States Must Pay Health and Education Benefits to Illegal Immigrant Families

When the federal government neglects to control the border, the resulting illegal immigration imposes an “unfunded mandate” on the states. The states must spend money on a problem created by the federal government without receiving federal reimbursement. Some of the state expenditures are for population-based services — roads, bridges, police, courts, etc. — which naturally increase in cost as the population increases. But the costs of illegal immigration are not limited to infrastructure. States also must provide social services to illegal immigrants, primarily on behalf of their children.

Consider the example of Florida. The state’s governor, Ron DeSantis, has been especially vocal about the costs that illegal immigration has imposed on his state, and he is right to be concerned. Based on an analysis of the American Community Survey, there were nearly 800,000 illegal immigrants in Florida in 2019. Table 1 shows the cost of associated government services. For example, among non-disabled children (both U.S.- and foreign-born) living in households headed by an illegal immigrant, about 129,000 were on Medicaid. With a per-person cost of $957, this Medicaid coverage cost the state a total of $123 million. Florida also spent a combined $52 million on illegal immigrants who gave birth either on Medicaid or (much more commonly) without insurance, which usually generates Medicaid spending.

By far the largest cost, however, was $1.6 billion to educate the U.S.- and foreign-born children of illegal immigrants. The Supreme Court case of Plyler v. Doe (1982) established that states must provide free public schooling to illegal immigrants — even though the federal government is responsible for controlling illegal immigration and offers no reimbursement to states when it fails to do so.

Of course, this is not a complete fiscal analysis. Illegal immigrants do pay taxes as well as consume services. In fact, Florida’s lack of a state income tax works to its advantage here. The state’s sales and property taxes are less progressive and more difficult to evade than an income tax, which leads to illegal immigrants likely paying more than they would in most other states. Nevertheless, when the National Academies of Sciences, Engineering, and Medicine calculated the complete fiscal impact of all immigration (legal and illegal) in Florida, it found a net cost of $1.1 billion annually.

Table 2 suggests that illegal immigrants contributed more to that fiscal deficit than did their legal immigrant counterparts. The reason is that illegal immigrants generally lack the earnings power necessary to make retail and property purchases that result in large tax payments. Over 30 percent of illegal immigrant adults in Florida in 2019 did not have a high school diploma, compared to 14 percent of legal immigrants and just 9 percent of natives. The low level of education translates to earnings that are only about 60 percent as high as native earnings. Poverty rates among illegal immigrants are also considerably greater.

This analysis is not intended to imply that the only relevant impact of border security is budgetary. Failure to control illegal immigration has legal, political, and cultural effects that go beyond dollars and cents. Nevertheless, the unfunded mandates inherent to a lax border policy are one clear illustration of how the federal government is failing in its duties to the states.

Methodological Notes

This analysis uses the 2019 American Community Survey (ACS) to approximate the number of illegal immigrants in Florida who use government services, such as new mothers on Medicaid. Various outside sources are then consulted to establish per-person costs associated with those services.

Identifying Illegal Immigrants in the ACS. Illegal immigrants are present in Census data, but they are never explicitly identified by the Bureau. To determine which respondents are most likely to be illegal, CIS starts by eliminating immigrant respondents who are almost certainly legal — for example, spouses of natural-born citizens; veterans; people who receive direct welfare payments (except Medicaid for women who gave birth within the past year); people who have government jobs; Cubans (because of special rules for that country); immigrants who arrived before 1980 (because the 1986 amnesty should have already covered them); immigrants who arrived at age 60 or older; people who earn more than $200,000 per year; people in certain occupations requiring licensing, screening, or a government background check (e.g., doctors, pharmacists, and law enforcement); and people likely to be on student visas.

The remaining candidates are weighted to replicate known characteristics of the illegal population (population size, age, gender, region or country of origin, state of residence, and length of residence in the United States). CIS has previously used the Department of Homeland Security (DHS) as the source of those known characteristics; however, DHS data were last published for the year 2018. For more recent data, we turn to 2019 estimates from the Center for Migration Studies (CMS), including its estimates of educational attainment. The resulting illegal population, which consists of a weighted set of ACS respondents, is designed to match CMS on the characteristics listed above.

Childbirth on Medicaid. The Health Care Cost Institute estimated that the average birth in Florida cost $15,000 during the 2016-2017 time period. Inflating that cost to 2019 levels using the healthcare portion of the CPI yields $15,925. Then subtracting the federal share of 60.87 percent gives the average state cost of $6,231 used here for births.

Childbirth Without Insurance. Although mothers are sometimes unaware that Medicaid is involved in paying for their childbirth, in practice almost all births to “uninsured” women are covered by the program, as only 4.2 percent of births in the U.S. in 2019 were self-pay. (See Table 19, here.) Among illegal immigrants in Florida who recently gave birth, 86 percent of those who self-describe as uninsured report that their newborns are covered by Medicaid, which implies (conservatively) that 86 percent also had their childbirths covered by Medicaid. The per-person cost is therefore 0.86 multiplied by $6,231 = $5,359.

Medicaid for Non-Disabled Minors. The Kaiser Family Foundation reports that the per-child cost of Medicaid coverage in 2019 was $2,445, which drops to $957 after subtracting the federal share.

Medicaid for Disabled Minors. The same Kaiser data indicates that Florida’s share of the Medicaid expenditures for the disabled is $4,762 per person.

Public Schooling. According to the Census Bureau, Florida’s per-pupil current expenditures were $9,645 in 2019. (See Sheet 8 after clicking on “Summary Tables”, here.) Dropping the 10.9 percent of school revenue that came from federal sources (see Sheet 5) yields a per-pupil expenditure by state and local governments in Florida of 0.891 multiplied by $9,645 = $8,594. Although the children of illegal immigrants are more likely than natives to require English for Speakers of Other Languages (ESOL), the exact proportion eligible is unclear, as is the cost increment associated with participating in ESOL. Therefore, the cost of schooling calculated here assumes that the children of illegal immigrants impose the same costs as average Florida students.