HHS to Begin Auditing States Funding Health Care for Immigrants

The Trump administration will begin a crackdown to ensure states aren’t using federal Medicaid dollars to provide health coverage to undocumented immigrants.

The Centers for Medicare & Medicaid Services will begin “ramping up financial oversight” to identify and deter states from diverting federal funds to immigrants who are otherwise ineligible for federally subsidized coverage, the agency said in a letter to Medicaid agencies Tuesday.

As of April 2024, fourteen states and the District of Columbia claim to provide comprehensive state-funded coverage for undocumented children. Seven states, including California, Illinois, and New York, go a step further, extending a state-funded health benefit to income-eligible adults regardless of immigration status, according to KFF.

As part of its oversight of these programs, the CMS will begin focused evaluations of select state Medicaid spending reports to ensure federal funds are not used as a “backdoor pathway to subsidize open borders,” CMS Administrator Mehmet Oz said in a press release.

Oversight will also include in-depth reviews of select states’ financial management systems and assessments of existing eligibility rules and policies to close loopholes and strengthen enforcement.

The moves come in response to President Donald Trump’s executive order on “Ending Taxpayer Subsidization of Open Borders.”

The CMS said it’s calling on all states to immediately examine and update their internal policies to ensure full compliance with federal law.

States found to be improperly spending federal dollars on noncitizens will be subject to recoupment of the federal share, the release said.

“States have a duty to uphold the law and protect taxpayer funds. We are putting them on notice—CMS will not allow federal dollars to be diverted to cover those who are not lawfully eligible,” Oz said.