SCHIP Bill Increases Illegal Immigrants' Access to Medicaid and Undermines Welfare Reform
Under current law, illegal immigrants are eligible for emergency
medical services funded through the Medicaid program but are not
eligible for normal benefits through Medicaid or the State
Children's Health Insurance Program (SCHIP). In addition, according
to the provisions of the 1996 welfare reform law, legal immigrants
are not eligible for normal Medicaid and SCHIP benefits for the
first five years they reside in the United States.
The Children's Health Insurance Program Reauthorization Act of
2007 (H.R. 3963),passed in the Senate and the House of
Representatives, significantly changes the law with respect
to both legal and illegal immigrants. H.R. 3963 affects not only
SCHIP but also the far larger general Medicaid program.
Specifically, the SCHIP reauthorization bill:
- weakens the evidentiary and document standards governing entry
into the Medicaid program, thereby making it easier for illegal
immigrants to fraudulently obtain benefits; and
- overturns the limitations on immigrant use of Medicaid enacted
in the 1996 welfare reform law by gutting the administrative
procedures used to determine immigrant eligibility, thereby readily
permitting immigrants to receive benefits for which they remain
Problems with the Bill
- Increasing Fraud by Illegal Immigrants. Current law
requires individuals who claim to be U.S. citizens to provide
documentary evidence of citizenship before enrolling in Medicaid. H.R.
3963 bypasses this requirement. Under H.R. 3963, applicants
for Medicaid would be required to provide only a name and Social
Security number that correspond to a valid identity on file with
the Social Security Administration. At the present time, a great
many illegal immigrants provide the names and Social Security
numbers of real U.S. citizens to obtain work in the United States.
Under H.R. 3963, a state agency processing a Medicaid application
is merely required to ascertain (after benefits are allocated)
whether the name and Social Security number on the application
correspond to a valid individual on file with the Social Security
Administration. In contrast to existing law, under H.R. 3693, the
state agency would not be required to take any steps to determine
if the applicant is actually the individual he purports to be, or
to determine whether the individual is actually a U.S. citizen.
Since many illegal immigrants routinely use "borrowed" Social
Security numbers to obtain jobs, it seems likely that many would
also use those numbers to fraudulently obtain Medicaid
- Undermining welfare Reform: legal Immigrants and
Medicaid. The 1996 welfare reform law (the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996, or
PRWORA) restricts eligibility of legal immigrants to Medicaid,
SCHIP, and other means-tested welfare programs during their first
five years in the United States. While H.R. 3963 does not
explicitly revoke these limitations, it does weaken their
administrative enforcement with the probable effect of allowing
large numbers of legal immigrants to receive Medicaid benefits
prior to the five-year eligibility threshold.
Under current law, a Medicaid applicant who claims that he is a
U.S. citizen must provide documentation proving citizenship. legal
immigrants who are not yet citizens (legal permanent residents) are
checked against the Systematic Alien Verification for Entitlement
(SAVE) database, which contains information on length of residence
and other factors relating to welfare eligibility. H.R. 3963 does away
with the requirement to provide documentation of citizenship.
Applicants who claim citizenship and possess a valid Social
Security number are deemed eligible if they appear to meet the
Medicaid income limits.
The designers of H.R. 3963 appear to believe that all individuals
who have Social Security numbers are U.S. citizens and therefore
eligible for Medicaid or SCHIP; however, this is not the case. In
fact, most lawful non-citizen immigrants (legal permanent
residents) have valid Social Security numbers. Under H.R. 3963, a
legal permanent resident who falsely asserts he is a citizen and
offers his valid Social Security number may be automatically
enrolled in Medicaid. The claim of citizenship need not be checked,
and eligibility need not be verified by information from the SAVE
system. This change would substantially weaken the limitations on
immigrant use of welfare enacted in PRWORA.
