Trump Administration Demands California Repay $1 Billion in Medicaid Funds Spent on Illegal Immigrant Healthcare
In a bombshell revelation that underscores the fiscal recklessness of progressive governance, the Trump administration has uncovered that California and several other blue states improperly spent over $1.3 billion in federal Medicaid dollars on healthcare for illegal immigrants—including some convicted of violent crimes like murder, rape, and child molestation.
A preliminary audit by the Centers for Medicare and Medicaid Services (CMS) found that California alone accounts for more than $1 billion of the misspent funds, with Illinois, Oregon, Washington, Colorado, and Washington, D.C., making up the remainder. The Trump administration has vowed to recover every dollar and hold states accountable for what officials are calling a flagrant violation of federal law.
“Protecting Medicaid from waste, fraud and abuse isn’t optional. It’s the law,” CMS spokesperson Emily Hilliard told Fox News. “Every dollar misspent on illegal healthcare spending is a dollar taken from vulnerable Americans.”
For conservatives who value fiscal accountability, the rule of law, and government that serves citizens first, this scandal represents everything wrong with progressive governance: lawlessness masquerading as compassion, fiscal irresponsibility disguised as humanitarianism, and contempt for federal law wrapped in moral superiority.
The Numbers Don’t Lie: A Billion-Dollar Betrayal
California’s Billion-Dollar Scheme
According to the federal audit, California improperly spent over $1 billion in federal Medicaid funds on healthcare for illegal immigrants between 2024 and 2025. To put that in perspective, that’s enough money to provide healthcare for approximately 250,000 American citizens for an entire year, or to fund critical infrastructure projects, school improvements, or veteran services.
Instead, California Governor Gavin Newsom’s administration chose to funnel those federal dollars—money contributed by American taxpayers across the nation—to provide comprehensive healthcare coverage for individuals who entered the country illegally.
The other states identified in the audit pale in comparison to California’s violations, but their participation in this scheme is no less egregious:
- Illinois: Nearly $30 million improperly spent
- Oregon: Approximately $5.5 million
- Washington, Colorado, and Washington, D.C.: Combined millions in violations
The Legal Framework: Clear Prohibitions, Deliberate Violations
Federal law is unambiguous: Medicaid funds are prohibited from being used to cover healthcare for illegal immigrants, with a narrow exception for emergency treatment regardless of citizenship or immigration status. States can choose to provide healthcare coverage to undocumented immigrants, but they must do so exclusively with state tax dollars—not federal funds.
Yet California and other blue states appear to have exploited loopholes and engaged in accounting gymnastics to circumvent these restrictions. According to public health policy experts, these states have been using complex Medicaid provisions, including “provider taxes” and expansive interpretations of “emergency care,” to obtain federal matching dollars that ultimately subsidize comprehensive healthcare programs for illegal immigrants.
Steve Hilton, a Republican candidate for California governor, has argued that the state has been using provider tax provisions to pool federal dollars with state funds, effectively laundering federal money into programs explicitly designed for undocumented immigrants. Chris Pope of the Manhattan Institute has similarly argued that California is abusing federal emergency care provisions to provide far more than true emergency services.
“Medicaid is by far the largest source of federal funding for states,” Pope explained. “It was originally intended to only provide aid for eligible beneficiaries, but, over time, states have figured out how to game the system, padding permitted expenses and diverting the profits to fund activities which are supposedly prohibited.”
The Human Cost: Criminals Before Citizens
Taxpayers Funding Violent Offenders’ Healthcare
Perhaps most disturbing is that among the illegal immigrants receiving federally-funded healthcare through these improper programs are individuals convicted of violent crimes. 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 been highlighting specific cases through a daily “MorningMedicaidMugshot” series that exposes the reality behind the statistics.
The cases are shocking:
- Layth Kamil, a 24-year-old illegal alien from Iraq convicted of exposing himself to a 15-year-old, has received close to $16,000 in taxpayer-funded Medicaid healthcare.
- Haissam Massalkhy, a 45-year-old illegal alien from Lebanon convicted of driving under the influence and killing an American citizen who was out jogging, has received over $30,000 in Medicaid benefits.
- Other recipients include illegal aliens 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 lamented in one of his posts.
These are not abstract policy debates. These are real dollars—earned by American workers, paid in American taxes, and appropriated by Congress for American healthcare needs—being diverted to provide medical care for foreign nationals who not only entered the country illegally but victimized American citizens through violent crime.
The Opportunity Cost
Every dollar spent on healthcare for illegal immigrants is a dollar not spent on American citizens. Medicaid is designed to provide healthcare for vulnerable Americans: low-income families, pregnant women, children, elderly citizens, and people with disabilities. When states divert federal Medicaid funds to cover illegal immigrants, they are directly taking resources away from these vulnerable American populations.
California, despite its massive budget and high tax rates, consistently faces healthcare access challenges for its legal residents. Wait times for specialists are long, rural areas struggle with provider shortages, and many working-class Californians find themselves in coverage gaps. Yet the state government prioritized comprehensive healthcare for illegal immigrants over addressing these systemic problems affecting citizens and legal residents.
The Fiscal Accountability Question: Who Pays?
Federal Law, State Defiance
The Trump administration’s decision to claw back these improperly spent funds raises fundamental questions about federalism, accountability, and the rule of law. When states deliberately violate federal law and misuse federal funds, what are the appropriate consequences?
