Skip to main content

Asian American Policy Review

Topic / Social Policy

Medicaid Parity for Pacific Migrant Populations in the United States


Under the Compact of Free Association (COFA), citizens from Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands—also known as COFA migrants—are granted broad migration rights in exchange for providing the United States the use of and access to strategic military defense positioning in the Pacific. For many years, these citizens have lived and worked in cooperation with the U.S. military even as their health was being detrimentally impacted by exposure to nuclear weaponry. Unfortunately, in the passage of the Personal Responsibility and Work Opportunity Act in 1996, COFA migrants were stripped of their eligibility for most federal benefits, including Medicaid. In the aftermath of this decision, some states continued to provide health care to COFA migrants using state funds, however, the current fiscal crisis is forcing many states to reduce funding for these efforts, putting the health of this population at risk. It is the responsibility of the federal government to honor the terms of the Compact by restoring eligibility to Medicaid for COFA migrants.


This article aims to provide an in-depth analysis on the health care options for migrants from the Freely Associated States (FAS)—which includes the Republic of Palau, the Federated States of Micronesia (FSM), and the Republic of the Marshall Islands (RMI)—who currently reside in the United States and its territories. The analysis will include a brief background on the Compact of Free Association (COFA; the Compact), a unique agreement that established the working relationship between the United States and the FAS countries. It will also provide a history of the major events leading up to today’s current immigration status of more than 56,000 FAS citizens residing in the United States, commonly referred to as COFA migrants.[1] Ultimately, this article highlights the need for responsible policy reform to restore access to entitlement programs previously afforded to COFA migrants before the changes to eligibility under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996.[2]

Historical and Demographic Background

The Trust Territories of the Pacific Islands

Micronesia is a region in the Pacific Ocean comprising independent island nations that share a cultural and ethnic identity. East of the Philippines and north of Papua New Guinea, islands in Micronesia have a long history of foreign occupation and colonial administration. As early as the seventeenth century, Spanish, German, Japanese, American, and British international agreements decided the ownership and territorial boundaries of the region with little regard for its native population and traditional claims to the land. After World War II, the islands that make up modern-day Palau, the Commonwealth of the Northern Mariana Islands (CNMI), the Republic of the Marshall Islands, and the Federated States of Micronesia were taken from Japanese control and organized as the Trust Territory of the Pacific by the United Nations and placed under U.S. administrative authority. The Trust Territory specifically included Yap, Pohnpei, and Chuuk from the FSM; Koror from Palau; Majuro from the Marshall Islands; and Saipan from the CNMI, which served as the capital of the Trust Territory. The Trust Territory was officially organized in 1947 and included the Pacific Proving Grounds, an area spanning the Micronesian region in the Pacific used for nuclear testing from 1947 to 1962. U.S. administrative jurisdiction ended in 1990, after the independence of the RMI and the FSM in 1986 and Palau in 1994.

Compacts of Free Association[3]

After U.S. administration of the Trust Territory ended, a new relationship between the United States and the newly independent nations of Palau, the RMI, and the FSM developed. In 1986, the United States negotiated an agreement of free association with Palau, the RMI, and the FSM: these island nations make up the Freely Associated States as outlined in the Compact. The agreement outlined economic assistance for the FAS in exchange for exclusive U.S. defensive use and other operating rights in the islands, including the denial of regional access by other nations, making these islands strategically significant to U.S. military positioning in the Pacific.

There are several provisions within the Compact that provide support to the FAS governments and their citizens. Perhaps the most important are the immigration and economic provisions. The immigration provision allows most citizens from the FAS to reside and work in the United States without a visa for an indefinite amount of time.[4] This provision has given citizens of the FAS employment opportunities that are not available in the islands. The economic provision provides for various sector grants, or financial payments, to the governments of the FAS for health care, education, public infrastructure, economic development, and environmental protection. These grants have been crucial for cleaning up the aftermath of post-WWII nuclear fallout from the U.S. nuclear tests in the region and for providing a basic health care infrastructure in the islands.[5] A joint committee determines the annual grant amounts, which vary among the FAS countries and decrease in value every five years.[6]

