In a disappointing twist, The New York Times is reporting that the White House has decided that the 1.7 million illegal immigrants that benefited from the DREAM Act will not be eligible for health insurance coverage under President Obama's health care overhaul.

In June, President Barack Obama announced that his administration will stop deporting undocumented immigrant youths who grew up in the United States and who meet certain requirements. The government will also offer them a chance to apply for work permits.

But, according to the report, in August, the Obama administration sent a letter to state health officials, saying that young immigrants "shall not be eligible" for Medicaid or the Children's Health Insurance Program. 

Jennifer M. Ng'andu, a health policy specialist at the National Council of La Raza, a Hispanic rights group, said said that they do not understand why the administration decided to do this. 

"It's providing immigration relief to children and young adults so they can be fully integrated into society, Ng'andu told the Times. "At the same time, it's shutting them out of the health care system so they cannot become productive members of society."

The White House has defended its decision, saying that the deferred-deportation policy "was never intended" to confer eligibility for federal health benefits. 

Marielena Hincapié, the executive director of the National Immigration Law Center called the move "shortsighted and reactionary," saying that it is a "bad public policy."

"We had been working closely with the administration, so we were quite surprised and shocked by the new restrictions on health coverage," she said. 

GOP presidential candidate Mitt Romney has promised to veto the Dream Act if he takes office because it could "create a magnet for illegal immigration." Romney on Monday told the Hispanic Chamber of Commerce in Los Angeles that if he becomes president, he would permanently fix the nation's immigration system. 

"I believe we can all agree that what we need are fair and enforceable immigration laws that will stem the flow of illegal immigration, while strengthening legal immigration," Romney said. "America is a nation of immigrants, and immigration is essential to our economic growth and prosperity."