Trump Administration Aims to Recover Medicaid Funds
The Trump administration is working to reclaim over $1 billion in federal Medicaid funding that some blue states allegedly spent on healthcare for undocumented immigrants. This group reportedly includes individuals with serious criminal records, such as murder and sexual offenses.
A preliminary audit conducted by the Centers for Medicare and Medicaid Services revealed that from 2024 to 2025, states like California, Washington DC, Illinois, Washington State, Colorado, and Oregon improperly disbursed a total of $1,351,204,127 intended for federal Medicaid to cover healthcare costs for undocumented immigrants.
While federal law generally forbids using Medicaid funds for undocumented immigrants, states can use them for emergency care, irrespective of immigration status. Furthermore, states may provide health insurance for undocumented immigrants, as long as it’s funded with state tax dollars. However, some experts believe that Democrats may be taking advantage of a loophole in federal regulations to offer extensive health benefits to this population.
“It’s crucial to protect Medicaid from misuse,” CMS spokeswoman Emily Hilliard stated. “Every dollar spent on unauthorized healthcare is a dollar taken away from vulnerable Americans. The Trump administration won’t let this stand. CMS is conducting audits to recover these funds and hold states accountable.”
Contentions Surrounding Medicaid Spending
California is notably the largest offender, reportedly spending over $1 billion of federal Medicaid money on healthcare for undocumented immigrants. Illinois follows with nearly $30 million in inappropriate expenditures, and Oregon has identified about $5.5 million in similar issues.
California Governor Gavin Newsom’s office firmly denies these allegations, claiming that Republican assertions about the state’s misuse of federal funds are unfounded.
On the other hand, Steve Hilton, a former Fox News host and current Republican candidate hoping to succeed Newsom, contends that California employs a complicated Medicaid provision called the “provider tax” to secure matching federal funds. Chris Pope, a public health policy analyst at the Manhattan Institute, argues that California is misusing a federal rule intended for emergency care to benefit undocumented immigrants.
Fox News Digital reached out to Newsom’s office for a response regarding these issues but has not yet received a reply.
A Broader Discussion on Medicaid Usage
“Medicaid represents the largest source of federal funding for states,” Pope noted. “Initially designed to assist those who qualify, states have adapted over time to exploit the program, inflating expenses to finance activities that wouldn’t typically be allowed.” He suggested skepticism towards any claims that federal funds are not implicated in state healthcare costs.
Jim O’Neill, the acting director of the CDC and deputy secretary of the Department of Health and Human Services, has underscored the inequities in federal funds going to undocumented immigrants, some of whom have violent criminal pasts. He has been sharing examples through daily posts called “MorningMedicaidMugshots.”
On October 29, O’Neill highlighted the case of Reis Kamil, a 24-year-old undocumented Iraqi individual who was convicted of exposing himself to a minor. Kamil’s medical bills, covered by taxpayer-funded Medicaid, were nearly $16,000. The day before, he spotlighted Haitham Masarki, a 45-year-old undocumented Lebanese who, after being convicted of drunk driving and killing an American jogger, racked up over $30,000 in medical expenses.
Other highlighted cases include individuals charged with attempted murder and child rape.
O’Neill also expressed frustration, remarking that “Democrats are demanding continued Medicaid funding for this violent illegal alien as a condition for reopening the government and compensating dedicated public servants in my department.”
