The Impact of Public Health Insurance on Medical Utilization in a Vulnerable Population - Evidence from COFA Migrants - Working Paper No. 19-5

Sep 19, 2026

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In March 2015, Hawaii stopped covering migrants from countries under the Compact of Free Association (COFA) through Medicaid, requiring these migrants to obtain private insurance through Affordable Care Act exchanges. Using statewide administrative hospital discharge data, the study finds Medicaid-funded hospitalizations and emergency room visits fell by 69% and 42% after Medicaid eligibility ended. Private-insurance utilization increased but did not offset declines in publicly funded care, yielding a net reduction in overall utilization. The paper also reports higher Medicaid-funded infant ER visits consistent with substitution toward emergency care for very young children.

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Abstract

Key words and JEL Codes

I. Introduction

| | | | | | --- | --- | --- | --- | | | | University of Hawai`i at Mānoa Department of Economics Working Paper Series
Saunders Hall 542, 2424 Maile Way,
Honolulu, HI 96822 Phone: (808) 956-8496 [www.economics.hawaii.edu](www.economics.hawaii.edu) | | | | Working Paper No. 19-5
The Impact of Public Health Insurance on Medical Utilization in a Vulnerable Population: Evidence from
COFA Migrants
By Timothy J Halliday
Tetine Sentell
Megan Inada Randall Q. Akee
Victoria Y. Fan
Jill Miyamura
February 2019 | | | | | | | | The Impact of Public Health Insurance on Medical Utilization in a Vulnerable Population: Evidence from COFA Migrants Timothy J. Halliday+ University of Hawaii at Manoa UHERO, IZA Tetine Sentell University of Hawaii at Manoa Randall Q. Akee Brookings Institution and UCLA (on-leave) IZA, NBER Victoria Y. Fan University of Hawaii at Manoa Center for Global Development Megan Inada Kokua Kalihi Valley Comprehensive Family Services Jill Miyamura Hawaii Health Information Corporation February 21, 2019 Abstract In March of 2015, the State of Hawaii stopped covering migrants from countries belonging to the Compact of Free Association (COFA) in the state Medicaid program, forcing COFA migrants to obtain private insurance in health insurance exchanges established under the Affordable Care Act. Using statewide administrative hospital discharge data, we show that Medicaid-funded hospitalizations and emergency room visits declined in this population by 69% and 42% after the expiration of Medicaid eligibility. Utilization funded by private insurance did increase but not enough to offset the declines in publicly-funded utilization. This resulted in a net decrease in utilization. Paradoxically, we also find a substantial increase in Medicaid-funded ER visits by infants after the expiration of benefits which is consistent with a substitution of ER visits for ambulatory care for the very young. Key words: Immigration, Health Insurance, Cost Sharing, Medicaid, Insurance Exchange JEL Codes: I10, I14, J61 + Corresponding Author. 2424 Maile Way, Saunders Hall Room 533, Honolulu, HI 96822. E-mail: [halliday@hawaii.edu](halliday@hawaii.edu. We)[. We](halliday@hawaii.edu. We) thank the University of Hawaii Economic Research Organization for providing funding to purchase data from the Hawaii Health Information Corporation. We would also like to thank Marianne Bitler, Carl Bonham, Patrick Button, David Card, Lester Lusher, Gregory Maskarinec, Teresa Molina, and Seiji Yamada for useful comments and discussions. We also acknowledge seminar participants at the University of Hawaii Applied Micro Workshop and the NBER Workshop on the Economics of Indigenous Peoples and Institutions. All errors are our own. I. Introduction A principal question in health economics is how insurance coverage affects the demand for health services. Those that lack financial resources are often those most in need of medical services, and, in the absence of adequate insurance, low-income populations may forgo necessary medical care. These concerns have been a driving force for the expansion of government-provided or government-subsidized health insurance in many countries around the world, including the United States. The Affordable Care Act (ACA) of 2010 established subsidies for low-income households to purchase private insurance in marketplaces and incentives for states to expand coverage in their Medicaid programs. As a consequence of the ACA, the percentage of uninsured people in the United States decreased by 41%, a reduction from 48 to 28 million between 2011 and 2015 (Cohen et al, 2017) . Importantly, the ACA had the largest impacts on the poor and on minorities (Cohen et al, 2017) . At a time when the United States was expanding insurance coverage for its poorest citizens, the State of Hawaii reduced coverage for a small, but vulnerable, portion of its population. Until March of 20

FAQs

What policy change affected COFA migrants in Hawaii in 2015?

In March 2015, Hawaii stopped covering COFA migrants under the state Medicaid program, forcing them to obtain private insurance through ACA insurance exchanges.

How did utilization change after Medicaid eligibility expired?

Medicaid-funded hospitalizations declined by 69% and Medicaid-funded emergency room visits declined by 42% after eligibility expired. Private-insurance utilization rose but not enough to offset these public declines, leading to a net decrease in overall utilization.

What did the study find about infant Medicaid-funded ER visits?

The study found a substantial increase in Medicaid-funded ER visits by infants after benefits expired, consistent with substitution of ER visits for ambulatory care among very young children.

Sep 19, 2026

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