Red States Are Paying For California’s Illegal Aliens’ Health Care

In 2024, California Gov. Gavin Newsom proudly made California the first state to offer medical care for people who entered the country illegally and reside in the Golden State. However, the cost, estimated at almost $8 billion, is being paid by all taxpayers, not just Californians.

Do people in Texas, North Carolina, and hyper-taxed Illinois want to fund California’s 700,000 illegal immigrants? They don’t have a choice. Newsom is using Medi-Cal, California’s Medicaid safety net program, and the federal government matches the state’s funding, using American taxpayers’ money. Yet illegal immigrants are prohibited by the 1996 Personal Responsibility and Work Opportunity Reconciliation Act from enrolling in Medicaid.

All state Medicaid programs are funded jointly by the state and federal government using a formula called Federal Medical Assistance Percentage (FMAP). Poorer states such as New Mexico and Mississippi get as much as three federal dollars for every one they budget, while rich states like California get one federal dollar for every state dollar.

The FMAP formula provides an incentive for states to increase spending because as they spend more state dollars, they get more dollars from taxpayers nationally.

Newsom is budgeting $42 billion for Medi-Cal in 2025-26.

In Newsom’s budget estimate last year, the cost of insuring illegal immigrants was estimated at $6.5 billion, but it has been revised to $9.5 billion “and is expected to grow even higher,” according to the L.A. Times. In fact, Newsom is now seeking a loan of an additional $3.4 billion to cover the increased costs.

By law and Centers for Medicare and Medicaid Services (CMS) rules, illegal immigrants are prohibited from enrolling in Medicaid or Children’s Health Insurance Program (CHIP). By allowing illegal immigrants to enroll, Newsom directly contravenes federal rules and takes matching Medicaid funds that he should not. He acquires the money in several fraudulent ways.

Paul Winfree of Economic Policy Innovation Center and Brian Blase of Paragon Health Institute recently exposed a money laundering scheme that Newsom uses. California put a tax on insurers that increases “costs” to Medi-Cal. This forced Washington to contribute more taxpayer dollars to California. The state then approves higher rates for the insurance companies, which compensates them for the additional tax. California gains federal dollars. The only losers are taxpayers and the rule of law.

Another Newsom scheme involves having Medi-Cal pay for long-term care insurance for wealthy donors, according to Winfree and Blase. Newsom canceled the asset test that would prohibit rich individuals from qualifying for such insurance. He then uses “laundered” Medi-Cal funds to pay the additional insurance premiums.