While the Centers for Medicare & Medicaid Services (CMS) announced a final rule in May 2024 increasing access to affordable health care options for recipients of the Deferred Action for Childhood Arrivals (DACA) program, Dreamers in 19 states cannot currently access marketplace coverage.
In the final rule, CMS modified the “lawfully present” definition used to determine eligibility for health plans in the marketplace, expanding health insurance eligibility for DACA recipients. The changes were slated to take effect November 1, 2024, across the United States; however, a recent lawsuit in the federal court system indefinitely postponed ACA expansion to DACA recipients in 19 states.
Here are the details.
What Is a DACA Recipient?
The DACA program was created under the Obama administration in 2012 as a way for undocumented immigrants who arrived in the United States as children to avoid deportation and gain access to select government programs. They created this program after the Development, Relief and Education for Alien Minors (DREAM) Act did not pass in Congress to safeguard children who did not make the choice to immigrate to the U.S. legally.
The young people impacted by DACA and the DREAM Act are often referred to as “Dreamers.” Individuals who are eligible for DACA:
- Were born after June 16, 1981
- Entered the United States unlawfully before their 16th birthday
- Have lived in the United States since June 15, 2007
- Were physically present in America on June 15, 2012, and at the time for making their request for deferred action
- Have no lawful status
- Have completed high school or a GED program, were honorably discharged from the armed forces, or are enrolled in school
- Have not been convicted of a felony or misdemeanor and do not pose a threat to national security
Within the DACA program, there isn’t a path to citizenship, and DACA status is not the same as a green card. DACA recipients have a Social Security number, can apply for a work permit, and a driver’s license. They can renew their status every two years and continue receiving benefits while not worrying about deportation.
There are 537,730 Dreamers as of December 2024, according to Migration Policy Institute. However, more than 1,160,000 people are eligible for DACA.
DACA recipients are protected against incurring an unlawful presence status, which can allow them to access other paths of legal immigration and can allow them to obtain health care services and education in the U.S.
New Modified Definition of Lawfully Present Status
With the final rule published in May 2024, CMS changed the definition of lawfully present status to allow DACA recipients to enroll in a qualified health plan (QHP) through the marketplace or a Basic Health Program (BHP). Previously, Dreamers were able to enroll in an employer’s health insurance plan but were not eligible for the marketplace, Medicaid, or BHPs. DACA recipients will continue to be ineligible for Medicaid.
The lawfully present status allows DACA recipients to enroll in a qualified health plan through the marketplace or a Basic Health Program.
The revised definition of lawfully present and eligibility for marketplace coverage, also made DACA recipients eligible for cost-sharing reductions to reduce health care spending.
At the time, CMS estimated that 100,000 previously uninsured DACA recipients would be able to enroll in health coverage through the marketplace as a result of the change. Due to ongoing litigation in the federal courts system, some DACA recipients’ dreams for affordable health care may not become a reality for all.
Dreamers Blocked From Enrolling in 19 States
In August 2024, a group of 19 states filed a lawsuit against the federal government, claiming that the decision to extend marketplace coverage to DACA recipients violates their state rights. A federal court in North Dakota granted the motion on December 9, 2024, blocking the expansion to cover Dreamers in the 19 states that filed the lawsuit. While the Biden Administration sought a stay of the ruling pending an appeal of the decision and secured a temporary stay in December 16, the court ultimately denied the motion.
As of this post’s publish date, DACA recipients in Alabama, Arkansas, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Texas, and Virginia are not eligible to enroll in an ACA plan. It’s unknown whether President Trump will pass legislation that will block Dreamers from the marketplace in other states. We will continue to monitor the situation and provide updates.
Source: Kiplinger, “Over 162,000 Dreamers Cut Off From Affordable Care Act Insurance”
Can Dreamers Enroll in Marketplace Coverage?
DACA recipients who do not reside in the 19 states involved in the lawsuit and meet all other eligibility requirements for marketplace coverage can enroll in a plan during the Open Enrollment Period (OEP), which starts November 1, or during a valid Special Enrollment Period (SEP). Individuals residing in the 19 states participating in the lawsuit mentioned above cannot currently enroll in marketplace coverage. Unable to access any federally funded health care coverage, their only options remain private health insurance plans offered through an employer or purchased independently.
Clients that have enrolled through the marketplace and reside in one of the affected states will be asked to attest to marketplace eligibility, just like every ACA enrollment. They should not certify that they have eligible immigration status, according to HealthCare.gov. The federal marketplace canceled affected enrollments that were already completed. Any premiums that have been paid will be refunded.
Sixteen of the 19 states in the lawsuit participate in the federal exchange. Idaho, Kentucky, and Virginia operate their own exchanges and are following the guidelines established by the federal exchange.
It’s important that agents are aware of individuals whose eligibility for a marketplace plan has changed and reach out to them before the OEP. We encourage you to educate your community about the opportunities for health insurance.
The CMS rule that expanded health insurance eligibility for DACA recipients intended to allow more individuals to access affordable health care and enroll in marketplace coverage this year and beyond. However, recent litigation may cause a roadblock for some clients.
To learn more about the CMS final rule that modifies lawfully present status, you can read the CMS fact sheet or read the full final rule.
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