The Medicaid program was designed to help low-income Americans—children, pregnant women, seniors, and people with disabilities—not to serve as a taxpayer-funded health plan for those in the country illegally. Yet new findings reveal that some Democrat-run states have been treating it that way.
A preliminary audit by the Centers for Medicare & Medicaid Services (CMS) uncovered that, over the past two years, six jurisdictions—California, the District of Columbia, Illinois, Washington, Colorado, and Oregon—improperly spent a combined $1.35 billion in federal Medicaid funds to cover healthcare for illegal immigrants.
Federal law strictly limits how Medicaid funds may be used for non-citizens. States are allowed to use federal money for emergency care, but ongoing or routine care for those without legal status must be funded solely with state dollars. Nevertheless, these blue states allegedly diverted federal funds to provide comprehensive benefits to undocumented immigrants, in direct violation of federal rules.
CMS spokesperson Emily Hilliard told Fox News Digital, “Protecting Medicaid from waste, fraud and abuse isn’t optional. It’s the law. Every dollar misspent on illegal healthcare spending is a dollar taken from vulnerable Americans.” She added that the Trump administration “won’t tolerate” such misuse, promising aggressive audits, recovery of every misspent dollar, and accountability for the states involved.
California stands out as the biggest offender, reportedly spending over $1 billion in federal Medicaid funds on illegal immigrant healthcare. Illinois followed with nearly $30 million in questionable spending, while Oregon improperly spent about $5.5 million.
Governor Gavin Newsom’s office insists the allegations are false, claiming that California complies with federal law. But policy experts and watchdogs disagree. Republican gubernatorial candidate Steve Hilton argues that California manipulates Medicaid’s “provider tax” provision to secure federal matching funds that are then funneled into the state’s healthcare programs for illegal immigrants.
Chris Pope of the Manhattan Institute, a respected public policy scholar, said California and other blue states are “abusing federal provisions that allow states to use federal Medicaid dollars for emergency care for undocumented aliens.” He added pointedly, “Any claim that state healthcare expenditures don’t ultimately involve some form of federal funds should be regarded with suspicion.”
This scandal isn’t just about providing taxpayer-funded healthcare to people who entered the country illegally—it’s about extending those benefits to some with violent criminal histories. Jim O’Neill, the acting director of the CDC and deputy secretary at the Department of Health and Human Services, has been posting a daily “MorningMedicaidMugshot” series to highlight egregious examples.
On October 29, 2025, O’Neill profiled Layth Kamil, a 24-year-old illegal immigrant from Iraq convicted of exposing himself to a 15-year-old girl. According to O’Neill, Kamil has received nearly $16,000 in taxpayer-funded Medicaid benefits. The day before, O’Neill spotlighted Haissam Massalkhy, a 45-year-old illegal immigrant from Lebanon convicted of drunk driving that killed an American jogger; Massalkhy has reportedly received more than $30,000 in Medicaid-paid care.
Other posts have featured illegal immigrants convicted of attempted murder and child rape—all receiving healthcare at taxpayer expense. “Democrats are demanding continued funding of this violent illegal alien’s Medicaid as a condition for reopening the government and paying the hardworking public servants at my department,” O’Neill lamented in one post.
It’s a jaw-dropping reality: American taxpayers are footing the medical bills of individuals who not only broke immigration laws but also committed heinous crimes.
By federal statute, Medicaid funds may cover emergency medical treatment and pregnancy-related services for those who cannot prove lawful presence. Any broader coverage must be paid entirely with state dollars. The federal share cannot be used for routine care, prescriptions, or long-term services for illegal immigrants.
However, the CMS audit suggests that several blue states have blurred these lines, manipulating accounting mechanisms to draw down federal funds under the guise of “emergency care” while quietly expanding eligibility for undocumented residents.
In May 2025, CMS announced increased oversight of states suspected of such violations, warning that non-compliant jurisdictions could lose federal financial participation and face recoupment actions. Administrator Mehmet Oz has ordered regular monitoring, with states now receiving monthly lists of enrollees whose immigration status cannot be verified. “Every dollar misspent is a dollar taken away from an eligible, vulnerable individual in need of Medicaid and CHIP,” the agency emphasized.
The Trump administration plans to claw back the improperly used funds and penalize states that refuse to comply with federal law. CMS will recover the misspent money, tighten verification requirements, and hold state officials responsible for systemic abuse. States that continue to misuse federal Medicaid funds risk severe financial sanctions and potential legal consequences.
This renewed enforcement effort marks a turning point. For the first time in years, the federal government is sending a clear message: taxpayer dollars are for American citizens, not for those who violated immigration law to come here—and certainly not for those convicted of violent crimes.
Every taxpayer should demand transparency and accountability. Voters have the right to know how their states are spending federal Medicaid funds and whether those funds are being siphoned to cover illegal immigrants. Americans should pressure their governors and legislatures to disclose their Medicaid accounting practices and stop using federal dollars for unlawful purposes.
Medicaid must serve its rightful purpose: to care for needy American citizens, not to bankroll the healthcare of those who entered illegally. The Trump administration’s crackdown is a long-overdue step toward restoring sanity, sovereignty, and fairness to a system that blue-state politicians have abused for far too long.
