Apr, 28, 2023

HHS Proposes to Make Certain DACA Recipients Eligible for Marketplace Subsidies, Medicaid, and BHPs

Patricia Boozang and Julian Polaris, Manatt Health

On April 26, the United States Department of Health and Human Services (HHS) published a proposed rule aimed at expanding health coverage options for certain recipients of Deferred Action for Childhood Arrivals (DACA) status, a program established under the Obama administration that enables access to certain public benefits for so-called Dreamers—undocumented individuals who were brought to the United States as children and who meet certain other eligibility criteria. This proposed rule was previewed in an April 13 Fact Sheet.

The proposed rule would add DACA recipients to the list of “lawfully present” immigrants—a list that already includes immigrants with forms of “deferred action” other than DACA—who can receive three types of federally supported health coverage:

  • Marketplace subsidies for the purchase of qualified health plans, as well as cost sharing reductions.
  • Medicaid coverage for DACA recipients who are children or pregnant people, but only in the states that have elected to extend Medicaid coverage to “lawfully residing” children and/or pregnant people under the “CHIPRA 214” option [so called because this option was established in section 214 of the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA)]. As of January 1, 2023, 35 states provide this form of coverage to children, and 26 to pregnant people.
    • Some states have already extended Medicaid-like coverage to undocumented children and/or pregnant people using state-only funds; under the proposed rule, those states would be able to start claiming federal Medicaid funding for DACA recipients who meet other program eligibility rules (but not for other individuals who are undocumented).
    • As currently proposed, this rule would not create a pathway to federally financed Medicaid coverage for DACA recipients other than children or pregnant people.
  • Basic Health Plan (BHP) coverage in states that have adopted a BHP, an option established under the Affordable Care Act through which states may fund privately administered coverage to individuals with incomes between 138% and 200% of the of the federal poverty level. Currently, Minnesota and New York are the only states with BHPs.


HHS notes a recent survey finding that approximately a third of DACA recipients are uninsured, and estimates that 129,000 DACA recipients would be able to enroll in coverage under the proposed rule, comprised of 112,000 new Marketplace plan enrollees, 13,000 new Medicaid enrollees, and 4,000 new BHP enrollees.

The Centers for Medicare & Medicaid Services (CMS) has proposed an effective date of November 1, 2023 for these changes, with the aim of allowing DACA recipients to participate in the upcoming Marketplace open enrollment season (although CMS noted that, if the rule is not finalized in time for open enrollment, DACA recipients may nonetheless qualify for a special enrollment period). CMS seeks comment on the effective date proposed and related implementation barriers, acknowledging that states are facing workforce and IT system constraints related to “unwinding” of the federal Medicaid continuous coverage requirement.

Public comments on the proposed rule are due by June 23, 2023.