- The Express Lane Application System: Bypassing the SAVE
System. H.R. 3963 give states the option of operating an
Express Lane application system for enrolling children in Medicaid
and SCHIP. This option would go even further than the basic
Medicaid application procedures established in H.R. 3963 in
undermining the current legal limitations on immigrant use of
welfare. The Express Lane process entirely bypasses the SAVE system
now used to determine immigrant eligibility for means-tested
With the Express Lane, an immigrant child who does not claim to be
a citizen but who possesses a valid Social Security number (as many
legal permanent resident children do) may be automatically enrolled
in Medicaid or SCHIP without having his application checked by the
SAVE system. Thus, states may provide Medicaid and SCHIP
to legal immigrant children without determining if they are legally
entitled to those benefits. H.R. 3963 therefore provides a de facto
neutering of the limitations on immigrant use of Medicaid and SCHIP
enacted in welfare reform. The Express Lane would allow thousands
of legal immigrants to receive Medicaid and SCHIP benefits
irrespective of the length of their residence in the United States.
H.R. 3963 adds insult to injury by providing that no state may be
financially penalized for providing Medicaid or SCHIP benefits to
ineligible immigrants through the Express Lane system.
Reducing Fraud and Misuse of Taxpayer
Proper government policy should ensure that individuals
receiving benefits under Medicaid, SCHIP, and other means-tested
welfare programs are, in fact, legally eligible for assistance. In
order to accomplish this, four standards should be maintained in
the application process:
- Applicants claiming citizenship should provide documentation in
accordance with section 1903 (x) of current law.
- Applicants claiming citizenship or legal permanent residence
should (where applicable) provide their name, Social Security
number, and date and place of birth; this information should be
cross-referenced against the Social Security Administration
- Eligibility of non-citizens should be determined using data
from the SAVE system.
- Income should be verified through the Income and Eligibility
Verification System (IEVS).
In general, fraud could be reduced within the welfare system
through the expeditious implementation of the REAL ID Act of
H.R. 3963 fails to adequately prevent abuse of taxpayer funds.
It increases opportunities for illegal immigrants to obtain
Medicaid benefits and for legal immigrants to enroll in SCHIP or
Medicaid before living in the U.S. the requisite five years. As
such, the legislation is a significant step backward in efforts to
prevent welfare fraud. Members of Congress should go back to the
drawing board and craft a reauthorization proposal that includes
safeguards to protect taxpayers and to ensure that welfare payments
go only to those who are legally eligible.
Robert E. Rector is Senior
Research Fellow in Domestic Policy Studies at The Heritage
Show references in this report
Section 1903 (i) (22) and section 1903 (x) of
the Social Security Act (42 U.S.C. 1936a) require documentary
evidence of citizenship from Medicaid applicants. Regulations
concerning documentary evidence of citizenship and the Medicaid
program are found in "Medicaid Program: Citizenship Documentation
requirements" (CMS 2257-IFC) (71 FR 39214).
Section 211 (a) (1) of H.R. 3693 effectively
bypasses the current law provisions concerning documentary evidence
of citizenship by amending section 1902(a) (46) and section 1903
(i) (22) of current law to make adherence to the evidentiary
provisions of section 1903 (x) of current law a state option.
section 211(a) (1) of H.R.3693.
Section 403 of the Personal Responsibility and
Work Opportunity Reconciliation Act of 21996, public law 104-193
(42 U.S.C. 1641).
section 1903 (x) of the Social Security Act.
Current law governing Medicaid enrollment
requires verification of immigration status by the Immigration and
Naturalization Service through the use of the SAVE system. See
section 1137 (d) of the Social Security Act (42 U.S.C. 1320
3963 allows states to bypass the Immigration and Naturalization
Service and the Systematic Alien Verification for Entitlement
(SAVE) system; section 203(a) of H.R. 3963 explicitly states that
states may use the Express Lane application process to determine
Medicaid eligibility "notwithstanding" section 1137 (d) of existing
law, which requires verification of immigrant status by the
Immigration and Naturalization Service through the Systematic Alien
Verification for Entitlement (SAVE) system.
the normal Medicaid and SCHIP application process created by H.R.
3963, an immigrant application must claim citizenship in order to
bypass the SAVE system. Under the Express Lane system, the
Immigration and Naturalization Service and the SAVE system may be
bypassed even if the applicant does not claim citizenship.
See subparagraph E (i) and (iii) under
Express Lane Option of section 203 of H.R. 3963.