Anti-immigrant healthcare policy will cost Americans money

As part of the general political climate where it's important for politicians never to be seen doing anything remotely nice to undocumented immigrants, the recent healthcare reform act excluded them entirely from its provisions. Now, I understand the argument of not wanting to extend subsidies to UIs, particularly given that many of them participate in an underground economy and don't pay taxes - the argument being that you don't want to draw people to the US just so they can tap into social services benefits, particularly if those people aren't contributing.

For the moment we'll leave aside the counter-argument that few people emigrate for that purpose, and the fact that many UIs use fake social security numbers and consequently pay into entitlement programs that (medicare and social security) to which they'll never have access. The interesting, and extremely counter-productive provision built into the new law is that undocumented immigrants are prohibited from using their own money (no government subsidies) to buy into the exchanges ( insurance markets that will bet set up on a state-by-state basis to sell insurance to people who aren't covered by their employers.) This bit of red meat for the anti-immigrant crowd is stupid, lousy policy for two main reasons:

1.) The undocumented immigrant population in the US is significantly younger, and healthier (largely by dint of age) than the US population as a whole (and than the average uninsured American). That means that the exchanges will be missing out on a batch of young, healthy customers who would subsidize the exchanges by (on average) paying more in premiums than they consume in healthcare. This would result in lower prices for everybody else buying into the exchanges, and less government spending on subsidies for people who can't afford to buy insurance on the exchanges on their own. Furthermore, the more people that buy into the exchanges, the lower the premiums will be because of competition for the pool and economies of scale. Undocumented immigrants make up about 20% of the uninsured - excluding them from the exchanges means higher prices for everyone else.

2.) As, without the exchanges, it will continue to be almost impossible (or ruinously expensive) to buy individual insurance, undocumented immigrants shut out from the exchanges will continue to be largely uninsured. However, as happens now, when uninsured people go to the hospitals, they aren't turned away- the hospital just eats the cost, and passes it along to everyone else. The reform law shuts the door on people who are interested in being responsible and insuring themselves, and forces their medical costs onto local hospitals.

This is all par for the course for American immigration policy - like the provision in medicaid that legal immigrants have to wait five years to access Medicaid (even though somebody could legally immigrate to the US, and then after working here and paying taxes for three years could become disabled but be ineligible for medical assistance). Even when pro-immigrant policy benefits everyone else (a win-win), many politicians catering to anti-immigrant voters would "get tough on illegals" than save money for their constituents.