Biden Admin formally proposes DACA healthcare eligibility rule; up to 129K more Americans could gain coverage!

Two weeks ago, the Associated Press reported that the Biden Administration planned on opening up eligibility for ACA exchange, Basic Health Program, Medicaid & CHIP coverage to hundreds of thousands of Americans who have Deferred Action of Childhood Arrivals status:

President Joe Biden is set to announce that his administration is expanding eligibility for Medicaid and the Affordable Care Act’s health insurance exchanges to hundreds of thousands of immigrants brought to the U.S. illegally as children, according to two U.S. officials briefed on the matter.

The action will allow participants in the Obama-era Deferred Action for Childhood Arrivals program, or DACA, to access government-funded health insurance programs. The officials spoke on the condition of anonymity to discuss the matter before the formal announcement on Thursday.

The 2012 DACA initiative was meant to shield from deportation immigrants brought to the US. illegally by their parents as young children and to allow them to work legally in the country. However, the immigrants were still ineligible for government-subsidized health insurance programs because they did not meet the definition for having “lawful presence” in the U.S. That’s what Biden’s Department of Health and Human Services will aim to change by the end of the month.

As I noted at the time:

There's roughly 580,000 immigrants who have DACA status as of today. While all of them would presumably become eligible for ACA enrollment (and, therefore, federal ACA subsidies) via the change in their residency status, that doesn't mean 580K new ACA exchange enrollees. According to the Kaiser Family Foundation, around 39% of them are currently uninsured, or roughly ~230,000, give or take. The rest have other types of healthcare coverage just like most other Americans do.

Even among those ~230K, not all of them will necessarily qualify for financial subsidies as some may have too high an income, although I suspect that number will be minimal among this population. And of course some of them will become eligible for Medicaid instead. On the other hand, some of the other ~350K DACA recipients who are currently categorized as "insured" may have terrible coverage via short-term or other types of "junk" plans and thus may become eligible for ACA/Medicaid coverage as well.

The timeline on this change isn't certain--the AP article says that it would happen "by the end of the month" (late April) but I've also heard it could take up to six months (and there will likely be legal challenges which could potentially delay it further). Still, if it goes through reasonably smoothly, DACA recipients should be eligible to enroll in ACA exchange policies or Medicaid by this summer or fall, reducing the U.S. uninsured rate by several hundred thousand more people. That's the equivalent of a state the size of, say, Iowa or West Virginia expanding Medicaid in terms of potential coverage expansion.

Sure enough, the Centers for Medicare & Medicaid Services made it official this week:

HHS Releases Proposal to Expand Health Care for DACA Recipients

• DACA recipients would have access to health care through Affordable Care Act Marketplaces, Medicaid, and the Children’s Health Insurance Program

WASHINGTON, D.C. – The Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), today released a notice of proposed rulemaking (NPRM) that, if finalized, would expand access to health care by reducing barriers for Deferred Action for Childhood Arrivals (DACA) recipients. Earlier this month, HHS announced its intention to release this rule by the end of April, and today’s announcement marks the fulfillment of that promise. The proposed change applies to the Health Insurance Marketplaces, the Basic Health Program, and some Medicaid and Children’s Health Insurance Programs (CHIP).

“DACA recipients, like all Dreamers, are Americans, plain and simple. The United States is their home, and they should enjoy the same access to health care as their fellow Americans,” said HHS Secretary Xavier Becerra. “Every day, nearly 580,000 DACA recipients wake up and serve their communities, often working in essential roles and making tremendous contributions to our country. They deserve access to health care, which will provide them with peace of mind and security.”

“Young people who come to this country—in many cases, the only country they have ever known as home—work hard to build their lives here, and they should be able to keep themselves healthy,” said CMS Administrator Chiquita Brooks-LaSure. “The Biden-Harris Administration is committed to ensuring affordable, quality health care for all, and to providing DACA recipients the opportunities and support they need to succeed.”

The proposed rule, if finalized, would remove the current exclusion that treats DACA recipients differently from other individuals with deferred action who would otherwise be eligible for coverage under select CMS programs. If the rule is finalized as proposed, it could lead to 129,000 previously uninsured DACA recipients receiving health care coverage. Over the last decade, DACA has provided peace of mind and work authorization to more than 800,000 Dreamers.

As I noted at the time, not all of the ~230K uninsured DACA enrollees will enroll. After all, millions of uninsured Americans are already eligible for Medicaid, CHIP or ACA exchange subsidies who haven't enrolled in any of those programs yet, so it's not realistic to assume that every newly-eligible DACA enrollee will do so. Even so, 129,000 people gaining healthcare coverage is still a pretty big deal--that's around the same number of ACA Medicaid expansion enrollees in Idaho or Utah today.

The proposed rule would amend the definition of “lawfully present” to include DACA recipients for the purposes of Medicaid and CHIP. In effect, this would extend Medicaid and CHIP coverage to children and pregnant women in states that have elected the “CHIPRA 214” option for children and/or pregnant individuals, the Basic Health Program, and Affordable Care Act Marketplace coverage. DACA recipients would need to meet all other eligibility requirements to qualify for coverage. Additionally, DACA recipients would be eligible for financial assistance through the Marketplace, such as advance payments of the premium tax credit and cost-sharing reductions if they meet all other eligibility requirements.

If the rule is finalized as proposed, DACA recipients would qualify for a special enrollment period to select a qualified health plan through a Marketplace during the 60 days following the effective date of the final rule.

This NPRM has a proposed effective date for all provisions of November 1, 2023. CMS is requesting comment from the public on proposed regulations, and specifically on the feasibility of this date and whether to consider a different effective date.

It sounds like it's all but locked in; the only remaining question appears to be whether Nov. 1st is the best time to make it official. That makes sense to me, since that's also the launch of the 2024 Open Enrollment Period, although the fact that this would technically also be a Special Enrollment Period makes me question whether DACA enrollees would have their exchange coverage kick in effective 12/01/23 or on 1/01/24 like everyone else.