The Trump administration has announced plans to recover over $1 billion in federal Medicaid funds that were reportedly improperly spent by several Democrat-led blue states on healthcare for illegal immigrants, including some with violent criminal histories, Fox News reports. A preliminary audit by the Centers for Medicare and Medicaid Services (CMS) revealed that states such as California, Washington D.C., Illinois, Washington, Colorado, and Oregon collectively misused $1.35 billion in federal Medicaid dollars mainly during 2024 and 2025. These funds were used to provide healthcare beyond emergency treatment for illegal immigrants, which federal law broadly prohibits when using Medicaid dollars.
Notably, California accounted for the largest portion of this improper spending, with over $1 billion of federal Medicaid funds used for illegal immigrants’ healthcare. Illinois and Oregon followed with nearly $30 million and $5.5 million, respectively. Federal law allows Medicaid payments for emergency care regardless of immigration status, and states may use their own tax dollars to cover other healthcare for illegal immigrants; however, Democrats are alleged to be exploiting legal loopholes to access federal Medicaid funds for comprehensive coverage.
Officials like CMS spokesperson Emily Hilliard emphasized the enforcement of laws preventing Medicaid fraud and misuse, with the Trump administration committed to recovering misused funds and holding states accountable. Public health experts argue that states have manipulated Medicaid provisions, such as “provider taxes,” to funnel federal dollars into programs benefiting illegal immigrants. This includes funding healthcare for illegal immigrants with serious violent criminal convictions.
Among highlighted cases are individuals like Layth Kamil, an illegal immigrant from Iraq convicted of sexual offenses, and Haissam Massalkhy from Lebanon, convicted of DUI manslaughter, who have received substantial Medicaid funding. Acting CDC Director Jim O’Neill has publicly spotlighted such cases as part of efforts to expose what he views as misuse of taxpayer dollars.
California officials, including Governor Gavin Newsom’s office, have denied claims of improper use of federal funds. Meanwhile, critics insist these practices divert essential resources away from vulnerable American citizens. The Trump administration’s move seeks to enforce federal law strictly and ensure taxpayer money is used appropriately, not benefiting illegal immigrants unlawfully.
This action forms part of broader efforts by the Trump administration to clamp down on illegal immigration benefits and enforce immigration laws more rigorously at federal and state levels to restore security to America.