California’s massive Medicaid spending on illegal immigrants reveals a shocking financial scheme that could leave American taxpayers footing the bill. Gavin Newsom’s administration is using questionable tactics to fund healthcare for undocumented residents while the state faces a growing budget crisis.
At a glance:
• California is spending $8.4 billion this fiscal year on healthcare for illegal immigrants
• The state faces a $6.2 billion Medicaid shortfall that would disappear if it stopped covering undocumented residents
• California uses a “money laundering” scheme to redirect federal funds toward covering illegal immigrants
• Governor Newsom announced a $3.44 billion loan and $2.8 billion raid on the state’s general fund to cover the Medicaid deficit
• Studies suggest the state could be exploiting a legal loophole to obtain over $19 billion in federal funds without state contribution
California’s Medicaid Money Scheme Exposed
California has implemented what critics call a “money laundering” tactic to fund healthcare for illegal immigrants using federal dollars. The scheme involves taxing Medicaid insurers and then returning that money to those same insurers, allowing the state to claim additional federal matching funds without spending state resources. California has a long record of providing benefits to illegal immigrants, at taxpayers’ expense and while the state faces financial crises.
A joint study by the Economic Policy Innovation Center (EPIC) and the Paragon Health Institute reveals nearly $4 billion in state funding is being directed towards healthcare for those illegally in the country. This financing mechanism has expanded welfare coverage while indirectly funding services for illegal migrants.
Budget Crisis Directly Linked to Illegal Immigrant Spending
Governor Gavin Newsom recently announced the need for a $3.44 billion loan and a $2.8 billion raid on the state’s general fund to address a Medicaid shortfall. Analysts point out that the $8.4 billion California spends on healthcare for illegal immigrants accounts for nearly half of the $6.2 billion Medicaid deficit.
The financial maneuvering has led to a surge in Medicaid enrollment, particularly among seniors. In 2024, California’s Legislative Analyst’s Office observed “a sharp increase in Medicaid enrollment among the senior population,” further straining the system.
Republicans Target Loophole for Budget Savings
The Centers for Medicare and Medicaid Services (CMS) approved California’s Medicaid Provider Tax based on a regulatory loophole that Republicans in Congress are now targeting. Closing this loophole could potentially save up to $630 billion.
Even Hillary Clinton once acknowledged the risks of providing benefits to illegal immigrants, stating, “We do not think the comprehensive health care benefits should be extended to those who are undocumented workers and illegal aliens. We do not want to do anything to encourage more illegal immigration into this country.”
The growing evidence suggests that providing taxpayer-funded benefits to those illegally present not only creates unsustainable financial burdens but also incentivizes further illegal immigration.
