The move took longer than promised to finalize and fell short of Democratic President Joe Biden's initial proposal to allow those migrants to sign up for Medicaid, the health insurance program that provides nearly free coverage for the nation's poorest people.
But it will allow thousands of people, known as "Dreamers," to access tax breaks when they sign up for coverage after the Affordable Care Act's marketplace enrollment opens Nov. 1, just days ahead of the presidential election.
"I'm proud of the contributions of Dreamers to our country and committed to providing Dreamers the support they need to succeed," Biden said in a statement Friday.
While it may help Biden boost his appeal at a crucial time among Latinos, a crucial voting bloc that he needs to turn out to win the election, the move is certain to prompt more criticism among conservatives about the president's border and migrant policies.
The action opens the marketplace to any participant in the Obama-era Deferred Action for Childhood Arrivals program, or DACA, many of whom are Latino.
Xavier Becerra, the nation's top health official, said Thursday that many of those migrants have delayed getting care because they have not had coverage.
"They incur higher costs and debts when they do finally receive care," Becerra told reporters on a call. "Making Dreamers eligible to enroll in coverage will improve their health and well-being and strengthen the health and well-being of our nation and our economy."
The administration's action changes the definition of "lawfully present" so DACA participants can legally enroll in the marketplace exchange.
Then-President Barack Obama launched the DACA initiative to shield from deportation immigrants who were brought to the U.S. illegally by their parents as children and to allow them to work legally in the country. However, the "Dreamers" were still ineligible for government-subsidized health insurance programs because they did not meet the definition of having a "lawful presence" in the U.S.
The administration decided not to expand eligibility for Medicaid for those migrants after receiving more than 20,000 comments on the proposal, senior officials said Thursday. Those officials declined to explain why the rule, which was first proposed last April, took so long to finalize. The delay meant the migrants were unable to enroll in the marketplace for coverage this year.
At one point, there were as many as 800,000 people enrolled in DACA at one time, though now that figure is roughly 580,000. The administration predicts only 100,000 will actually sign up because some may get coverage through their workplaces or other ways. Some may also be unable to afford coverage through the marketplace.
Other classes of immigrants, including asylum seekers and people with temporary protected status, are already eligible to purchase insurance through the marketplaces of the ACA, Obama's 2010 health care law, often called "Obamacare."
The president last year also unveiled a regulation that was aimed at fending off legal challenges to DACA; former President Donald Trump tried to end it, and it has bounced back and forth in federal court. Last fall, a federal judge said the current version can continue at least temporarily.
"President Biden and I will continue to do everything in our power to protect DACA, but it is only a temporary solution," Vice President Kamala Harris said in a statement. "Congress must act to ensure Dreamers have the permanent protections they deserve."