Trump Admin Probes Medicaid Spending in 6 Democratic States

The Trump administration has initiated investigations into Medicaid expenditures in at least six Democratic-led states—California, Colorado, Illinois, Minnesota, Oregon, and Washington—for providing health coverage to immigrants without permanent legal status. The Centers for Medicare and Medicaid Services (CMS) is examining payments for emergency and pregnancy care to detect waste, fraud, or abuse, according to records obtained by KFF Health News and The Associated Press. CMS has notified these states of reviews on claims for services like prescription drugs and specialty care, emphasizing fiscal integrity.

California faces the most scrutiny after self-reporting overcharges of at least $500 million, prompting threats of federal enforcement, including reduced funding or lawsuits. A March 18 CMS letter warned of pursuing all strategies if federal funds are misused for prohibited immigrant care. This aligns with broader White House efforts, including summer spending cuts on immigrant health and pushing undocumented individuals off Medicaid rolls, potentially straining safety-net providers.

Health experts warn these moves could disrupt care and burden hospitals and clinics financially. States like California, Illinois, and Minnesota have already scaled back immigrant Medicaid programs due to rising costs, with Colorado considering similar cuts. Meanwhile, 20 states, led by California Attorney General Rob Bonta, are suing to block the administration from sharing Medicaid data with deportation officials—a move temporarily halted by a judge. Bonta labeled the probes a "manufactured" anti-immigrant agenda.

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CMS defends the scrutiny as a legal duty to reserve funds for eligible individuals, targeting states offering full-scope coverage to undocumented adults and children. States like Utah, providing only child coverage, are unaffected. The investigations highlight tensions over immigration policy, with CMS spokesperson Catherine Howden criticizing states for "political experiments" violating law. Health policy analysts note benefits of preventive care for immigrants but warn of economic fallout. 

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