Trump vows to recover more than $1 billion misused by states to fund health care for illegal immigrants

FIRST ON FOX: The Trump administration plans to claw back more than $1 billion from the federal Medicaid program, which it says is spent by blue states on health care for illegal immigrants, some of whom have violent criminal records for murder and rape.

A preliminary audit by the Centers for Medicare and Medicaid Services found that in recent years, mainly in 2024 and 2025, California; Washington, DC; Illinois; Washington; Colorado; and Oregon inappropriately spent a total of $1,351,204,127 in federal Medicaid funds to help pay for illegal immigrants’ health care.

While federal Medicaid dollars are supposed to be largely prohibited from being used to cover health care for illegal immigrants, they can be used by states for emergency treatment regardless of the patient’s citizenship or immigration status.

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States can also legally cover health insurance for illegal immigrants, as long as it is funded solely through state taxes. But, some experts say, Democrats are exploiting loopholes in federal laws that allow them to offer comprehensive health benefits to illegal immigrants.

“Protecting Medicaid from waste, fraud and abuse is not optional. It is the law. Every dollar misspent on illegal health care spending is a dollar taken away from vulnerable Americans,” CMS spokesperson Emily Hilliard told Fox News Digital.

“Federal law prohibits using Medicaid funds for illegal immigrants, but several Democratic-led states did it anyway. The Trump administration will not stand for it. CMS aggressively audits, recovers every dollar, and holds states accountable.”

A day after the current government shutdown, the Trump administration released a memo claiming that Democrats wanted to repeal the Republican Party’s reforms in the “big, beautiful bill” that sought to close so-called backdoor loopholes allowing blue states to use federal dollars to pay for health care for illegal immigrants. (Getty/iStock)

California was by far the biggest offender, spending more than $1 billion in federal Medicaid dollars on health care for illegal immigrants, according to CMS. The second largest offender was Illinois, which CMS found improperly spent nearly $30 million, followed by Oregon, which the audit found improperly spent about $5.5 million.

California Gov. Gavin Newsom’s office has denied claims that his state improperly uses federal funds to pay for health care for illegal immigrants, telling the Los Angeles Times that the Republicans’ claims are “false.”

But Steve Hilton, a former Fox News anchor and current Republican candidate to be Newsom’s next term-limited governor of California, argued that California has used a complex Medicaid provision known as a “provider tax” to obtain matching federal dollars, which are then pooled into the money the state uses to pay for its health care offered to undocumented immigrants.

Chris Pope, a public health policy expert at the Manhattan Institute, argued that California is abusing federal provisions that allow states to use federal Medicaid dollars for emergency care of undocumented aliens.

California Governor Gavin Newsom during a bill signing to redraw the state’s congressional maps August 21, 2025, in Sacramento, California. (Justin Sullivan/Getty Images)

Fox News Digital reached out to Newsom’s office for comment on this story but did not receive a response.

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“Medicaid is by far the largest source of federal funding for states. It was initially intended to provide aid only to eligible recipients, but, over time, states figured out how to game the system, increasing allowable spending and diverting profits to fund activities that were supposed to be prohibited,” Pope said.

“Any assertion that state health care spending does not ultimately involve some form of federal funds should be viewed with suspicion.”

Jim O’Neill, the current acting director of the Centers for Disease Control and Prevention and deputy secretary of the Department of Health and Human Services, also pointed out that of the federal funds that go illegally to illegal immigrants, some even go to illegal immigrants with violent criminal histories. O’Neill published a daily “MorningMedicaidMugshot” with examples over the past few days.

Federal agents arrest a person after attending a court hearing at the Jacob K. Javitz Federal Building on July 1, 2025, in New York. (Mostafa Bassim/Anadolu)

On October 29, O’Neill highlighted Layth Kamil, a 24-year-old illegal alien from Iraq who was convicted of exposing himself to a 15-year-old and who O’Neill said received nearly $16,000 in taxpayer-funded health care through Medicaid. The day before, O’Neill highlighted the story of Haissam Massalkhy, a 45-year-old illegal alien from Lebanon convicted of driving under the influence and killing a U.S. citizen who was jogging. Massalkhy received more than $30,000, according to O’Neill.

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Other illegal aliens O’Neill highlighted included people convicted of attempted murder and child rape.

“Democrats are demanding continued Medicaid funding for this violent illegal alien as a condition of reopening the government and paying the hardworking public servants in my department,” O’Neill lamented in one of his recent “MorningMedicaidMugshot” posts.