‘Dreamers’ Can Enroll in ACA Plans This Year — But a Court Challenge Could Get in the Way

When open enrollment for the Affordable Care Act, or Obamacare, starts nationwide this week, a group that had previously been barred from signing up will be eligible for the first time: The “Dreamers.” That’s the name given to children brought to the United States without immigration paperwork who have since qualified for the Deferred Action for Childhood Arrivals program.

Under a Biden administration rule that has become contentious in some states, DACA recipients will be able to enroll in — and, if their income qualifies, receive premium subsidies for — Obamacare coverage. The government estimates that about 100,000 previously uninsured people out of the half-million DACA recipients might sign up starting Nov. 1, which is the sign-up season start date in all states except Idaho.

Yet the fate of the rule remains uncertain. It is being challenged in federal court by Kansas and 18 other states, including several in the South and Midwest, as well as Montana, New Hampshire, and North Dakota.

Separately, 19 states and the District of Columbia filed a brief in support of the Biden administration rule. Led by New Jersey, those states include many on the East and West coasts, including California, Colorado, Nevada, New Mexico, New York, Oregon, and Washington.

The rule, finalized in May, clarifies that those who qualify for DACA will be considered “lawfully present” for the purpose of enrolling in plans under the ACA, which are open to American citizens and lawfully present immigrants.

“The rule change is super important as it corrects a long-standing and erroneous exclusion of DACA recipients from ACA coverage,” said Nicholas Espíritu, a deputy legal director for the National Immigration Law Center, which has also filed briefs in support of the government rule.

President Barack Obama established DACA in June 2012 by executive action to protect from deportation and provide work authorization to some unauthorized residents brought to the U.S. as children by their families if they met certain requirements, including that they arrived before June 2007 and had completed high school, were attending school, or were a veteran.

States challenging the ACA rule say it will cause administrative and resource burdens as more people enroll, and that it will encourage additional people to remain in the U.S. when they don’t have permanent legal authorization. The lawsuit, filed in August in U.S. District Court for the District of North Dakota, seeks to postpone the rule’s effective date and overturn it, saying the expansion of the “lawfully present” definition by the Biden administration violates the law.

On Oct. 15, U.S. District Judge Daniel Traynor, who was appointed in 2019 by then-President Donald Trump, heard arguments in the case.

Plaintiff states are pushing for fast action, and it is possible a ruling will come in the days before open enrollment begins nationwide in November, said Zachary Baron, a legal expert at Georgetown Law, who helps manage the O’Neill Institute Health Care Litigation Tracker.

But the outlook is complicated.

For starters, in a legal battle like this, those who file a case must demonstrate the harm being alleged, such as additional costs the rule will force the states to absorb. There are only about 128 DACA recipients in North Dakota, where the case is being heard, and not all of them are likely to enroll in ACA insurance.

Furthermore, North Dakota is not among the states that run their own enrollment marketplace. It relies on the federal healthcare.gov site, which makes the legal burden harder to meet.

“Even though North Dakota does not pay any money to purchase ACA health care, they are still claiming somehow that they are harmed,” said Espíritu, at the immigration law center, which is representing several DACA recipients and CASA, a nonprofit immigrant advocacy group, in opposing the state efforts to overturn the rule.

During the hearing, Traynor focused on this issue and noted that a state running its own marketplace might be a better venue for such a case. He ordered the defendants to present more information by Oct. 29 and for North Dakota to respond by Nov. 12.

On Monday, the judge denied a motion from the federal government asking him to reconsider his order requiring it to provide the state with the names of 128 DACA recipients who live there, under seal, for the purpose of helping calculate any financial costs associated with their presence.

In addition, it’s possible the case will be transferred to another district court, but that could lead to delays in a decision, attorneys following the case said.

The judge also could take a number of directions in his decision. He could postpone the rule’s effective date, as requested in part of the lawsuit, preventing DACA recipients from enrolling in Obamacare while the case is decided. Or he could leave the effective date as it stands while the case proceeds.

With any decision, the judge could decide to apply the ruling nationally or limit it to just the states that challenged the government rule, Baron said.

“The approach taken by different judges has varied,” Baron said. “There has been a practice to vacate some regulatory provisions nationwide, but a lot of judges, including justices on the Supreme Court, also have cited concerns about individual judges being able to affect policy this way.”

Even as the case moves along, Espíritu said his organization is encouraging DACA recipients to enroll once the sign-up period begins nationally in November.

“It’s important to enroll as soon as possible,” he said, adding that organizations such as his will continue to monitor the case and give updates if the situation changes. “We know that getting access to good affordable health care can be transformative to people’s lives.”

This case challenging the rule is wholly separate from another case, brought by some of the same states as those opposed to the ACA rule, seeking to entirely end the DACA program. That case is currently in the appeals process in federal court.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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