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Illegal Immigrants Give Billions to Medicare, Social Security With No Hope of Benefit

Illegal Immigrants Give Billions to Medicare, Social Security With No Hope of Benefit

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Patriotic Stethoscope

Sophia, 44, works up to 40 hours per week at a Mexican restaurant in Gurnee, Ill., making $10 an hour.

With every paycheck, she said, $136 goes to payroll taxes, $62 of which goes to Social Security and Medicare; that means that 6.2 percent of her wages go to the Social Security Administration and another 1.45 percent goes to the Medicare’s Hospital Insurance (HI) Trust Fund.

“I’ll never see that money again,” she said in Spanish. Sophia, who declined to give her last name, is an illegal immigrant from Mexico.

Sophia came to the United States legally 13 years ago when she applied and was granted a temporary worker visa. She moved from one low-paying job to another. She was a babysitter, worked at the fast-food restaurant Jimmy Johns, and cleaned houses for Merry Maids. The mother of two moved to her current job just as her permit was set to expire 5 years ago. Today, she works as a kitchen manager, using her now-invalid Social Security number and different name to deter immigration officials.

Retirement is still far off for Sophia, who is relatively healthy. Yet concerns on how she will pay for hospital visits and medications as she gets older are already on her mind.

“Right now, my only option is to work. Even when I’m too old, I need to work,” she said, taking a break from overseeing the kitchen where two other undocumented immigrants from Mexico work. “I know costs for (medicine) are only going to get more expensive.”

Sophia is not alone. As politicians continue to debate proposals to reform Medicare and extend the solvency of the federal health insurance program for Americans ages 65 and older, many of the estimated 10.8 million illegal immigrants in the United States continue to provide the Medicare and Social Security systems with financial support—by the billions of dollars each year.

However, unlike the millions of Americans who retire each year, these same undocumented workers won’t receive benefits from the federal health insurance program or the Social Security Administration (SSA).

Earnings Suspense File

Experts say illegal immigrants make up a majority—possibly up to 75 percent—of SSA’s “earnings suspense file,” which is a record it keeps on W-2s where the names and Social Security numbers don’t match up in their system.

In 2010, the last year for which figures are available, employers reported wages of $70.3 billion from 7.3 million workers whose records were placed in the earnings suspense file, according to data provided by the SSA to The Medicare NewsGroup.

These payroll taxes, however, go straight to their respective trust funds. This amounts to about $2 billion for Medicare and $8.7 billion for Social Security in 2010.

The Medicare payroll tax finances, in large part, the Medicare’s Hospital Insurance (HI) Trust Fund, which pays for inpatient services for Medicare beneficiaries who have Medicare Hospital Insurance (Part A). The HI Trust Fund collected $215.6 billion in 2010, of which payroll tax revenue made up 84.4 percent of that income.

While Medicare contributions in the earning suspense file amount to just over 1 percent of the total revenue the program received from payroll taxes directed to the Medicare HI Trust Fund, those dollars represent real value in terms of their contribution toward extending the life of the program, says attorney Gregory Schell of the Florida-based Migrant Farmworker Justice Project, a legal advocacy group for farm workers.

From 2001 through 2010, the total Medicare contributions from the suspense file amounted to about $21 billion dollars.

 “It’s almost equivalent to a slush fund,” Schell said. “It’s money that benefits everyone else but never those who paid for those taxes.”

While some records in the earnings suspense file are due to errors in paperwork, most are believed to be from illegal immigrants.

Social Security’s chief actuary Stephen C. Goss told The New York Times in 2005 that they assume about 3 out of 4 “other-than-legal immigrants” pay payroll taxes.

Health Care Costs of Illegal Immigrants

Despite the money illegal immigrants pay into the program, Ira Mehlman, spokesman for the Federation for American Immigration Reform (FAIR), which advocates for stricter enforcement of immigration laws, says the costs of illegal immigrants to local, state and federal governments greatly outweigh their contributions.

“If you look at all the costs associated with illegal immigration, it is logically inconceivable they pay enough taxes (from low-paying jobs) for the services they receive. It defies logic,” he said.

While data are scarce on illegal immigrants’ costs and use of health care services, especially for those who are seniors, “billions of dollars are estimated to be spent each year,” according to the American College of Emergency Physicians. Emergency departments are required by law to provide care to everyone who seeks treatment, including those without health insurance, which is the case for many illegal immigrants.

