • Report this Comment On June 23, 2013, at 5:15 AM, bugmenot wrote:

    I am expecting the outbreak of a full on, shooting second civil war in this country over this issue.

    And you tell me this make have an impact greater than I expect...?

  • Report this Comment On June 23, 2013, at 9:04 AM, harryshome2 wrote:

    What the hell dont you idiot politicians dont understand? No Reform !!! ENFORCE!!!! This would be just a huge draw on an allready overdrawn system! You dont reward criminals!!!You punish them!!!

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