Trump Administration Investigates Medicaid Spending on Immigrants in Blue States

SACRAMENTO, Calif. — The Trump administration is taking its immigration crackdown to the well being care security internet, launching Medicaid spending probes in not less than six Democratic-led states that present complete well being protection to poor and disabled immigrants residing within the U.S. with out everlasting authorized standing.

The Facilities for Medicare & Medicaid Providers is scouring funds protecting well being take care of immigrants with out authorized standing to make sure there isn’t any waste, fraud, or abuse, in line with public data obtained by KFF Well being Information and The Related Press. Whereas acknowledging that states can invoice the federal authorities for Medicaid emergency and being pregnant take care of immigrants with out authorized standing, federal officers have despatched letters notifying state well being companies in California, Colorado, Illinois, Minnesota, Oregon, and Washington that they’re reviewing federal and state funds for medical companies reminiscent of pharmaceuticals and specialty care.

The federal company advised the states it’s reviewing claims as a part of its dedication to keep up Medicaid’s fiscal integrity. California is the largest goal after the state self-reported overcharging the federal authorities for well being care companies delivered to immigrants with out authorized standing, decided to be not less than $500 million, spurring the specter of a lawsuit.

“If CMS determines that California is utilizing federal cash to pay for or subsidize healthcare for people with out a passable immigration standing for which federal funding is prohibited by legislation,” in line with a letter dated March 18, “CMS will diligently pursue all obtainable enforcement methods, together with, per relevant legislation, reductions in federal monetary participation and doable referrals to the Legal professional Normal of the USA for doable lawsuit in opposition to California.”

The investigations come because the White Home and a Republican-controlled Congress slashed taxpayer spending on immigrant well being care by means of cuts in President Donald Trump’s spending-and-tax legislation handed this summer season. The administration can be pushing individuals residing within the U.S. with out authorization off Medicaid rolls. Well being coverage specialists say these strikes may hamper care and go away security internet hospitals, clinics, and different suppliers financially weak. Some Democratic-led states — California, Illinois, and Minnesota — have already needed to finish or slim down their Medicaid applications for immigrants on account of ballooning prices. Colorado can be contemplating cuts on account of price overruns.

On the similar time, 20 states are pushing again on Trump’s immigration crackdown by suing the administration for handing over Medicaid information on hundreds of thousands of enrollees to deportation officers. A federal choose quickly halted the transfer. California’s legal professional normal, Rob Bonta, who led that problem, says the Trump administration is launching a political assault on states that embrace immigrants in Medicaid applications.

“The entire concept that there’s waste, fraud, and abuse is contrived,” Bonta stated. “It’s manufactured. It’s invented. It’s a catchall phrase that they use to justify their predetermined anti-immigrant agenda.”

Trump Targets Immigrants

Immigrants missing everlasting authorized standing aren’t eligible to enroll in complete Medicaid protection. Nonetheless, states invoice the federal authorities for emergency and being pregnant care offered to anybody.

Fourteen states and Washington, D.C., expanded their Medicaid applications with their very own funds to cowl low-income youngsters with out authorized standing. Seven of these states, plus Washington, D.C., have additionally offered full-scope protection to some grownup immigrants residing within the nation with out authorization.

The Trump administration seems to be concentrating on solely states with full Medicaid protection for each youngsters and adults with out authorized standing. Utah, Massachusetts, and Connecticut, which offer Medicaid protection solely to immigrant youngsters, haven’t obtained letters, as an example. CMS declined to offer a full listing of states it’s concentrating on.

Federal officers say it’s their authorized proper and accountability to scrutinize states for misspending on immigrant well being protection and are taking “decisive motion to cease that.”

“It’s a matter of nationwide concern that some states have pushed the boundaries of Medicaid legislation to supply in depth advantages to people unlawfully current in the USA,” CMS spokesperson Catherine Howden stated concerning the company’s probe of chosen states. The oversight is meant to “guarantee federal funds are reserved for legally eligible people, not for political experiments that violate the legislation,” she stated.

Well being coverage researchers and economists say offering Medicaid protection to immigrants for preventive companies and therapy of power well being situations staves off extra pricey take care of sufferers down the street. It additionally tamps down insurance coverage premium will increase and the quantity of uncompensated take care of hospitals and clinics.

Francisco Silva, president and CEO of the California Main Care Affiliation, stated the Trump administration is threatening to drive up well being care prices and make it tougher to entry care.

