How Do Immigrants Obtain Health Insurance Under the ACA?

If you're an immigrant arriving in the U.S., one of the first things on your to-do list is obtaining health insurance. Unlike many other countries, the U.S. does not have universal or single-payer health coverage. And although Medicare and Medicaid are government-sponsored health plans, they're not available to new immigrants.

This article will answer some frequently asked questions about what health insurance options are available for immigrants, including new arrivals and those who have been in the U.S. for a long time.

Are ACA Premium Subsidies Limited to U.S. Citizens?

No, Premium subsidies (premium tax credits) in the exchanges are not limited to U.S. citizens. The subsidies are available to lawfully-present residents, which includes a long list of immigration statuses (note that Deferred Action for Childhood Arrivals—DACA—is not considered an eligible immigration status for purchasing coverage in the exchange).

In fact, premium subsidies are available to recent immigrants with income below the poverty level, which is not the case for non-immigrants or immigrants who have been lawfully present U.S. residents for more than five years.

The ACA calls for people with income below the poverty level to receive Medicaid instead of private plans in the exchange, which is why premium subsidies generally aren't available to applicants with income below the poverty level.

But recent immigrants aren't eligible for federally-funded Medicaid until they have been in the U.S. for at least five years (states have the option to use their own funding to extend Medicaid coverage to recent immigrants, which some do, particularly if the person is pregnant).

When the Affordable Care Act (ACA) was written, lawmakers realized that the ACA's lower-income threshold for premium subsidies (i.e., the poverty level) would leave low-income recent immigrants without any realistic coverage options. So they specifically called for premium subsidies that would cover new immigrants with income below the poverty level.

In this situation, the applicant's income is treated as if it's at the poverty level (or 139% of the poverty level in states that have expanded Medicaid, where that's the lowest income that makes a person eligible for subsidies in the exchange instead of Medicaid).

As a result of the American Rescue Plan, enrollees with income that doesn't exceed 150% of the poverty level are eligible for premium subsidies that cover the full cost of the benchmark health plan. And this provision has been extended through 2025 by the Inflation Reduction Act (it could be extended again with a future act of Congress).

Ironically, the coverage gap that lawmakers were trying to prevent for recent immigrants applies instead to about 2 million non-immigrants in 11 states that have opted not to accept federal funding to expand Medicaid. (The ACA called for Medicaid expansion to be implemented in every state, but a 2012 Supreme Court ruling eliminated the federal government's right to condition overall Medicaid funding on a state's willingness to expand coverage, and some states have continued to reject Medicaid expansion.)

But in every state, recent immigrants with lawfully-present status are eligible for premium subsidies even if their income is below the poverty level.

How Does the Exchange Know That Applicants Are Lawfully Present?

During the enrollment process, the exchanges must verify that the enrollee is lawfully present in the U.S. There is a section on the application where non-citizens can enter their immigration status and include details such as an alien number or an I-94 number (here's a complete list of the documents that can be used to prove immigration status, and how to enter them if you're enrolling via HealthCare.gov; state-run exchanges have similar processes).

If you're not able to enter the document number or you get an error, you'll have an option to upload a copy of your immigration documents, or mail them to the exchange. If you aren't able to provide immigration documents at all, your coverage may end up being retroactively canceled. Coverage terminations happen each year when enrollees are unable to provide adequate proof of immigration status.

So if you enroll and are having trouble with the system that verifies immigration status, don't just let it slide, as your coverage could be terminated if you do. Reach out to the exchange for help, either on the phone or in-person at an enrollment center, and make sure that your documentation is accepted.

What Coverage Is Available for Immigrants Who Are 65 or Older?

Before 2014, there were few options for recent immigrants aged 65 or older. Private individual health insurance policies generally weren't available for anyone over the age of 64, and like Medicaid, there's a five-year wait before recent immigrants can enroll in Medicare. So older immigrants often had to rely on long-term travel insurance, unless they had access to an employer-sponsored plan in the U.S.

Even after five years, Medicare was often unaffordable for immigrants. Since Medicare is partially funded by payroll taxes that U.S. workers pay during their careers, Medicare Part A (hospital insurance) is only premium-free for people who have paid Medicare taxes for at least ten years (stay-at-home spouses can qualify for Medicare based on a spouse's work history).