In 2003, due to the increase in migration from the FAS to the United States, the Compact was amended to include $30 million annually for twenty years in “Compact Impact funds” to “affected jurisdictions”—namely the state and territories that saw the greatest increase in COFA migration. The affected jurisdictions authorized to receive Compact Impact funds are American Samoa, the CNMI, Guam, and Hawaii.[7] Each of these designated impacted jurisdictions receives an amount of the Compact Impact funds dependent upon the size of the COFA migrant population within its care. For example, Guam, with a resident population of 18,305 COFA migrants and the highest population of all of the affected jurisdictions, has received $102 million in impact funds to support education, health, social, and public safety service costs associated with increased migration from the FAS.[8] Together, Guam, the CNMI, and Hawaii estimated educational services at $517 million, health services at $313 million, public safety at $81 million, and social services at $98 million for fiscal years 2004 through 2010. Yet, the estimated cost on affected jurisdictions for services associated with increased migration from the FAS for this time frame totaled $1 billion, far exceeding the $210 million initially allocated.

COFA Migrants in the United States

According to the U.S. Census Bureau’s 2005-2009 American Community Survey (ACS), an estimated 57.6 percent of all COFA migrants live in the affected jurisdictions of the CNMI, Guam, and Hawaii, with 32.5 percent in Guam, 21.4 percent in Hawaii, and 3.7 percent in the CNMI. Ten mainland states have COFA migrant populations of 1,000 or more: Arizona, Arkansas, California, Florida, Hawaii, Missouri, Oklahoma, Oregon, Utah, and Washington.[9]

People from the RMI, the FSM, and the Republic of Palau have had a long and complicated history with the international community. Residents of these island nations have seen their national identity change three times within the last one hundred years.[10] As discussed above, most citizens from the FAS enjoy unrestricted travel to and from the United States and have indefinite work authorization in the country. Yet, even before the Compact, many individuals from the Trust Territory of the Pacific Islands moved abroad to attend college in the United States. In 1986, the first wave of COFA migrants left their home nations and traveled to Guam and the CNMI. Both territories were popular with COFA migrants due to their proximity to the FAS islands and because they offered many previously unavailable opportunities. Migration to Guam and the CNMI increased steadily until 1990, when migration shifted to Hawaii. One of the “pull” factors was the high quality of health care offered in Hawaii that was often lacking in Guam and the CNMI. Citizens of the FAS were also sought out by factory owners and the agriculture industry to fill Hawaii’s low-skill labor force.

Migration to the U.S. mainland did not gain popularity until 1999, with the targeted recruitment of COFA migrants to the agricultural, elderly care, and hospitality industries.[11] Word-of-mouth accounts of job opportunities also contributed to the formation of COFA communities in the mainland. The growth of the Marshallese community in Arkansas is an example of this typical migration pattern. Roughly 4,300 COFA migrants from the Republic of the Marshall Islands living in Springdale, Arkansas, can trace their roots to John Moody. In 1979, John Moody arrived in Arkansas as a student on a scholarship and later started working at the Tyson Poultry Plant. He reported back to friends in the Marshall Islands about the work opportunities in Springdale, which is now home to one of the largest communities of COFA migrants in the continental United States.[12] Arkansas has welcomed this new migrant community by providing public service information for newly arriving Marshallese individuals and families to help navigate their settlement in various areas of Arkansas.[13]

Today, more economic opportunities and better medical care continue to attract many citizens of the FAS to make the expensive journey to the United States and its jurisdictions. The annual income for many COFA migrants increases gradually as they move west to east. For example, the average annual household income in the CNMI is $25,450; Guam, $24,800; Hawaii, $42,150; and the U.S. mainland, $62,800. The per capita income for the CNMI is $5,000; Guam, $4,600; Hawaii, $10,500; and the U.S. mainland, $15,700.[14] Greater economic opportunity in the United States also reinforces the ability to care for family members in the islands. One survey found the average annual remittance sent back to the islands from the U.S. mainland to be $2,320 for the FSM; $1,081 for Hawaii; $450 for Guam; and $250 for the CNMI.[15]

Health Care Options for COFA Migrants


Prior to 1996, low-income COFA migrants and other lawfully residing immigrants were largely treated the same as citizens in terms of Medicaid eligibility. However, Medicaid eligibility changed dramatically for immigrants and noncitizens with the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, also known as welfare reform. PRWORA created two new categories of eligibility for immigrants and noncitizens: “qualified aliens” with a statutorily enumerated list of immigrants, and “not qualified aliens.” The list of qualified immigrants is limited to the following:

