DACA Grantees Can Now Access Marketplace Coverage

The U.S. Department of Health and Human Services (HHS) recently finalized a rule that will allow Deferred Action for Childhood Arrivals (DACA) grantees to access Marketplace coverage starting in November. Under the new rules, DACA grantees will be able to purchase qualified health plans (QHPs) in the Marketplaces and receive financial help in the form of advance premium tax credits (APTCs) and cost-sharing reductions, with coverage taking effect as soon as December 1, 2024. The rule will also allow DACA grantees to enroll in Basic Health Programs (BHP) if offered in their state (only MN and NY to date).

This is welcome news – the Centers for Medicare & Medicaid Services (CMS) estimates that 100,000 uninsured DACA grantees will gain coverage as a result. It also means that DACA grantees will now be treated the same as other individuals granted deferred action status with respect to Marketplace and BHP eligibility, whereas they have been singled out and prevented from accessing such coverage up until this point, even if they wanted to use their own money to buy unsubsidized coverage.

Unfortunately, the final rule does not extend to Medicaid and the Children’s Health Insurance Program (CHIP) as was proposed. Under the proposed rule, DACA grantees who are children and pregnant would have become eligible for Medicaid/CHIP in states that have adopted the Immigrant Children’s Health Improvement Act (ICHIA)/Children’s Health Insurance Program Reauthorization Act (CHIPRA) 214 option to cover those populations when lawfully residing in the US, including those within their first five years of having certain legal status (i.e., lifting the five-year bar). Admittedly, the proposed rule would have had a small impact when it comes to children – most DACA grantees are adults now. But it would have been a new source of affordable, prenatal and postpartum coverage for pregnant DACA grantees in just over half of states, with a median income eligibility for pregnancy coverage of about 214% of the federal poverty level (FPL) (across the states that have adopted the ICHIA option as of 2023). Instead, those DACA grantees with family income in the Medicaid eligibility income range, unlike other lawfully present individuals, will only be able to enroll in Marketplace coverage with subsidies, an inferior coverage option.

There’s another unfortunate side effect of the decision to only finalize the Marketplace and BHP changes at this time – it worsens the already byzantine eligibility rules for immigrants. Under current law, DACA grantees are treated the same for Medicaid, CHIP, Marketplace and BHP coverage – they are universally excluded. Beginning in November, DACA grantees will finally be included in Marketplace and BHP coverage, but they will continue to be excluded from Medicaid/CHIP. States that have unified eligibility systems will have to accommodate two different definitions.

While I am pleased that the new rule amends the definition of “lawfully present” to include DACA grantees for Marketplace/BHP coverage as of November 1, 2024, failing to finalize the same change for Medicaid/CHIP means that instead of eliminating some layers of complexity (by removing the DACA exception and increasing consistency of rules for lawfully present people with deferred status), the rule is adding to the chaos by creating yet another inconsistent policy. But, the final rule issued on May 8th doesn’t have to be the final answer. CMS has indicated that “the rulemaking process with regard to [the Medicaid and CHIP] portion of the proposal is ongoing,” so CMS may finalize the Medicaid/CHIP provisions in the future. Here’s hoping they do.

Kelly Whitener is an Associate Professor of the Practice at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.