According to a FAIR cost study on illegal immigration, the federal government is estimated to spend nearly $29 billion per year on educational, welfare, medical and other services for illegal immigrants. The study estimates that $6 billion go toward medical expenses, including $250 million for emergency medical care a year. However, the FAIR study includes the medical costs of an estimated 3.4 million children who are U.S. citizens with illegal immigrants as parents.

It’s unknown how much more it would cost, or save, if illegal immigrants were to utilize Medicare benefits instead of costly emergency room care.

Gaping Loophole

The transition from employers paying illegal immigrants under the table to adding them to payrolls came after President Ronald Reagan signed the Immigration Reform and Control Act in 1986.

Today, about half of illegal immigrants come with valid visas but choose to not follow the terms, said demographer Michael Teitelbaum, former vice chair of the U.S. Commission on International Migration.

The 1986 law required employers to ask for paperwork, such as a Social Security and green cards, from workers seeking jobs.

But there’s a gaping loophole. Schell said the law doesn’t require employers to verify the work authorization of new hires.

Fake Social Security cards are easily attainable, selling for between $100 and $150 in some flea markets, he said.

In some cases, Schell said, employers provide employees with names and numbers of former workers to avoid receiving notices from Social Security regarding discrepancies.

If the SSA notifies employers that a worker’s Social Security number and name don’t match, many employers simply ask the employee to get a new 9-digit number.

Sophia said her employer forwards her the notifications, though those letters from Social Security are simply ignored.

“(Social Security) just tells me that I need to straighten it out so I can claim the benefits,” she said. “Obviously, that’s not an option.”

Even as controversial verification options such as E-Verify, an Internet-based program designed to verify work authorization of new hires, become more available, a majority of states have implemented laws to limit the use of the program.

According to the National Conference of State Legislatures, only Arizona requires the use of E-Verify for all employers, public and private. Some states, such as Alabama and Mississippi, are phasing in the program. Others only “encourage” the use of the program, leaving it up to companies to implement it, while states like California and Illinois have enacted legislation limiting its use.

“As long as (a Social Security card) looks OK,” Schell said. “As long as it doesn’t have Mickey Mouse’s picture on it, (employers) don’t have to look further.”

Limited Options

When she turns 65, Sophia said she expects to still be working. As she continues to get older, Sophia said she knows her health will be a concern. Her health care costs, due to age-associated diseases and the prescription drugs she’ll need, will likely rise.

The elderly represents about 43 percent of those individuals who were in the top 10 percent health care spenders in the United States in 2008 and 2009, according to the Agency for Healthcare Research and Quality. Data on the health care costs of illegal immigrants who are 65 years or older is unavailable.

Since Sophia is unable to claim Medicare benefits, options for paying for health care remains limited.

“Some clinics, some churches and organizations will offer help,” Sophia said.

However, if she develops multiple chronic conditions, such as obesity or heart disease, her bills will likely skyrocket. If she is unable to pay all of her medical bills, most of the burden falls back to the federal and state governments, which are the primary sources of funding for uncompensated care of the uninsured, according to a Kaiser Family Foundation report. Uncompensated care is health care that has not been fully paid for.

Combining federal, state, and local funding streams, $42.9 billion dollars was spent on uncompensated care for the uninsured in 2008. Sixty percent of those government dollars was money flowing through the Medicare and Medicaid programs, according to the report.

“There are family members and friends who will usually help out,” Sophia said of her future medical bills. “There are really no options but to try pay as much of it myself.” (MNG) original articles can be reprinted or republished with credit to The Medicare NewsGroup. To use our content, simply copy and paste text from the MNG website. Use of our content is done in compliance with our Terms and Conditions but does not extend to material from other sources that are subject to their copyright.


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If these illegal immigrants are working and taxes are being withheld, then they are using someone else's Social Security number and are guilty of identity theft. 75-percent of all working-age illegal immigrants have stolen or forged Social Security numbers. Millions more have phony green cards and fake drivers licenses and birth certificates.

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If they're going to be making my contributions to medicare and social security, I'm happy for them to "steal" my identity!

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if a illegal goes to a emergency room at the hospital ,has no insurance who pays for that care? if a illegal has children and those children go to public school who pays for there education ? If a illegal go to jail for a rape, murder, drugs, who pay ? if a person stand in line to become a United Stated citizen ,should we let illegals by pass the line ? illegals have broken into our homes,, our nation, our way of life,

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The IRS issues us a ITIN. It is a international tax identification number so we are able to pay all the taxes. I work, pay taxes, didnt steal a ss... And still have no rights!!!

