California to pay billions in Medicaid for illegal immigrant care

California is funneling billions of federal taxpayer dollars to pay for health care for illegal immigrants, a study by the Economic Policy Innovation Center (EPIC) revealed.

According to paper published by EPIC and the Paragon Health Institute, U.S. states can tax providers to funnel money back into their coffers, which they then use to fund the inclusion of illegal immigrants on Medicaid.

The investigation draws a line between taxes on California Medicaid providers and what, officially, are listed as nearly $4 billion in state funding earmarked for illegal immigrant health care and other similar initiatives.

However, that funding comes from the federal government, EPIC says, through reimbursements to California.

"The state of California, in collusion with the insurance companies that cover Medicaid recipients, has created one of the most outrageous schemes to date: a money laundering scheme that has resulted in California obtaining more than $19.billion in federal funds without any state contribution during the period from April 2023 to December 2026," says the study signed by Paul Winfree, president and CEO of EPIC, and Brian Blase, president of the Paragon Health Institute.

The law, the states and Medicaid.

Under current law, states are required to pay Medicaid providers the same amount as taxes collected. The federal government then matches those payments at 60%, to help states recover some Medicaid costs.

Medicaid spending is supposed to be jointly funded by the federal government and the states. Increasingly, however, states are designing "money laundering" schemes with this health insurance - created by the White House to cover low-income Americans - that result in huge federal expenditures without any state financial obligations, the study states.

The text adds that these funds were used to implement major expansions in the Medicaid program to finance illegal immigrants and long-term care (LTC) for the wealthy.

"This plan enriches insurers, attracts illegal immigrants to the United States, and adds mountains to the federal debt, all at the expense of American workers," they note.

Ending that "loophole" that allows states like California to significantly increase the provider tax could save as much as $630 billion.

California's health insurance debt explodes.

As a result, the state of California must borrow $3.44 billion to cover a shortfall in Medi-Cal, the state's Medicaid program, one year after expanding it to provide free health care to illegal immigrants.

That's the maximum amount California can borrow, and it will only be enough to cover Medi-Cal bills through the end of the month.

Gov. Gavin Newsom had boasted of the budget deal that made such a drastic offer possible: "With these new investments, California will become the first state to achieve universal access to health coverage," he said in a statement in June 2022.

Days earlier, the governor himself launched a podcast to interview conservatives, which he uses to claim that California is better run than Republican states like Florida.

Newsom also recently signed a bill to spend $50 million to fight Trump administration policies.