Less than a year after “Dreamers” were granted access to California’s health insurance, undocumented immigrants who came to the U.S. as children are facing a loss of medical coverage.
In California, about 2,300 Dreamers will need to secure new health insurance as their coverage will end at the end of this month, following a decision from the Federal Centers for Medicare and Medicaid Services, the governing body for the insurance market.
Previously, under the Biden administration, the criteria for being “legally present” within the Affordable Care Act was updated, allowing DACA recipients—often referred to as Dreamers—to purchase insurance through state and federal marketplaces. However, this was reversed by the Trump administration in June, a decision that was set to take effect shortly thereafter.
The stated purpose of the new policy was to “stabilize the risk pool, lower premiums, and enhance healthcare affordability and access,” as noted in an agency announcement.
Recently, California officials indicated they are working to inform all DACA recipients that their last day of coverage is August 31 and that assistance will be provided to explore alternative insurance options.
Historically, the Affordable Care Act has barred undocumented immigrants from buying health insurance from the market, with DACA recipients being a notable exception since they can work legally in the U.S. under the program initiated in 2012.
“I was hoping for a different outcome.”
Some community members expressed their disappointment, stating, “This decision is really unfair to dedicated taxpayers in California who believed they would have health insurance in 2025. We wish for a better outcome regarding DACA recipients, yet we have to comply with federal law.”
With the elimination from the insurance market, Dreamers will now need to rely on coverage through their employers, or, if their income qualifies, they might be able to turn to Medi-Cal, California’s health insurance program for low-income individuals. For freelancers or self-employed Dreamers, it can be a tough situation where they earn too much to qualify for Medi-Cal but cannot afford full insurance costs.
Signing up for insurance through eligible California providers has perks, like access to financial assistance. It’s estimated that broadening coverage to DACA recipients across the nation would cost the federal government between $240 million and $300 million annually.
Impact on the market
The federal government argues that these cuts will help stabilize the insurance risk pool and decrease premiums, yet some experts fear this will particularly disadvantage younger demographics. The loss of younger, healthier individuals tends to lead to higher premiums for everyone, as their lower-cost coverage helps offset the expenses linked to older or less healthy individuals.
According to Arturo Vargas Bustamante, a professor at UCLA’s School of Public Health, “When fewer young people enroll, costs typically rise for others who need coverage.” This situation puts further strain on those with health issues who rely on insurance.
Established for over 13 years, the DACA program does not confer legal status but offers some protection from deportation and allows for work authorization. It’s estimated that California is home to over 150,000 DACA recipients.
President Biden’s attempt to secure DACA recipients’ access to the insurance market has faced opposition, notably from a coalition of 19 Republican Attorney Generals who filed a lawsuit aimed at halting the expansion of insurance options for DACA recipients. A federal judge in North Dakota ruled in favor of the plaintiffs, temporarily blocking the implementation of new rules in those states, although the federal regulations are still applicable nationwide.
These DACA recipients are just the first group among many immigrants expected to lose their market coverage soon. Recently, the federal government also announced plans to eliminate financial support for legally present immigrant groups—including refugees—starting in 2027, which could further impact those needing assistance with costs.
In California, it is anticipated that those who continue to enroll in eligible plans may see their monthly premiums increase by an additional $101 next year.
