During the 1990s, North Carolina’s Hispanic population increased 393 percent – the fastest growing of any state in the country.12 Today, North Carolina has the eighth fastest growing Hispanic population in the United States. According to estimates by the Pew Center, approximately 65 percent – or more than 330,000 persons – of North Carolina’s Hispanic population is illegal.
Illegal workers who pay into the federal tax system do so via payroll contributions to Social Security, Medicare and unemployment insurance. They also pay sales taxes and other taxes that go into state and local coffers. Nevertheless, most illegal immigrants hold low-wage jobs that translate into low tax revenue per capita. Moreover, while many of the taxes paid by illegals are collected by the federal government, state and local governments are disproportionately responsible for providing many of the services consumed by illegals.
Yet even at the federal level, illegal immigrants use more in services than they contribute in taxes. According to a 2004 study by the Center for Immigration Studies: “Households headed by illegal aliens imposed more than $26.3 billion in costs on the federal government in 2002 and paid only $16 billion in taxes, creating a net fiscal deficit of almost $10.4 billion, or $2,700 per illegal household.” These conclusions are in line with a 1997 study by the National Research Council.
As far as healthcare costs go, the Federation for American Immigration Reform (FAIR) estimated that, as of 2004, more than 3.5 million immigrants were covered by Medicaid. FAIR likewise reports that “in some hospitals, as much as two-thirds of total operating costs are for uncompensated care for illegal aliens.” According to research by the News & Observer, North Carolina had more than $1.4 billion in unreimbursed hospital costs in 2003; a significant share of these costs resulted from care given to uninsured illegal aliens. Of course, unrecouped costs reappear in the prices of goods and services of those who pay for their own healthcare.
The precise cost of providing healthcare to illegals is difficult to determine, however, primarily because medical professionals generally do not ask whether patients are in the United States legally. Statistics submitted by WakeMed Faculty Physicians, an OB/GYN practice in Wake Forest, indicate that 40 percent of the babies it delivered were born to illegal immigrants. Each birth cost between $6,800 and $18,000. In most cases, the tab was picked up by taxpayers through Emergency Medicaid. Indeed, a recent study (March 2007) in the Journal of the American Medical Association found that between 2001 and 2004 total spending on Emergency Medicaid services for illegal immigrants in North Carolina increased by 28 percent. In 2004, 82 percent of this spending was for childbirth and complications related to pregnancy. Spending for elderly illegal immigrants also increased rapidly. Overall, state Medicaid spending for illegals more than doubled between 2000 and 2005, going from $25.8 million to $52.8 million.
The RAND Corporation, a nonprofit public policy think tank, estimates that while one-fifth of illegal immigrants have health insurance the cost of providing healthcare for the other 80 percent is high. Most of this cost is absorbed by hospitals that are then compensated through Medicaid. This results in higher taxes for U.S. citizens, as well as higher hospital costs for privately insured patients.