A new study claims that California is using billions of federal taxpayer dollars to cover healthcare costs for illegal immigrants.
Paul Winfree, president and CEO of the Economic Policy Innovation Center (EPIC), told Fox News Digital that California is taking advantage of a legal loophole to fund Medicaid for illegal immigrants.
According to Winfree, California uses provider taxes to generate funds that are then reimbursed by the federal government.
This results in nearly $4 billion in state funding for illegal immigrants’ healthcare and other programs, but the money is coming from federal reimbursements.
A report from EPIC and the Paragon Health Institute claims that this setup allows California to gain over $19 billion in federal funds from April 2023 to December 2026 without any state financial contribution.
The report accuses California of collaborating with insurance companies covering Medicaid beneficiaries to create a “money laundering scheme” that enriches insurers and increases the federal debt.
Winfree suggested that closing this loophole could save up to $630 billion, which Republicans are considering as they aim to cut between $1.5 trillion and $2 trillion in spending to support former President Donald Trump’s budget goals.
The House and Senate Republicans are working on a major budget reconciliation bill covering border security, defense, energy, and tax policies, which could pass with a simple majority.
The Energy and Commerce Committee, responsible for Medicaid and Medicare oversight, has been directed to find $880 billion in spending cuts.
Republicans argue that they are targeting waste and abuse, but Democrats claim the cuts will reduce medical benefits for millions of Americans.
Winfree said that while fully closing the loophole is unlikely, reducing the amount of “gaming” through provider taxes could still save billions.
He noted that reforms would likely impact blue states more than red states since blue states have pushed the limits of these tax strategies.
California’s Department of Healthcare Services dismissed the report as “misleading” and encouraged people to visit their website for accurate information.
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