A problem-solution teaser: When a policy change renders thousands abruptly uninsured, the ripple effects fall much farther than the people losing coverage. Such is the reality for California’s DACA recipients simply referred to as Dreamers who will soon lose their ACA marketplace health coverage by August 31, 2025. The federal Centers for Medicare and Medicaid Services (CMS) reversal results in 2,300 Californians racing to find substitutes, as the larger health system prepares to feel the effects.
Just last year, the Biden administration threw open the doors of the ACA to DACA recipients, deeming them “lawfully present” and permitting them to purchase subsidized plans through Covered California. In June, however, the Trump administration overturned that ruling, and now the window is closing rapidly. Covered California executive director Jessica Altman referred to the action as “deeply unfair to hard-working, tax-paying Californians who had believed they would be able to have health insurance in 2025, only to have it taken away eight months later.” She further said, While we had hoped for a different result for DACA recipients, we have to obey federal law.
What’s ahead for Dreamers? Their choices are few and, for many, unappealing. The employed may be able to switch to employer plans. Others, particularly those with lower incomes, could be helped by Medi-Cal the state program that provides health insurance to low-income residents. But this is the catch: freelancers and self-employed Dreamers who make too much for Medi-Cal but not enough to pay full prices for private coverage find themselves in an agonizing coverage gap. This population, which was already struggling under the realities of gig economy and entrepreneurship, now has to figure out a system with limited buffers.
Covered California is making an effort to inform all impacted DACA recipients and assist them in deciding what they can do. They’re urging individuals to take a look at Medi-Cal eligibility, evaluate employer-sponsored insurance, or examine direct purchase plans although the latter tend to carry high price tags. As the organization itself puts it, “Covered California urges all DACA recipients to seek health insurance options and remain covered to shield themselves against financial crisis in case of an emergency.” Both resources and information are being offered in English and Spanish, and neighborhood nonprofits are coming forward to assist with enrollment and legal counsel.
But that’s not all there is to the story. There’s a larger, systemic risk at issue here. Experts caution that taking young, healthy participants such as most Dreamers, who are below 36 out of the ACA marketplace might end up destabilizing the system for all. Arturo Vargas Bustamante, the director of UCLA’s Latino Policy and Politics Institute, elaborated, When younger and healthier individuals enroll in insurance, their affordable coverage offsets the high expense of insuring people who are older and sicker. If not, premiums rise for everyone. Then sick individuals who truly need to obtain coverage pay the price.
It’s not theory. In California, the monthly premium for Covered California plans would increase by an average of $101 a next year for all enrollees. The pool of risks gets smaller, expenses rise, and the system’s precarious balance is disrupted. The ACA was created based on the premise that large-scale participation of young, healthy individuals remains affordable for premiums and stabilizes the market. When populations such as Dreamers are displaced, it’s not only a loss for them, but for the whole community of covered Californians. The record is clear: California’s individual market has drawn on robust outreach and widespread inclusion to hold costs down and coverage levels up.
In contrast, the transformation of ACA eligibility for immigrants has been a long, tortuous path. Since its passage, the ACA has kept undocumented immigrants from purchasing coverage on the marketplace, but DACA recipients were an exception, albeit a rare one until recently. With ongoing legal challenges and political changes, still other groups may be stripped of access. The new federal budget eliminates marketplace financial support for certain lawfully present immigrants, such as refugees and asylees, beginning in 2027. Without subsidies, many will be priced out.
California has attempted to close these gaps by covering all low-income residents under Medi-Cal, including those regardless of immigration status. As of January 2024, all income-eligible adults, regardless of status, are eligible to enroll in full-scope Medi-Cal. However, this only benefits those below the income level. For those with too much income, particularly freelancers and small business owners, private insurance outside of Covered California tends to be too expensive. State-supported programs and local efforts are trying to fill the gap, but limitations such as language, access to the internet, and fear of immigration repercussions still hold back many from signing up.
DACA recipients’ uncertainty is only one installment of a much broader narrative of health equity, immigrants’ rights, and the future of California coverage. “Maintaining public health is important for ensuring access to health care,” as one expert put it. When certain populations are left without coverage, the ripple effects resonate reaching not only the individual, but also the family, community, and the state’s health as a whole.
For the time being, the emphasis is on helping those losing coverage, on pushing for policy solutions, and keeping the discussion open about what actual health equity in a changing America will look like.