1. Lawful permanent residents (i.e., green card holders)

2. Refugees, persons granted asylum or withholding of deportation/removal, and conditional entrants

3. Persons granted parole by the Department of Homeland Security for a period of at least one year

4. Cuban and Haitian entrants

5. Certain abused immigrants, their children, and/or parents

6. Certain victims of trafficking

Congress did not include COFA migrants on the list of enumerated qualified immigrants, and therefore, COFA migrants were deemed “not qualified.” This meant that many COFA migrants who had been able to get care through the Medicaid program now found themselves unable to access affordable care.[16]

In the aftermath of PRWORA, some states continued to provide Medicaid coverage to their immigrant and noncitizen residents, including COFA migrants, through state-funded programs. Approximately half of the states use their own dollars to provide Medicaid to some or all immigrants who would otherwise be subject to the five-year bar, a five-year residency requirement for lawfully residing immigrants to meet in order to be eligible for federal public assistance programs.

According to recent ACS data, ten states have a population of 1,000 or more COFA migrants, namely Arizona, Arkansas, California, Florida, Hawaii, Missouri, Oklahoma, Oregon, Utah, and Washington.[17] Appendix 1 illustrates these individual state’s  Medicaid coverage expansion categories applying to “legally residing” COFA migrants (see Appendix 1).[18]

The Children’s Health Insurance Plan

The 2009 reauthorization of the Children’s Health Insurance Program (CHIP) expanded immigrant eligibility by giving states the option to provide federally funded Medicaid and CHIP to children and/or pregnant women who are “lawfully residing in the United States.” The definition of “lawfully residing” was clarified in a July 2010 letter from the Centers for Medicare & Medicaid Services (CMS) to state health officials: “An alien in nonimmigrant status who has not violated the terms of the status under which he or she was admitted or to which he or she has changed after admission.”[19] COFA migrants fall under this category and therefore meet the definition of lawfully residing for the purposes of coverage under CHIP.

Employer Coverage

Like other workers in the United States, COFA migrants are able to participate in employer-based health care plans if one is offered by their employer. However, even when these plans are offered at little to no cost for the employee, they may not cover the employee’s dependents or the employee’s contribution for dependent coverage may be too high, forcing workers to opt out of coverage for family members.

According to a recent analysis conducted by the Asian & Pacific Islander American Health Forum (APIAHF), 58.4 percent of single race–identified Native Hawaiians or Pacific Islanders from ages 27 to 64 were privately insured.[20] Many, if not all, of these individuals were covered under an employer’s benefits package. For example, as a leading employer of COFA migrants in Springdale, Arkansas, Tyson Foods, Inc. offers a full health care benefits package to employees working in its production plants. As the health reform law is implemented, companies with one hundred or more employees will be required to provide health care to their workers or pay a penalty. Also, small businesses with up to fifty or one hundred employees, depending on the state, will be able to purchase health coverage for employees at a significantly reduced price, potentially covering an estimated 18 million small business employees, many of whom are COFA migrants.[21]

COFA Migrants Under the Affordable Care Act

Under the Affordable Care Act (ACA), citizens and individuals who are “lawfully present” are subject to the requirement to have health insurance coverage (otherwise known as the individual mandate) and are eligible for the new coverage options offered through the health insurance marketplace.[22] COFA migrants are eligible to participate in the marketplace since the definition of lawfully present includes individuals with “non-immigrant status.”[23] Additionally, COFA migrants who meet the income thresholds may also be eligible for financial assistance to help pay for a health care plan.[24]

Since COFA migrants are eligible to participate in the health insurance marketplace, they are also subject to the “individual mandate,” a provision in the ACA that requires all citizens and lawfully present individuals to have health insurance. Therefore, COFA migrants that do not have health insurance will need to purchase a plan during the marketplace open enrollment period or pay a fine.

