Democrats ARE spending money on healthcare for illegal migrants — in California, it’s $6.4 billion

Last week, Vice President J.D. Vance tweeted: “Democrats are about to shut down the government because they demand we fund healthcare for illegal aliens.”

Democrats and the media bristled. That wasn’t true, Sen. Patty Murray (D-Wash) protested: “Undocumented immigrants are not eligible to enroll in federally funded health coverage under existing law or Democrats’ funding proposal.”

Liberal fact-checkers argued that Medicaid subsidies for emergency care were trivial, and did not count as health coverage.

But their “fact checks” are just semantics.

In fact, last year, nationwide Medicaid spending on “emergency care for undocumented aliens” almost tripled — because the state of California used it as a method of laundering federal money to fund a comprehensive health benefit for its unauthorized residents.

Medicaid is an enormously lucrative program for states.

It gives them between $1 and $9 for every $1 they spend on health care benefits for eligible low-income Americans, without any upper limit.

Illegal immigrants are supposed to be prohibited from receiving Medicaid, as they are from obtaining Medicare and Obamacare subsidies — but an exception to this is that states may claim federal Medicaid funding for hospitals to provide “emergency care” for unauthorized immigrants.

CNN’s fact-checker plays down this provision, noting: “Less than 1% of total Medicaid spending went toward emergency Medicaid for undocumented immigrants in fiscal year 2023.”

Yet this exception has quickly become a significant loophole.

From 2023 to 2024, Medicaid spending on “Emergency Services for Undocumented Aliens” suddenly soared from $3.8 billion to $9.1 billion.

This wasn’t due to the economy or changes in healthcare costs. In 49 states, in fact, emergency Medicaid spending declined.

The surge in this expenditure was entirely due to the state of California, where spending suddenly leaped from $1.6 billion to $6.4 billion.

The federal government is supposed to cover 50% of California’s Medicaid costs — but Washington paid for 70% of the state’s Medicaid ESUA expenditures in 2024.

What happened?

In 2024, California became the first state to offer comprehensive health insurance to all undocumented immigrants.

The program now covers 1.6 million people at a cost of $8.5 billion per year.

This benefit was supposed to be paid for with state-only funds, but California has taken advantage of Medicaid’s open-ended payment structures to shift the cost to the federal government.

The state claimed $4.8 billion of increased Medicaid expenditures as “emergency services for undocumented aliens” — 56% of the cost of the eligibility expansion.

For context, emergency care normally accounts for only 5% of health care spending.

This is not the only way California made the feds pay for the new benefit: The state also imposed a tax on insurers to increase the cost of covering legitimate Medicaid beneficiaries.

That allowed it to claim $5 billion in federal revenues as “state funds,” which could be used to extend healthcare benefits to immigrants supposedly excluded from Medicaid.

Six other states, including New York, provide comprehensive health benefits to illegal immigrant adults — although they have not yet been so brazen about claiming federal funds for the purpose.

This summer’s One Big Beautiful Bill Act only trimmed the matching rates which states can claim for Medicaid ESUA benefits.

That will reduce the share of California’s costs borne by federal taxpayers from 70% to 50%. The Trump administration may also be able to withhold matching funds for expenditures which are inappropriately categorized as “emergency care.”

But a deeper problem remains: The enormous and open-ended discretion Medicaid gives states to claim federal funding makes it hard for the feds to ensure that the program’s expenditures are reserved for its intended purposes.

Until that changes, the Democratic claim that federal money isn’t being used on illegal immigrants is simply not true.

Chris Pope is a senior fellow at the Manhattan Institute.