Audit Reveals Over $1B Medicaid Funds Spent on Illegal Immigrants in Multiple States

An audit by the Centers for Medicare & Medicaid Services (CMS) revealed that over $1 billion in Medicaid funds were spent on illegal immigrants, with California alone accounting for $1.3 billion in 2024 and 2025. CMS Administrator Dr. Oz emphasized the urgency of recovering these funds and pointed out that several states, including California, Colorado, Illinois, Oregon, Washington, and D.C., improperly used federal tax dollars for Medicaid coverage of illegal immigrants, some with criminal records. Dr. Oz framed this issue as a priority under the Trump Administration, highlighting taxpayer concerns about Medicaid misuse. Meanwhile, a report on Medicaid home and community-based services (HCBS) warns that proposed funding cuts could lead to significantly higher costs and unmet care needs, potentially costing states like California over $1 billion in additional expenses over five years due to increased nursing facility care. The HCBS cuts pose a risk amid existing capacity shortages in nursing facilities, which could exacerbate the state's healthcare challenges. The combined insights reveal tensions between Medicaid budget management, illegal immigrant coverage, and the potential negative impacts of proposed program cuts on vulnerable populations.