Yet, as previously explained, COFA migrants will not qualify for Medicaid and will not be given the option to enroll in Medicaid through the single streamlined application used to enroll in the marketplace. In addition, COFA migrants making less than 133 percent of the federal poverty level will not only be excluded from Medicaid, but will also not be eligible for premium assistance.[25]

Legislative Efforts to Restore Medicaid Coverage

The Importance of Medicaid

Over the past seventeen years, approximately sixteen bills have been introduced in both chambers of the U.S. Congress to restore Medicaid eligibility to COFA migrants (see Appendix 2). Many citizens of the FAS come to the United States in search of medical services, including cancer treatments and dialysis, which are largely unavailable in the affected jurisdictions.[26] However, because COFA migrants are ineligible for Medicaid, many providers are not reimbursed for the costly care required by some COFA migrants. The Government Accountability Office calculates that between 2004 and 2010, COFA migrant–related health services in Guam, the CNMI, and Hawaii added up to $313,963,456. Officials in Hawaii and Guam argue that restoring Medicaid eligibility to COFA migrants will assist in reducing this cost burden on state and territory budgets.[27]

It is worth noting that the Medicaid programs operate differently in the U.S. territories, with these programs being administered similar to a block grant. These Medicaid caps are statutorily set into law, which, coupled with the lowest set Federal Medical Assistance Percentages rate, have continued to add to the disparities faced by COFA migrants in the U.S. territories.


In 1986, Congress expressed that it did not intend for the Compact of Free Association to have adverse effects on the U.S. territories or its states. Furthermore, Congress stated that it would act sympathetically to address impacts from increased migration to affected areas by authorizing compensation to offset any resulting adverse consequences.[28]

COFA migrants have a long and mutually beneficial relationship with the United States. They come to the country seeking opportunity to provide for their families while contributing to our economy. COFA migrants pay into the system and contribute to local economies through taxes and government fees. They work in low-paying blue-collar jobs that contribute to our national economic output and gross domestic product.

Congress now has the opportunity to make good on its promise to COFA migrants and the affected jurisdictions. By restoring Medicaid to this historically disenfranchised population, it will help to ensure that COFA migrants finally have the same opportunity to access quality care and affordable health service that are available to other legal residents.

COFA migrants are eligible for several federal benefits, including emergency Medicaid. It is inhumane and financially irresponsible to force an individual to go without health care until it is an emergency. It is also more costly to the federal, state, and territorial governments to pay for an emergency service when less expensive preventive health care services are available.

Additionally, it is bad policy for the federal government to enter into an agreement with another country and expect for the U.S. territories and states to fulfill its obligations. After PRWORA, the affected jurisdictions and the states did their best to provide necessary care for the influx of migration from the FAS, but these efforts have been difficult in times of economic downturn.

For these reasons it is important that full Medicaid be restored to disenfranchised COFA migrants to fulfill the obligations of the federal government’s involvement in the Freely Associated States and to act sympathetically toward the adverse effects on the affected jurisdictions.

[1] United States Government Accountability Office (GAO). Compacts of Free Association: Improvements Needed to Assess and Address Growing Migration. GAO Report to Congressional Requesters, November 2011.

[2] The “qualified” and “not qualified” immigrant categories were created by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (also known as welfare reform). Pub. L. No. 104-193, 110 Stat. 2105, Aug. 22, 1996.

[3] It is important to note that there are two Compacts of Free Association. One is shared between the RMI, the FSM, and the United States. The other is between Palau and the United States. There are no significant differences between the two agreements, the term “Compact of Free Association” is used to express the Unites States’ relationship with all three countries that make up the Freely Associated States.

[4] Compact of Free Association Act of 1985. U.S. Public Law 99-239, Jan. 14, 1986, Article IV, Sec 141-142.

[5] Between 1947 and 1962, the United States government conducted seventy atmospheric nuclear ballistics tests in the Pacific Proving Grounds, a name given to a number of testing sites throughout the Marshall Islands and other nuclear testing sites in the Pacific. The citizens of these islands suffered through years of nuclear fallout without being evacuated. Many inhabitants of the region are still experiencing impacts of this fallout, with high rates of cancer and ecological degradation. See Johnson, Giff. “Micronesia: America’s ‘Strategic’ Trust.” Bulletin of the Atomic Scientists 35(2): 10, February 1979.

[6] Compact of Free Association Act of 1985. U.S. Public Law 99-239, Jan. 14, 1986, Title II, Article 1, Sec. 211.