“The affect is emergency rooms would get so crowded that ambulances need to be diverted away and folks in an actual emergency can’t get into the hospital, and public well being threats like illness outbreaks,” Silva stated.

California has taken a health-care-for-all strategy, offering protection to 1.6 million immigrants with out authorized standing. The growth, which was rolled out from 2016 to 2024, is estimated to price $12.4 billion this yr. Of that, $1.3 billion is paid by the federal authorities for emergency and pregnancy-related care.

As California rolled out its growth, the state erroneously billed the federal authorities for care offered to immigrants with out authorized standing — particulars that haven’t beforehand been reported and that former state officers shared with KFF Well being Information and the AP. The state improperly billed for companies reminiscent of psychological well being and habit companies, pharmaceuticals, and dental care.

Jacey Cooper, who served as California’s Medicaid director from 2020 to 2023, stated she found the error and reported it to federal regulators. Cooper stated the state had been working to pay again not less than $500 million recognized by the federal authorities.

“As soon as I recognized the issue, I believed it was actually necessary to report it and we did,” Cooper stated. “We take waste, fraud, and abuse very severely.”

It’s not clear whether or not that cash has been repaid. The state’s Medicaid company says it doesn’t understand how CMS calculated the overpayments or “what’s included in that quantity, what time interval it covers, and if or when it was collected,” stated spokesperson Tony Cava.

California has an enormously difficult Medicaid program: It serves the biggest inhabitants within the nation — almost 15 million individuals — with a price range of almost $200 billion this fiscal yr.

Matt Salo, a nationwide Medicaid professional, stated some of these errors occur in states all through the nation as a result of this system is rife with overlapping federal and state guidelines. Salo and different coverage analysts agreed that states have the authority to manage their Medicaid applications as they see match and root out misuse of federal funds.

And Michael Cannon, director of well being coverage research on the libertarian Cato Institute, stated the Trump administration’s actions “persecute a minority that’s unpopular with the powers that be.”

“The Trump administration can’t preserve that this effort has something to do with sustaining the fiscal integrity of the Medicaid program,” Cannon stated. “There are a lot larger threats to Medicaid’s fiscal integrity, that that argument simply doesn’t wash.”

Immigrants’ Medicaid Beneath Assault

Nationwide Republicans have focused well being spending on immigrants in several methods. The GOP spending legislation, which Trump calls the “One Massive Lovely Invoice,” will decrease reimbursement to states across the nation in October 2026. In California, for instance, federal reimbursement for immigrants with out authorized standing will go to 50% for emergency companies, down from 90% for the Medicaid growth inhabitants, in line with Cava.

The Trump administration can be scaling again Medicaid protection to immigrants with short-term authorized standing who have been beforehand lined and introduced in August that it could present states with month-to-month stories stating enrollees whose authorized standing couldn’t be confirmed by the Division of Homeland Safety.

“Each greenback misspent is a greenback taken away from an eligible, weak particular person in want of Medicaid,” CMS Administrator Mehmet Oz stated in an announcement. “This motion underscores our unwavering dedication to program integrity, safeguarding taxpayer {dollars}, and making certain advantages are strictly reserved for these eligible underneath the legislation.”

States underneath overview say they’re following the legislation.

“Spending cash on a congressionally licensed medical profit program that helps individuals get emergency remedies for most cancers, dialysis, and anti-rejection medicines for organ transplants is decidedly not waste, fraud and abuse,” stated Mike Faulk, deputy communications director for Washington state Legal professional Normal Nick Brown.

Data present Washington Medicaid officers have been inundated with questions from CMS about federal funds protecting emergency and being pregnant take care of immigrants with out authorized standing.

Emails present Illinois officers met with CMS and sought an extension to share its information. CMS denied that request and federal regulators advised the state that its funding might be withheld.

“1000’s of Illinois residents depend on these applications to lawfully search vital well being care with out worry of deportation,” stated Melissa Kula, a spokesperson for the Illinois Division of Healthcare and Household Providers, noting that any federal lower could be “not possible” for the state to backfill.

Shastri reported from Milwaukee.

The Related Press Well being and Science Division receives assist from the Howard Hughes Medical Institute’s Division of Science Training and the Robert Wooden Johnson Basis. The AP is solely liable for all content material.

This text was produced by KFF Well being Information, which publishes California Healthline, an editorially unbiased service of the California Well being Care Basis. 

KFF Well being Information is a nationwide newsroom that produces in-depth journalism about well being points and is without doubt one of the core working applications at KFF—an unbiased supply of well being coverage analysis, polling, and journalism. Study extra about KFF.

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