After five years, immigrants who are 65 or older can purchase Medicare even if they haven't paid into the Medicare system via payroll taxes. In 2023, Medicare Part A is $506/month for people without a work history in the U.S., and Medicare Part B is $164.90/month (everyone pays a premium for Medicare Part B, regardless of work history; enrollees with income above $97,000 pay more for Part B).

Medigap coverage and Medicare Part D are important supplements that can be added to Medicare, but they come with additional premiums.

But lawfully-present immigrants can enroll in private plans in the individual market as soon as they arrive in the U.S., and thanks to the ACA, they're no longer prevented from doing so if they're over the age of 64 (individual market coverage is available regardless of age, as long as the person isn't also enrolled in Medicare).

In addition, premium subsidies are available regardless of age, and as described above, the subsidies are available to recent immigrants with income below the poverty level. And the American Rescue Plan and Inflation Reduction Act have made those subsidies larger and more widely available.

For people who don't qualify for premium subsidies and have to pay full-price, individual and small group premiums for older enrollees are capped at no more than three times the premium charged for a 21-year-old, under the terms of the ACA. So an 85-year-old will be charged the same amount as a 64-year-old (in both cases, it's three times the rate charged for a 21-year-old, unless the state requires a lower ratio; it cannot be higher than three to one).

There are still travel insurance plans and "inbound immigrant" health plans available, but they tend to be more limited in scope than the plans available in the exchange, with benefit caps and pre-existing condition exclusions. These plans are not considered minimum essential coverage, but there is no longer a penalty for being without minimum essential coverage unless you're in one of the few states that have their own penalties.

Can an Immigrant Enroll in Coverage Outside of Open Enrollment?

Yes. Becoming a U.S. citizen or gaining lawfully-present status in the U.S. is a qualifying event, which gives the person 60 days to enroll in a plan through the health insurance exchange (note that this is one of just a few qualifying events that does not trigger a special enrollment period for plans purchased outside the exchange; the special enrollment period is only available in the exchange).

Some recent immigrants have access to employer-sponsored plans, and those plans also have special enrollment periods for people who are hired outside of open enrollment or experience a qualifying event. So although open enrollment—for both individual and employer-sponsored plans—only comes around once per year, new immigrants have an opportunity to enroll in coverage regardless of when they immigrate.

Can Undocumented Immigrants Obtain Coverage?

Under ACA rules, legally present immigrants can enroll in plans offered through the exchange and can receive premium subsidies if their income makes them eligible. But the ACA does not have any provisions that allow undocumented immigrants to obtain coverage.

The law explicitly prevents undocumented immigrants from purchasing coverage in the exchange—even if they pay full price; see section 1312(f)(3) of the ACA. Undocumented immigrants are also generally ineligible for Medicaid.

There are several states that allow undocumented children to enroll in Medicaid. They use state funds for this coverage, as opposed to the normal mix of state and federal funds used to cover other Medicaid enrollees. California Medicaid (Medi-Cal) already covered undocumented children but the states expanded this program in 2020 to include young adults up to age 26.

And some states have established ways for undocumented immigrants to obtain coverage through the exchange or a similar portal. Washington state has received federal approval to allow undocumented immigrants to use the state-run exchange starting in 2024 (with state-funded subsidies but no federal subsidies). And Colorado has created a separate platform that operates alongside the state-run exchange, allowing undocumented immigrants to obtain coverage with state-funded subsidies. Other states may follow suit in future years.

In every state, undocumented immigrants can obtain coverage under employer-sponsored plans or student health plans if they're otherwise eligible, and they can also purchase individual market coverage as long as they buy it outside of the exchange.

Summary

The ACA's premium tax credits are available to lawfully present immigrants, regardless of how long they've been in the U.S. Medicaid and Medicaid are generally only available after five years, but immigrants who would otherwise be eligible for those programs are able to enroll in coverage through the health insurance exchange, with subsidies based on their income.

A Word From Verywell

If you or a loved one are new to the U.S., the health care system can be a bit overwhelming. But it's important to understand that there are health coverage options available. You don't have to be a U.S. citizen to use the health insurance exchange, and subsidies are available to lawfully present immigrants just as they are to U.S. citizens.