Senior Democrat turns healthcare debate into fight over illegal immigration

Sen. Robert Menendez (D-N.J.) is putting Democrats in a bind by seeking to let illegal immigrants benefit from the healthcare overhaul.

Menendez, the only Hispanic senator, has considerable leverage with Democrats because he may represent the deciding vote on the Senate Finance Committee set to mark up the legislation next week. He’s also the party’s campaign committee chairman, giving him added influence.

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Menendez said he is withholding his support for the bill until his concerns about immigration and other matters are addressed.

His objections come one week after President Barack Obama staunchly disputed GOP accusations that the healthcare proposal would aid illegal immigrants — prompting the now-famous “You lie!” outburst from Rep. Joe Wilson (R-S.C.).

The Senate Finance Committee bill, drafted by centrist Chairman Max Baucus (D-Mont.), does not allow illegal immigrants to purchase health coverage over an exchange set up to create competition within the insurance industry and reduce costs.

Menendez is troubled by that language and has joined Hispanic advocacy groups in criticizing the bill for placing too heavy a burden on legal and illegal immigrants.

Immigrants are not required to show proof of citizenship or legal residency to buy health insurance. If they were prohibited from participating in an insurance exchange, they would be forced to buy coverage at a significantly higher cost than legal residents.

Hispanic advocates argue that companies employing illegal immigrants would be tempted to opt out of the national health insurance exchange to avoid having to verify the immigration status of all their workers. Nearly half of illegal immigrants receive health insurance from their employers, according to one estimate.

“We’re not very pleased with the provisions in the bill,” said Brent Wilkes, national executive director of the League of United Latin American Citizens. “We think it goes far beyond what is necessary to prevent undocumented immigrants getting tax-subsidized benefits.”

Menendez and the Hispanic advocacy groups are also concerned with how Baucus would treat families made up of both legal and undocumented residents.

“I have a series of concerns about the bill,” Menendez said.

Satisfying Menendez’s objections to the immigration provisions will not be an easy task. Any concessions making it easier for immigrants to buy insurance could be seized on by opponents who have accused Democrats of planning to subsidize health plans for illegal immigrants.

But Menendez has more power on the Finance Committee than usual because the second-ranking Democrat, Sen. Jay Rockefeller (W.Va.), has said there is “no way” he will vote for the healthcare reform package assembled by Baucus.

The Finance panel has a 13-10 Democratic advantage, and while several Democrats on the committee have raised concerns about the bill, Rockefeller and Menendez are the most critical.

The New Jersey Democrat is also concerned about whether low- and middle-income residents of his state would receive high enough federal subsidies to afford coverage, and is skeptical of a proposal to tax high-cost insurance plans. New Jersey’s healthcare premiums, on average, rank among the costliest in the country.

As chairman of the Democratic Senatorial Campaign Committee, Menendez understands the importance of Hispanic voters, a fast-growing electoral bloc that overwhelming supported Obama in the 2008 election.

Prohibiting immigrants from participating in the exchange is not a point Baucus can easily concede. He is following the lead of the White House. Obama declared in a speech to Congress: “the reforms I’m proposing would not apply to those who are here illegally.”

One Democratic aide said it would be difficult for Menendez to win the inclusion of illegal immigrants into the insurance exchange. But Menendez may have more success increasing subsidies for those mixed families that include illegal immigrants.

Under Baucus’s plan, a family that includes illegal immigrants would receive lower subsidies than those without but earning the same income.

For example, the plan would count the income of illegal immigrants in a family when assessing how much federal aid a family could receive; families with higher incomes receive lower subsidies. But the illegal immigrants in a family would not be eligible for healthcare subsidies, even though their income would be counted to determine the level of federal aid to the family.