Sep 5, 2025
The Centers for Medicare & Medicaid Services told several states it is reviewing claims as part of its commitment to maintain Medicaid’s fiscal integrity. California is the biggest target of CMS’ investigation.
A woman and her 16-month-old son wait to see a doctor at a CommuniCare+OLE clinic in Davis, California, on June 26.(AP PHOTO/GODOFREDO A. VÁSQUEZ/Creative Commons license for single use)
By Angela Hart and Devi Shastri, The Associated Press
SACRAMENTO, Calif. — The Trump administration is taking its immigration crackdown to the health care safety net, launching Medicaid spending probes in at least six Democratic-led states that provide comprehensive health coverage to poor and disabled immigrants living in the U.S. without permanent legal status.
The Centers for Medicare & Medicaid Services is scouring payments covering health care for immigrants without legal status to ensure there isn’t any waste, fraud, or abuse, according to public records obtained by KFF Health News and The Associated Press.
While acknowledging that states can bill the federal government for Medicaid emergency and pregnancy care for immigrants without legal status, federal officials have sent letters notifying state health agencies in California, Colorado, Illinois, Minnesota, Oregon, and Washington that they are reviewing federal and state payments for medical services such as prescription drugs and specialty care.
The federal agency told the states it is reviewing claims as part of its commitment to maintain Medicaid’s fiscal integrity. California is the biggest target after the state self-reported overcharging the federal government for health care services delivered to immigrants without legal status, determined to be at least $500 million, spurring the threat of a lawsuit.
Enforcement Actions
“If CMS determines that California is using federal money to pay for or subsidize healthcare for individuals without a satisfactory immigration status for which federal funding is prohibited by law,” according to a letter dated March 18, “CMS will diligently pursue all available enforcement strategies, including, consistent with applicable law, reductions in federal financial participation and possible referrals to the Attorney General of the United States for possible lawsuit against California.”
The investigations come as the White House and a Republican-controlled Congress slashed taxpayer spending on immigrant health care through cuts in President Donald Trump’s spending-and-tax law passed this summer. The administration is also pushing people living in the U.S. without authorization off Medicaid rolls. Health policy experts say these moves could hamper care and leave safety net hospitals, clinics, and other providers financially vulnerable. Some Democratic-led states — California, Illinois, and Minnesota — have already had to end or slim down their Medicaid programs for immigrants due to ballooning costs. Colorado is also considering cuts due to cost overruns.
At the same time, 20 states are pushing back on Trump’s immigration crackdown by suing the administration for handing over Medicaid data on millions of enrollees to deportation officials. A federal judge temporarily halted the move. California’s attorney general, Rob Bonta, who led that challenge, says the Trump administration is launching a political attack on states that embrace immigrants in Medicaid programs.
‘Anti-Immigrant Agenda’
“The whole idea that there’s waste, fraud, and abuse is contrived,” Bonta said. “It’s manufactured. It’s invented. It’s a catchall phrase that they use to justify their predetermined anti-immigrant agenda.”
Immigrants lacking permanent legal status are not eligible to enroll in comprehensive Medicaid coverage. However, states bill the federal government for emergency and pregnancy care provided to anyone.
Fourteen states and Washington, D.C., expanded their Medicaid programs with their own funds to cover low-income children without legal status. Seven of those states, plus Washington, D.C., have also provided full-scope coverage to some adult immigrants living in the country without authorization.
Funding Oversight
The Trump administration appears to be targeting only states with full Medicaid coverage for both kids and adults without legal status. Utah, Massachusetts, and Connecticut, which provide Medicaid coverage only to immigrant children, have not received letters, for instance. CMS declined to provide a full list of states it is targeting.
Federal officials say it is their legal right and responsibility to scrutinize states for misspending on immigrant health coverage and are taking “decisive action to stop that.”
“It is a matter of national concern that some states have pushed the boundaries of Medicaid law to offer extensive benefits to individuals unlawfully present in the United States,” CMS spokesperson Catherine Howden said about the agency’s probe of selected states. The oversight is intended to “ensure federal funds are reserved for legally eligible individuals, not for political experiments that violate the law,” she said.
Driving Up Health Care Costs
Health policy researchers and economists say providing Medicaid coverage to immigrants for preventive services and treatment of chronic health conditions staves off more costly care for patients down the road. It also tamps down insurance premium increases and the amount of uncompensated care for hospitals and clinics.
Francisco Silva, president and CEO of the California Primary Care Association, said the Trump administration is threatening to drive up health care costs and make it more difficult to access care.
“The impact is emergency rooms would get so crowded that ambulances have to be diverted away and people in a real emergency can’t get into the hospital, and public health threats like disease outbreaks,” Silva said.
California has taken a health-care-for-all approach, providing coverage to 1.6 million immigrants without legal status. The expansion, which was rolled out from 2016 to 2024, is estimated to cost $12.4 billion this year. Of that, $1.3 billion is paid by the federal government for emergency and pregnancy-related care.
As California rolled out its expansion, the state erroneously billed the federal government for care provided to immigrants without legal status — details that have not previously been reported and that former state officials shared with KFF Health News and the AP. The state improperly billed for services such as mental health and addiction services, prescription drugs, and dental care.
Jacey Cooper, who served as California’s Medicaid director from 2020 to 2023, said she discovered the error and reported it to federal regulators. Cooper said the state had been working to pay back at least $500 million identified by the federal government.
Read the full story at: KFFHealthNews
Shastri reported from Milwaukee.
The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.
This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.
