If immigrant parents face higher transactions costs of enrolling in Medicaid, and different opportunities in the market for private health insurance, then their responses to becoming eligible for Medicaid are likely to differ from those of native-born parents. This prediction is tested using data about health insurance coverage and the utilization of medical care from the U.S. National Health Interview Survey. The results suggest that focusing on coverage alone will produce misleading assessments of the costs and benefits of expanding Medicaid eligibility for immigrants since among immigrants, eligibility increases utilization of basic services without affecting coverage. Second, the marginal cost of the additional medical services consumed by eligible immigrant children is small. However, the infra-marginal costs of expanding Medicald eligibility to immigrants may be quite large, because as much as a quarter of the cost of providing infra-marginal services is shifted from private to public insurers.
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