Megan Barth writes for the California Globe about an interesting development in the Golden State.
In a major escalation of federal oversight, audits by the Centers for Medicare and Medicaid Services (CMS) under the Trump administration have determined that California must repay more than $1 billion in improperly claimed federal Medicaid funds tied to healthcare for illegal aliens. The findings highlight California’s role as the “biggest culprit” among several blue states—including Illinois, Washington, Oregon, Colorado, and the District of Columbia—that collectively face demands to return $1.35 billion in questioned reimbursements.
The revelation, first highlighted in a Fox News alert on Monday, underscores the ongoing fiscal strain caused by the state’s decision to extend full Medi-Cal coverage to all “undocumented migrants”, a move that has ballooned costs to the near point of fiscal insolvency.
According to the CMS preliminary audit conducted in late 2025, California alone accounts for the lion’s share of $1.35 billion in improper federal reimbursements across several blue states. The audit found that these funds were used to subsidize non-emergency healthcare for non-citizens violating federal restrictions that limit Medicaid reimbursements to emergency services only for non-citizens without satisfactory immigration status.
Fox News reported that the Trump administration, through CMS Administrator Dr. Mehmet Oz, is aggressively pursuing recovery of these funds, labeling the expenditures a “terrifying reality” of taxpayer dollars being diverted to support illegal immigration. Oz’s office emphasized that California was the “biggest culprit,” with over $1 billion in questioned costs, some of which allegedly benefited individuals with violent criminal records.
The California Globe has extensively covered the fiscal fallout from Newsom’s Medi-Cal expansions. In 2022, the governor expanded coverage to undocumented seniors, and by January 2024, the program was opened to all undocumented immigrants regardless of age. This led to a massive enrollment surge, with an estimated 1.7 million non-citizens now on Medi-Cal rolls—representing about 11 percent of total participants. Costs have skyrocketed to nearly $10 billion annually, far exceeding initial projections and contributing to a $6.2 billion Medi-Cal deficit in early 2025.
