Key Trump agency vows to claw back over $1B benefitting illegals in blue states: ‘Won’t tolerate it’

FIRST ON FOX: The Trump administration is planning to claw back over $1 billion in federal Medicaid dollars they say are being spent by blue states on healthcare for illegal immigrants, including some with violent criminal records for murder and rape.

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While federal Medicaid dollars are supposed to be prohibited broadly from being used to cover healthcare for illegal immigrants, they can be used by states for emergency treatment regardless of a patient’s citizenship or immigration status. States can also legally cover health insurance for illegal immigrants, so long as it is only done with state tax dollars. But, according to some experts, Democrats are utilizing loopholes in the federal laws that allow them to provide comprehensive health benefits to illegal immigrants.

“Protecting Medicaid from waste, fraud, and abuse isn’t optional—it’s the law. Every dollar misspent on illegal health care spending is a dollar taken from vulnerable Americans,” CMS spokesperson Emily Hilliard, told Fox News Digital. “Federal law forbids using Medicaid funds for illegal immigrants, yet several Democrat-led states did it anyway. The Trump Administration won’t tolerate it. CMS is auditing aggressively, recovering every dollar, and holding states accountable.”

One day after the current government shutdown, the Trump administration released a memo arguing Democrats want to repeal GOP reforms in the “big, beautiful bill” that aimed to close alleged backdoor loopholes allowing blue states to use federal dollars to pay for illegal immigrant healthcare. (Getty/iStock)

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California Gov. Gavin Newsom’s office has denied claims that his state is improperly using federal funds to pay for illegal immigrant healthcare, telling the Los Angeles Times that these claims from Republicans are “false.”

But, Steve Hilton, a former Fox News anchor and current Republican candidate running to be the next Governor of California after Newsom is term-limited out, has argued that California has been using a complex Medicaid provision known as a “provider tax” to obtain matching federal dollars, which then gets pooled into the money used by the state to pay for its healthcare offered to undocumented immigrants. Meanwhile, Chris Pope, a public health policy expert at the Manhattan Institute, has argued California is abusing federal provisions that allow states to use federal Medicaid dollars for emergency care for undocumented aliens.

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Jim O’Neill, the current Acting Director of the Centers for Disease Control and Prevention and a Deputy Secretary at the Health and Human Services Department, has also been highlighting that among the federal funds that are improperly going to illegal immigrants, some are even going to illegal immigrants with violent criminal pasts. O’Neill has been posting a daily “MorningMedicaidMugshot” with examples over the last several days.

Federal agents detain a person after attending a court hearing at the Jacob K. Javitz Federal Building on July 1, 2025 in New York City, United States. (Mostafa Bassim/Anadolu)

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Other illegal aliens O’Neill highlighted included folks convicted of attempted murder and child rape.

“Democrats are demanding continued funding of this violent illegal alien’s Medicaid as a condition for reopening the government and paying the hardworking public servants at my department,” O’Neill lamented in one of his recent “MorningMedicaidMugshot” posts.

* Original Article:

https://www.foxnews.com/politics/key-trump-agency-vows-claw-back-over-1b-benefitting-illegals-blue-states