On August 30, 2012, HHS announced an amendment to an interim final regulation that pertains to the Affordable Care Act’s Preexisting Condition Insurance Plan (PCIP) program.  77 Fed. Reg. 52614.  The recent amendment results from the Department of Homeland Security’s (DHS) June 15, 2012 announcement that it will, on a case-by-case basis, provide temporary relief from removal by granting “deferred action” with respect to undocumented immigrants under the age of 31 who came to the United States as children and do not present a national security risk.  The amendment to the PCIP program interim final rule clarifies that individuals with deferred action status are ineligible for PCIP program benefits.

The PCIP program interim final regulation took effect on July 30, 2010 and implements the section of the Affordable Care Act that establishes a temporary high-risk health insurance pool program to immediately cover eligible uninsured Americans with preexisting medical conditions.  The PCIP program provides coverage to eligible recipients until January 1, 2014, which is when the Affordable Care Act’s prohibition of denying coverage based on health status or medical history takes effect.  One of the PCIP program eligibility requirements is that an individual must be “lawfully present” in the United States.

As noted, the HHS announcement comes on the heels of DHS’s decision that it will, on a case-by-case basis, grant “deferred action” with respect to certain undocumented individuals under the age of 31 who came to the United States as children.  DHS’s program is referred to as the Deferred Action for Childhood Arrivals (DACA), and its goal is to ensure that the removal process is focused on “high priority” undocumented individuals, such as those posing a danger to national security or public safety.

In the amendment to the interim final regulation concerning the PCIP program, HHS expressly amends the rule’s definition of “lawfully present” so that individuals granted deferred action status under the DACA process are not eligible to enroll in the PCIP program.  Moreover, HHS clarifies that because the PCIP program definition of “lawfully present” also applies to the rules governing Affordable Insurance Exchanges and premium tax credits, DACA recipients are also ineligible to enroll in insurance exchanges and cannot receive tax credits starting in 2014.  The amendment is effective immediately, before anyone granted deferred action status under DACA applies for benefits under the PCIP program.  However, HHS will accept comments on the amendment until October 29, 2012.

In the same vein, CMS recently sent a letter to state Medicaid directors explaining that individuals with deferred action status under the DACA process are ineligible for Medicaid or the Children’s Health Insurance Program (CHIP) under the CHIPRA state option (which gives states the option to provide Medicaid and CHIP to children and/or pregnant women “lawfully residing” in the United States and otherwise eligible for the programs).

The amendment to the interim final rule is available here.  CMS’s letter to state Medicaid directors is available here.

Reporter, Jennifer Simmen Lewin, Atlanta, + 1 404 572 3569, jlewin@kslaw.com.