The Trump administration is taking steps to reclaim more than $1 billion in federal Medicaid funds it says were improperly used by several Democratic-led states to cover healthcare for illegal immigrants, including some with violent criminal histories.
According to a preliminary audit by the Centers for Medicare and Medicaid Services (CMS), between 2024 and 2025, states including California, Washington, D.C., Illinois, Washington, Colorado, and Oregon collectively spent $1,351,204,127 in federal Medicaid dollars on healthcare for illegal immigrants.
Federal law generally prohibits using Medicaid funds for non-citizens without legal status, except in cases of emergency medical treatment. States can, however, use their own tax revenues to provide broader healthcare coverage to undocumented residents.
Despite these rules, some experts argue that Democratic-led states are exploiting loopholes to offer comprehensive benefits.
“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,” CMS spokesperson Emily Hilliard told Fox News Digital. “Federal law forbids using Medicaid funds for illegal immigrants, yet several Democrat-led states did it anyway. The Trump administration won’t tolerate it. CMS is auditing aggressively, recovering every dollar, and holding states accountable.”
Audit Findings and State Responses
California reportedly spent over $1 billion of federal Medicaid funds on healthcare for illegal immigrants, making it the largest violator, according to CMS. Illinois followed with nearly $30 million, and Oregon with roughly $5.5 million in improper spending.
California Governor Gavin Newsom’s office has rejected claims that federal funds were misused, calling Republican accusations “false.” However, Steve Hilton, a former Fox News anchor and Republican candidate for governor, contends that California manipulated a Medicaid mechanism called a “provider tax” to access matching federal funds. These funds, he claims, were then pooled into programs serving undocumented immigrants.
Chris Pope, a health policy expert at the Manhattan Institute, argued that California is stretching federal provisions meant only for emergency care. “Medicaid was originally intended to assist eligible beneficiaries,” Pope said. “Over time, states have learned to game the system, padding expenses and diverting profits toward activities that should be prohibited. Any claim that state healthcare expenditures don’t ultimately involve some form of federal funds should be regarded with suspicion.”
Criminal Cases and “MorningMedicaidMugshot”
Jim O’Neill, acting director of the Centers for Disease Control and Prevention and deputy secretary at the Department of Health and Human Services, has recently highlighted that some of the funds are going to illegal immigrants with violent criminal records. O’Neill has been posting daily “MorningMedicaidMugshot” updates featuring examples of such cases.
On Oct. 29, he cited the case of Layth Kamil, a 24-year-old illegal immigrant from Iraq convicted of exposing himself to a 15-year-old, who allegedly received about $16,000 in taxpayer-funded medical care. The day before, he pointed to Haissam Massalkhy, a 45-year-old from Lebanon convicted of killing an American while driving under the influence, who reportedly received over $30,000 in Medicaid-funded care.
Other examples included individuals convicted of attempted murder and child rape. “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 wrote in one of his posts.
