The Illegal-Immigrant Burden on Medicaid and Tax-Subsidized Care Is Growing

T he Medicaid program, originally designed as a safety net for the most vulnerable Americans, has ballooned into the largest public-welfare program in the United States, costing American taxpayers more than $825 billion annually. Alarmingly, its improper payment rate exceeds 15 percent, representing approximately $100 billion in misspending each year. With 80 million people on Medicaid and CHIP — approximately one in four Americans — the program is already strained to its breaking point. Nationally, the U.S. has fewer than two American taxpayers supporting each Medicaid recipient, a precarious ratio that highlights how unsustainable this system has become.

The Biden-Harris administration’s leniency toward illegal immigrants gaining access to Medicaid and public assistance will only make this worse. A recent Fox News op-ed by Hayden Dublois of the Foundation for Government Accountability (FGA) reveals that millions of illegal immigrants have been given an on-ramp to Medicaid through a series of administrative loopholes, and weakened eligibility verification. These, coupled with state-only Medicaid spending for illegal immigrants, will not only burden American taxpayers with billions in additional costs but also put pressure on U.S. hospitals, some of which have already been forced to close because of financial strain. The Centers for Medicare and Medicaid Services (CMS) reported that total federal Medicaid costs for noncitizens amounted to over $7 billion in 2021 and $5.4 billion in 2022.

A significant contributor to rising health-care costs is the ongoing border crisis. According to the Fox News op-ed, the number of illegal immigrants enrolled in state Medicaid programs in nine states, including Texas, Missouri, and Pennsylvania, increased by 500 percent between 2019 and 2023. This issue is worsened by federal requirements that require states to provide emergency Medicaid services to illegal immigrants who meet income-eligibility standards. In states such as California and New York, these services have expanded further, allowing illegal immigrants to enroll in full Medicaid benefits, which adds billions to health-care expenses. While federal law generally prohibits illegal immigrants from enrolling in Medicaid or purchasing coverage under Obamacare, some states have bypassed this restriction by independently offering full Medicaid benefits to undocumented individuals. In California alone, more than 700,000 undocumented immigrants are now receiving taxpayer-funded Medicaid coverage, with costs estimated at approximately $4 billion annually, a figure that could grow as more states adopt similar policies.

What is most troubling is how the Biden administration’s policies have made this problem worse. Traditionally, states checked an applicant’s citizenship status using federal sources such as Social Security data. If there is a mismatch, however, states are forced to give individuals a 90-day “reasonable opportunity period” to provide documentation verifying their eligibility for Medicaid. According to updated federal restrictions enacted by the CMS in 2024, states “may not limit the number of reasonable opportunity periods an individual may receive.” This change means that if there is an initial mismatch, states must continue granting any applicant additional 90-day periods without limit, creating the potential for indefinite delays in determining Medicaid eligibility.

These policies lead to several challenges, including prolonged access to Medicaid benefits for individuals who may not qualify, concerns about misuse and fraud as some exploit this loophole, increased administrative burdens on state Medicaid offices, and added strain on health-care resources. Financial implications are also significant, with costs accruing to taxpayers as Medicaid insurers are paid risk premiums for ineligible recipients. Further, because Medicaid coverage is retroactive, taxpayer money spent on benefits for ineligible immigrants cannot feasibly be recovered, as legal avenues to pursue repayment are prohibitively costly and complex. Insurers — motivated by profit — have an interest in continuing these payments, while providers face pressure to reduce the number of Medicaid patients they see, which may limit access for eligible U.S. citizens and lawful residents who rely on the system.

The problem is catching the attention of governors. Under a fiscal year 2024 comprehensive immigration bill signed by Florida governor Ron DeSantis, hospitals accepting Medicaid are now required to inquire about patients’ legal status upon admission or in the emergency room. And in August, Texas governor Greg Abbott ordered hospitals to report costs of illegal-immigrant health care, putting the blame for increased costs squarely on the shoulders of the Biden-Harris administration’s border policies.

The solution to this crisis lies in strong, decisive reforms. First, the president must restore strict verification systems for Medicaid eligibility and halt the extension of reasonable opportunity periods for illegal immigrants. Social Security “no match” letters, which flagged discrepancies between worker information and federal records, must also be reinstated to prevent illegal immigrants or anyone ineligible from utilizing in Medicaid. States, too, must step up and close loopholes that allow illegal immigrants to take advantage of health-care systems funded by American taxpayers.

The math is clear: With fewer American taxpayers supporting a growing population of Medicaid recipients and an unchecked influx of illegal immigrants, the system will become unsustainable and erode America’s safety net for the most vulnerable.