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The tax contributions from illegal immigrants,including sales taxes,property taxes and excise taxes are significant.

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In no way do these contributions come close to covering the cost illegals put on every American tax payer.

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Thank you for the comments.

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It's a great news that after getting retirement in the medical department,the treatment for the family is free of cost.

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Not all Social Security numbers are stolen most of them are random numbers, made up by them.

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Social Security is mainly financed through dedicated payroll taxes called government Insurance assistance. Levy deposits are formally entrusted to the government Old-Age and Survivors Insurance.Your health sources will not be asked if you are disabled. That determination is made by a state bureau group, which includes a disability examiner and a health consultant.

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Personally, I see nothing wrong with immigrants, including the Chinese and Muslims. Moderate immigration is always a positive effect on the well-being of the economy and foreign policy of every country. As I read in this <a href="">post </a> the immigration situation of 80-90s in general had a positive impact on the economy. As we continue to welcome new immigrants to our shores, we can keep progressing, keep building and keep moving the world as a whole forward in a more positive direction.

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Alex. I'm not against immigrants too. The problem here is quite different. This hole in the health system and the duality of Medicare policy. On the one hand, if illegal immigrants pay taxes, they can receive and the care of the state, is not it? Social security, health insurance and so on? And if not, then why do they have to pay taxes?

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Legal immigrants are not the problem, it's the ones here "illegally" committing fraud having a fake social security card with possibly a real living citizen's number. I found out my son's social security number was recently used illegally by a Hispanic man in a Portland hospital and left a hefty bill behind. I'm still sorting that out! They are the problem. 60 % of HUD housing is occupied by people here illegally, less than 1% of illegals are picking crops and 41% are on welfare, 43% of all food stamps are used by illegals. There are good hispanics out there that got their green cards visas and have obeyed the law and contributed to our great country. But don't whine to me why you can't get social security benefits you paid in on a fraudulent social security card! Go home and file to immigrate into the US through the proper channels. Many don't because they would be ineligible due to felonies on their records. Every nation in the world has a right to secure its borders.

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Facebook memes are not a news source. Please keep your alternative facts to yourself or maybe, just maybe, think for yourself too.

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PS Thanks Kimber Solana for a sharp view and good article

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Kimba Solana lost me when he said that "Sophia, 44, works up to 40 hours per week at a Mexican restaurant in Gurnee, Ill., making $10 an hour." So this woman makes about $400 peer week. "With every paycheck, she said, $136 goes to payroll taxes, $62 of which goes to Social Security and Medicare; that means that 6.2 percent of her wages go to the Social Security Administration and another 1.45 percent goes to the Medicare’s Hospital Insurance (HI) Trust Fund."

If 6.2% of her wages goes to SS that is $24.80. Another 1.45% to Medicare is $5.80. So the total for SS and Medicare is $30.60 not $62 as the author claims. If this woman is having $62 taken out of her $400 check each week for SS and Medicare, then she is being cheated by her employer and that is unfortunate. Perhaps more unfortunate is the real possibility that she will never be eligible to receive benefits because she is working under a false name using an illegal SS number.

The reporter lost me immediately when his numbers had no credibility. He is just another clown with a journalism degree who spouts whatever he is told. I have to ask how much, if anything that he writes, he actually take the trouble to verify. This is one of the main reasons why the media is so vilified today.

This country has an immigration problem. While I am not a proponent of deporting 11 million illegal immigrants back to Mexico, something must be done to address the situation as it exists today. If illegals are working using illegal Social Security numbers, that is a problem. If employers are not vetting them, that is a problem. If employers are not submitting Social Security collected from employees that is a problem.

We have a broken system. It is perpetuated by the fact that many industries depend upon cheap, illegal labor, and might not be viable if they had to pay "legal" workers and fully address tax obligations. The "fix" will likely end up pushing the costs of many things we buy and services we pay for higher. The implications of those higher costs of labor are complex.

Mr. Solana's LinkedIn page claims he, "Analyzed and conducted research of Medicare facts and quotes in media, which uncovered inaccuracies and improved understanding of health care policy." Parts of this article suggest that he falls quite short on the analysis and research claimed.

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Your numbers and the author's match. Paychecks are typically given every two weeks. So 30.60 every week is $62 every paycheck.


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