California Caught Funneling Over $1.3 Billion in Federal Taxpayer-Funded Healthcare to Illegal Aliens

President Donald Trump’s administration has ordered California and a coalition of deep-blue states to repay more than $1.3 billion after a sweeping federal audit uncovered widespread misuse of Medicaid funds to provide non-emergency health care to illegal aliens, in direct violation of federal law.

According to findings highlighted on Fox News, the audits, led by Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz, determined that multiple states improperly billed the federal government for routine and elective medical services that are explicitly barred under Medicaid rules.

Under federal law, Medicaid funds may be used to cover emergency medical services only for illegal immigrants.

All non-emergency care must be paid for by the states themselves.

The audit found that standard care, not emergencies, was billed to taxpayers.

California Accounts for the Vast Majority

Assistant U.S. Attorney Bill Essayli, of the Central District of California, said the audit revealed massive financial abuse.

“California must return more than $1 billion to the federal government after an audit by Dr. Oz and his team uncovered federal dollars being spent on healthcare for illegal immigrants,” Essayli wrote on X.

“We are teaming up to combat healthcare fraud so the money can be used for American citizens who need it!”

Federal auditors calculated nearly $1.4 billion owed back to taxpayers, with California responsible for the overwhelming share:

• California: ~$1.3 billion
• New York: ~$30.7 million
• Illinois: ~$29.8 million
• Minnesota: ~$12.7 million
• Oregon: ~$5.4 million
• Washington: ~$2.3 million
• Washington, D.C.: ~$2.1 million
• Colorado: ~$1.5 million
• Total: ~$1.394 billion

Auditors concluded that these funds were billed for routine medical care, not emergency services, an explicit violation of Medicaid requirements.

States Deny, Audit Says Otherwise

California officials denied wrongdoing, claiming the state “routinely reimburses” the federal government.

However, auditors said the records do not support that claim, and the improper billing had already occurred.

The findings directly challenge years of state-level assurances that federal funds were being handled lawfully.

WATCH:

Newsom’s Policy in the Spotlight

The audit places renewed scrutiny on California Gov. Gavin Newsom.

The Democrat governor has openly championed “universal healthcare regardless of immigration status” and expanded taxpayer-funded care to the state’s entire illegal alien population.

The Trump administration has argued that such policies amount to states shifting their political priorities onto federal taxpayers, often without authorization.

Officials say the enforcement action underscores the administration’s broader effort to rein in federal spending abuses, enforce immigration-related statutes, and ensure that limited Medicaid resources are reserved for American citizens and legal residents.

Further recovery efforts and potential enforcement actions are expected as audits continue.

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