The answer, for anyone who values fiscal responsibility and constitutional governance, must be clear: states must be held accountable. Federal funds come with federal requirements. States that accept Medicaid dollars agree to use those funds according to federal law. When they violate that agreement, they must face consequences—including repayment of misspent funds.
Governor Newsom’s office has denied that California improperly used federal funds, calling Republican claims “false.” But the CMS audit tells a different story, and the accounting mechanisms identified by policy experts suggest that California has been engaging in sophisticated financial maneuvering specifically designed to access federal dollars for programs that federal law prohibits.
This is not a good-faith disagreement about policy. This is deliberate circumvention of federal law.
The Broader Pattern of Progressive Fiscal Irresponsibility
The Medicaid scandal is not an isolated incident but part of a broader pattern of fiscal recklessness in blue states. These states consistently:
- Expand entitlement programs beyond sustainable levels
- Create unfunded liabilities through generous pension promises
- Increase taxes to unsustainable levels, driving businesses and residents to flee
- Demand federal bailouts when their fiscal chickens come home to roost
California epitomizes this pattern. The state has the highest income tax rates in the nation, yet faces chronic budget deficits. It has expanded government programs aggressively while allowing its infrastructure to crumble. It has created a regulatory environment so hostile to business that major corporations have relocated to other states, taking jobs and tax revenue with them.
Now we learn that, on top of all this, California has been illegally diverting federal healthcare dollars—contributed by taxpayers in all 50 states—to fund a program that federal law explicitly prohibits.
The Conservative Response: Accountability and Reform
Demanding Repayment
The Trump administration is right to demand repayment of every improperly spent dollar. This is not vindictiveness or political retaliation; it is enforcement of federal law and protection of taxpayer dollars.
States that violated federal Medicaid law should face the full consequences of their actions. That means not only repaying the misspent funds but also implementing reforms to ensure compliance going forward. If states continue to violate federal law, the federal government should consider more severe sanctions, including suspension of future Medicaid funding until compliance is assured.
Closing the Loopholes
The fact that states were able to exploit loopholes and accounting provisions to circumvent clear federal prohibitions suggests that Medicaid law needs reform. Congress should close these loopholes, tighten accountability measures, and create more robust enforcement mechanisms.
Federal Medicaid law should be crystal clear: not one dollar of federal money can be used, directly or indirectly, to provide healthcare for illegal immigrants beyond genuine emergency care. No provider taxes that generate federal matching funds should be usable in programs that cover illegal immigrants. No accounting gymnastics should allow states to claim they’re using “only state funds” when federal dollars are flowing into the same pool.
Making the Principled Case
Beyond the immediate scandal, conservatives must make the broader principled case: government’s first obligation is to its own citizens. This is not xenophobia or cruelty; it is basic civic responsibility.
Every nation has the right—indeed, the duty—to prioritize its own citizens’ welfare. A government that provides comprehensive healthcare to foreign nationals who entered illegally while American citizens struggle to access care has fundamentally failed in its basic obligations.
Compassion is a virtue, but it must be balanced with responsibility. True compassion means ensuring that vulnerable Americans receive the care they need before extending benefits to those who have no legal right to be in the country. True compassion means enforcing laws that protect American workers, taxpayers, and communities.
Conclusion: The Stakes Are Clear
The revelation that California and other blue states spent over $1.3 billion in federal Medicaid funds on illegal immigrant healthcare—including healthcare for violent criminals—represents a fundamental breach of trust between state governments and the American people.
This is not a victimless accounting error. Every dollar misspent is a dollar taken from vulnerable Americans who depend on Medicaid. Every dollar diverted to illegal immigrants is a dollar that could have provided care for an elderly citizen, a disabled child, or a low-income family struggling to make ends meet.
The Trump administration’s decision to recover these funds and hold states accountable is not just appropriate—it is essential. Without consequences for lawbreaking, there is no rule of law. Without accountability for fiscal irresponsibility, there is no fiscal discipline.
For conservatives, this scandal reinforces core principles: laws must be enforced, taxpayer dollars must be protected, and government must serve citizens first. These are not radical positions. They are the basic prerequisites of responsible governance.
As this story develops, Americans should watch carefully how their elected officials respond. Do they stand with taxpayers and citizens, or do they defend states that violated federal law to provide benefits to illegal immigrants? Do they demand accountability, or do they make excuses?
The answers will reveal much about who truly represents the interests of the American people.
Call to Action
Demand accountability from your elected officials. Contact your congressional representatives and senators to express support for the Trump administration’s efforts to recover misspent Medicaid funds and close loopholes that allow states to circumvent federal law. Stay informed about how your state manages federal funds—this scandal may be larger than currently known. Share this article with friends and family who care about fiscal responsibility and the rule of law. Support candidates who pledge to prioritize American citizens and enforce immigration laws. And most importantly, vote—in every election, at every level. The future of fiscal accountability and government that serves citizens first depends on engaged, informed voters who demand better from their elected officials.
The billion-dollar question isn’t just whether California will repay these funds. It’s whether Americans will tolerate a system where progressive states can violate federal law, misuse taxpayer dollars, and face no consequences. The answer we give will determine the kind of country we become.
