Overview: Thousands of DACA recipients will lose health insurance through Covered California on August 31, 2025. The Centers for Medicare & Medicaid Services (CMS) issued a rule excluding DACA recipients from enrolling in the health insurance marketplace, severing their access to affordable and quality healthcare.
Breanna Reeves
More than 2,300 undocumented immigrants who came to the U.S. as children, known as “Dreamers” under the Deferred Action for Childhood Arrivals (DACA) program, will lose health insurance under the Affordable Care Act (ACA) on Aug, 31, 2025.
In California, Covered California is the state’s version of the ACA and allows millions of individuals to choose low-cost and affordable health insurance plans through an online marketplace.
In June, the Centers for Medicare & Medicaid Services (CMS) issued the “Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability Final Rule,” excluding DACA recipients from enrolling in the health insurance marketplace and severing their access to affordable and quality health care.
“Covered California is deeply disheartened by the updated rule issued by this federal administration, which targets DACA recipients who are working to provide for their families and secure access to essential health insurance,” stated Covered California Executive Director Jessica Altman in a press release.
“The decision is deeply unfair to hard-working, tax-paying individuals in California who trusted that they would have health insurance for 2025, only to have it stripped away eight months later.”
According to Covered California, they are taking steps to contact every enrollee affected by the federal decision through letters, emails and calls. Covered California encourages all DACA recipients to find other health insurance options.
In addition to terminating Covered California access to DACA recipients, the Trump administration’s “Big, Beautiful Bill” will limit immigrant eligibility for marketplace coverage.
As of now, lawfully present immigrants are eligible for Covered California coverage and financial assistance. But starting in 2027, the bill will limit the number of lawfully present immigrants that qualify for certain subsidies such as premium tax credits and cost-sharing. According to the National Health Law Program, more than 90% of legally present immigrants, which includes people with work and student visas, refugees, asylum seekers and survivors of domestic violence, will lose financial assistance. On average, these Californians would experience a premium increase of $650 per month.
Covered California noted that the combined impact of the loss of enhanced premium tax credits and premium increases would have a devastating impact on Californians. From the loss of the enhanced premium tax credits alone, Covered California estimated that 1.7 million enrollees could see an additional average net premium increase of 66%.
California is taking steps to protect the most vulnerable from being priced out of the marketplace by allocating $190 million in 2026 to provide state subsidies for those earning up to 150% of the federal poverty level.
However, the missing $2.1 billion from the federal government will have a great impact on the state.
While this funding will provide a meaningful lifeline for the lowest-income Covered California enrollees, it far from fills the $2.1 billion hole the federal government will be leaving.