[7] U.S. GAO. Compacts of Free Association: Guidelines Needed to Support Reliable Estimates of Cost Impacts of Growing Migration. GAO Statement for the Record to the Committee on Energy and Natural Resources, U.S. Senate, 11 July 2013.

[8] Ibid., 9.

[9] U.S. Census Bureau. The 2005-2009 ACS 5-Year Summary File Technical Documentation. U.S. Census Bureau, February 2011.

[10] From 1884 to 1914, the nations now known as the Freely Associated States, namely, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands were a part of the Imperial German Pacific Protectorates. After the First World War, administrative responsibility was transferred to Japan under the South Sea Mandate. Japan retained control over them until World War II when the administration of the islands transferred to the United States under the Trust Territory of the Pacific. The island nations remained under the administrative control of the United States until their independence in 1986. Their past status as a protectorate paved the way to the current Compact of Free Association agreement with the United States Government.

[11] Hezel, Francis X., and Michael J. Levin. Survey of Federated States of Micronesia Migrants in the United States including Guam and the Commonwealth of Northern Mariana Islands (CNMI). FSM National Government, March-July 2012, 8.

[12] Schulte, Bret. “For Pacific Islanders, Hopes and Troubles in Arkansas.” New York Times, 4 July 2012.

[13] “Living in Arkansas: What You Need to Know as a Marshallese” was a joint project conducted by the Gaps in Services to Marshallese Task Force and the Arkansas Minority Health Commission.

[14] Hezel and Levin, Survey of Federated States of Micronesia, 36.

[15] Ibid., 40.

[16] See footnote 2.

[17] U.S. Census Bureau, 2005-2009 ACS 5-Year Summary.

[18] National Immigration Law Center. Medical Assistance Programs for Immigrants in Various States. National Immigration Law Center, February 2014.

[19] The definition of “lawfully present” for ACA purposes was first defined by the Department of Health and Human Services (HHS) in July 2012 in a final rule governing eligibility for the ACA’s high-risk insurance pools (known as the Pre-Existing Condition Insurance Plans) and codified at 45 C.F.R. § 152.2. The definition largely mirrors the definition used in a July 2010 letter to Center for Medicare & Medicaid Services state health officials regarding Medicaid and CHIP coverage of “lawfully residing” children and pregnant women and was later codified in an HHS final rule on 15 July 2013 with some modifications.

[20] Asian & Pacific Islander American Health Forum (APIAHF). The Impact of Health Care Reform on Health Coverage for Asian Americans, Native Hawaiians and Pacific Islanders.” APIAHF, June 2012, 5.

[21] Ibid., 4.

[22] See, for example, section 1411(a)(1) of the ACA (eligibility for the health insurance “exchanges” and the related affordability tax credits).

[23] See footnote 19.

[24] To be eligible for the premium tax credit, an individual must meet the following criteria: be a citizen or lawfully present; have a family income between 100 and 400 percent of the federal poverty level; not have access to a qualified employer-sponsored health plan that provides minimum value (actuarial value of at least 60 percent) and that is affordable (does not cost you more than 9.5 percent of your income); not be eligible for Medicaid, CHIP, Medicare, or military coverage; use your tax credit to purchase insurance through an online, federally certified public health exchange. 26 CFR § 1.36B–1(g).

[25] The Henry J. Kaiser Family Foundation. “Explaining Health Care Reform: Questions About Health Insurance Subsidies.” Henry J. Kaiser Family Foundation Focus on Health Reform, July 2012.

[26] Before 2009, Hawaii allowed COFA migrants to participate in its comprehensive state health plan called QUEST. However, due to budgetary problems, Hawaii created a new plan specifically for COFA migrants called Basic Health Hawaii, which significantly reduced the health services afforded to COFA migrants. This has resulted in incomplete and inadequate care for those COFA migrants requiring the most critical care due to chronic diseases. See “Broken Promises, Shattered Lives: The Case for Justice for Micronesians in Hawaii.” Hawaii Appleseed Center for Law and Economic Justice Policy Brief, 17 November 2011.

[27] U.S. GAO, Compacts of Free Association: Improvements Needed to Assess and Address Growing Migration.

[28] U.S. GAO, Compacts of Free Association: Guidelines Needed to Support Reliable Estimates of Cost Impacts of Growing Migration