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EXCLUSIVE REPORT: The Trump Administration is taking steps to reclaim more than $1 billion in federal Medicaid funds allegedly misallocated by Democratic-led states for the healthcare of illegal immigrants, including those with serious criminal convictions.
A recent audit by the Centers for Medicare and Medicaid Services has revealed that over the last few years, particularly during 2024 and 2025, states such as California, Washington, D.C., Illinois, Washington, Colorado, and Oregon allegedly spent a staggering total of $1,351,204,127 in federal Medicaid dollars improperly to fund healthcare for undocumented individuals.
While federal regulations generally prohibit the use of Medicaid funds for illegal immigrants, exceptions exist for emergency medical treatment regardless of the patient’s immigration status. Moreover, states can provide healthcare coverage for illegal immigrants when funded by state tax revenues. However, experts contend that some Democratic states are exploiting legal loopholes that permit a broader range of funding than intended.
Emily Hilliard, a spokesperson for the Centers for Medicare and Medicaid Services, stated, “Protecting Medicaid from waste, fraud, and abuse is not optional—it is mandated by law. Every dollar misallocated towards illegal healthcare spending diminishes the resources available for vulnerable American citizens. Federal law prohibits the use of Medicaid funds for illegal immigrants, yet several Democratic states have pursued this action regardless. The Trump Administration remains committed to rectifying this situation, auditing rigorously to recover every misplaced dollar and holding accountable those states responsible.”
In this review, California stood out as the primary offender, purportedly expending over $1 billion in federal Medicaid funds for the healthcare of illegal immigrants. Following California, Illinois reportedly misallocated nearly $30 million, while Oregon was found to have misused approximately $5.5 million.
The office of California Governor Gavin Newsom has dismissed these allegations, asserting that the claims made by Republican officials are “false.” Newsom’s administration maintains that California’s use of federal funds for healthcare services does not violate established regulations.
However, Steve Hilton, a former Fox News anchor and a current Republican gubernatorial candidate in California, argues that California is strategically utilizing a complicated Medicaid provision known as “provider tax” to acquire matching federal funds. These pooled funds are subsequently utilized to finance healthcare for undocumented immigrants. Public health policy expert Chris Pope from the Manhattan Institute has pointed out that California may be misapplying federal guidelines meant for emergency medical care to cover a broader array of health services for undocumented individuals.
Fox News Digital attempted to reach Governor Newsom’s office for further clarification on this matter but did not receive a response.
Pope also emphasized, “Medicaid represents the largest source of federal funding for states. Originally, the program aimed to assist only eligible beneficiaries, but over time, states have found ways to manipulate the system—inflating allowable costs and diverting the profits for ostensibly prohibited activities. Any assertion that state expenditures in healthcare do not ultimately depend on federal funding should be approached with skepticism.”
Additionally, Jim O’Neill, the current Acting Director of the Centers for Disease Control and Prevention and Deputy Secretary at the Health and Human Services Department, has been vocal about the misuse of federal funds that inadvertently benefit illegal immigrants with violent criminal histories. O’Neill has initiated a series called “MorningMedicaidMugshot” to highlight specific cases of illegal aliens receiving taxpayer-funded healthcare.
On October 29, O’Neill spotlighted Layth Kamil, a 24-year-old illegal alien from Iraq, who received nearly $16,000 in taxpayer-funded Medicaid, even after being convicted of indecent exposure to a minor. On the previous day, he drew attention to Haissam Massalkhy, a 45-year-old illegal alien from Lebanon, who was convicted of driving under the influence and causing the death of an American citizen. Massalkhy has consumed over $30,000 in taxpayer-funded healthcare assistance according to O’Neill’s findings.
O’Neill’s series has included additional examples of illegal immigrants convicted of serious crimes such as attempted murder and child rape.
“Democrats are insisting on continued funding for the Medicaid of this violent illegal alien as a prerequisite for reopening the government and compensating dedicated public servants in my department,” O’Neill expressed during one of his insightful “MorningMedicaidMugshot” installments.
Implications for Future Healthcare Policy
The implications of these findings resonate deeply within ongoing discussions about healthcare policy and reform. The situation highlights the complex intersections of immigration, healthcare access, and federal funding that states navigate. As auditing efforts continue, implications for Medicaid as a federal-state partnership hang in the balance.
Moving forward, the scrutiny over Medicaid spending practices in states will likely intensify. Stakeholders on both sides of the political spectrum will confront challenges as they seek solutions that both comply with federal regulations and address the healthcare needs of vulnerable populations.
