Biden Administration Releases New Rule to Help Dreamers Access Affordable Health Insurance

Last week, the Biden administration issued a final rule that will dramatically improve health insurance coverage for young adult “Dreamers” — that is, people who came to the United States as children and are protected against deportation by the Deferred Action for Childhood Arrivals (DACA) program. Dreamers can work in the U.S. but lack legal residency status or a pathway to citizenship. As a result, they have been ineligible for publicly funded health insurance coverage. Of the 580,000 active DACA recipients, more than a quarter lack health insurance coverage; most who do have coverage get it through their employers.

The final rule amends the definition of “lawfully present” immigrants to allow DACA recipients to be eligible for insurance coverage through the Affordable Care Act (ACA) marketplaces and the Basic Health Program (BHP), a coverage option for low-income people in Minnesota, New York, and Oregon (as of July 2024). The rule will go into effect in November 2024 and enables DACA recipients to apply for the 2025 marketplace open-enrollment period. The Centers for Medicare and Medicaid Services (CMS) projects that about 100,000 previously uninsured Dreamers will gain coverage next year as a result.

This is an important step forward for immigrant health. Using data from the 2022 Commonwealth Fund Biennial Health Insurance Survey, we examine why this new pathway to coverage is so important for Dreamers and why efforts to extend immigrant coverage should remain a policy priority.

Foreign-Born Young Adults Are Uninsured for Extended Periods of Time

We used data on foreign-born young adults, ages 19 to 34, as a proxy for DACA recipients and compared coverage patterns to young adults born in the U.S. We found that almost two-thirds of foreign-born young adults who were uninsured or had experienced a coverage gap had been uninsured for a year or longer. This is nearly 20 percentage points higher than the rate of U.S.-born young adults.

Foreign-Born Young Adults Take Up Offers of Employer Coverage at High Rates

Currently, most Dreamers with health insurance are covered by employers. The vast majority — 91 percent — are employed. Our data indicate that about 70 percent of foreign-born young adults work for employers that offer health coverage, compared to 77 percent of U.S.-born young adults that do. About two-thirds of foreign-born young adults are eligible for their employer’s coverage, about the same as their U.S.-born counterparts. But foreign-born young adults take up that coverage at higher rates (83% vs. 70%), likely due to a lack of other options, like a parent’s policy or Medicaid. Thirty percent of foreign-born young adults work for employers that don’t offer coverage and are uninsured at nearly twice the rate of U.S.-born working young adults (21% vs. 11%).

New Paths to Coverage for Dreamers

The new rule comes on the heels of several state-based efforts to improve undocumented immigrants’ access to health care. More than 5 million uninsured people miss out on subsidized coverage due to their legal status and ineligibility for employer-based insurance. Compared to legally present immigrants, undocumented immigrants are more likely to report that the emergency room is their only source of health care and that they skipped or postponed care in the past year.

Under current regulations, “lawfully present” immigrants may be eligible for coverage through Medicaid and the Children’s Health Insurance Program if they meet criteria and complete a five-year waiting period after attaining permanent residency status. They also may enroll in subsidized coverage through the ACA marketplaces while in the waiting period for Medicaid. Undocumented immigrants only have access to employer coverage or unsubsidized coverage outside the marketplaces, which is prohibitively expensive for most.

Several states are using state funding to expand coverage to their undocumented residents through Medicaid and their state-based marketplaces. California and Oregon, for example, now provide Medicaid for all residents meeting income eligibility thresholds regardless of immigration status. This year, New York expanded Medicaid eligibility to undocumented immigrants over age 65. Colorado and Washington State are providing premium support for low-income undocumented immigrants to purchase coverage through the marketplaces. Minnesota plans to extend coverage to more undocumented immigrants through its BHP in 2025.

The administration’s finalized rule for Dreamers, as well as the state reforms described above, are important steps in ensuring all U.S. residents have affordable access to the health care they need to lead healthy and productive lives.