California DACA Recipients Face Looming Coverage Gap as ACA Eligibility Reverses

In a policy reversal with immediate consequences, approximately 2,300 DACA recipients in California—often referred to as “Dreamers”—will lose access to health insurance through Covered California at the end of August 2025. This development underscores critical challenges for healthcare access among undocumented individuals in our state. 

1.  What’s Changing—and Why

• Federal Reversal: In June, the Department of Health and Human Services rescinded a 2023 rule that had classified DACA recipients as “lawfully present,” enabling access to ACA marketplace plans with subsidies. This change will take effect late August. 

• Local Impact: Covered California will terminate health plans for about 2,300 DACA recipients as of August 31, 2025. 

2.  Consequences for Dreamers

• Insurance Disruption: Many Dreamers now face uncertain access to healthcare—particularly those who don’t qualify for Medi‑Cal due to income thresholds, and who cannot afford private plans without subsidies. 

• Broader Risk: Removing younger and typically healthier individuals from the risk pool may actually raise insurance premiums for all consumers, according to public health experts. 

3.  Policy Context & Ripple Effects

• This federal rollback comes amid broader state-level budget pressures. California is also considering Medi-Cal enrollment freezes and premium requirements for undocumented immigrants starting in 2026–2027, measures projected to save billions. 

• Such disruptions may increase care delays, drive higher emergency costs, and stress community clinic operations. 

4.  What LACMA Members Should Know

• Patient Impact: Physicians serving undocumented or DACA patients must prepare for insurance loss, increased reliance on safety-net programs, and gaps in care continuity.

• Operational Response: Clinics should strengthen outreach to affected patients, guide them through alternatives such as Medi‑Cal, employer-based coverage, or sliding-scale community clinics.

  
  

5. The Bigger Picture

The 13-year-old Deferred Action for Childhood Arrivals (DACA) program does not grant recipients legal status, but it shields them from deportation and provides work authorization. California is home to an estimated 150,000 DACA recipients.

President Biden’s 2023 effort to extend ACA marketplace coverage to this group faced immediate opposition from 19 Republican-led states. A federal judge in North Dakota blocked the rule in those states, but the Centers for Medicare and Medicaid Services has now issued a new rule applying nationwide—prompting the current coverage loss in California.

DACA recipients are just the first wave of immigrants affected by broader federal cuts. Beginning in 2027, marketplace financial assistance will be eliminated for some lawfully present immigrants, including refugees and asylees—likely putting coverage out of reach for many. At the same time, all Covered California enrollees could face higher costs, with monthly premiums projected to rise by an average of $101 next year.

LACMA+CMA will continue to monitor these developments, provide resources for affected physicians and patients, and advocate for policies that preserve equitable access to healthcare for all Californians.