Dr. Oz: States Spending Medicaid Funds on Illegal Immigrants ‘Worse Than We Thought’

The Centers for Medicare and Medicaid Services is withholding $300 million from California over alleged unlawful Medicaid spending.

Dr. Mehmet Oz testifies during a confirmation hearing before the Senate Finance Committee in Washington on March 14, 2025. Anna Moneymaker/Getty Images

The Centers for Medicare and Medicaid Services (CMS) has uncovered more Medicaid funds unlawfully spent on health care for illegal immigrants, reaching $1.8 billion in eight states, Administrator Dr. Mehmet Oz announced on Jan. 14.

“It’s worse than we thought,” Oz posted on X.

Spending federal Medicaid funds on non-emergency health care for illegal immigrants is against the law, according to CMS.

If states use their own money to do it, the states need to document the spending to prove that federal dollars were not used to fund the services, Oz said.

“These states failed to provide that for this $1.8 billion,” Oz stated.

“So today, CMS is announcing that we’re withholding nearly $300 million from California—which is by far the worst offender—until they demonstrate to our satisfaction that they’re spending that money properly,” Oz said.

California Gov. Gavin Newsom’s office did not immediately return a request for comment about the withheld funding.

In 2021, Newsom became the first governor in the nation to expand medical coverage through the state’s Medi-Cal plan for illegal immigrants by signing into law a bill to cover all illegal immigrants ages 50 and over for preventative services and long-term care. In 2019, California also expanded coverage for all illegal immigrants up to age 26.

The cost of providing the coverage, however, has ballooned over the last few years to $10 billion annually, according to the latest Legislative Analyst’s Office. About 1.7 million Medi-Cal enrollees are illegal immigrants—about 11 percent of total enrollees.

In October 2025, CMS flagged $1.3 billion in Medicaid funds in five states and the District of Columbia that the agency suspected were unlawfully spent on health care for illegal immigrants.

Since then, Oz said the agency has gathered more information, and the total has grown and covered two additional states, but didn’t release details or identify the additional states.

“Medicaid dollars belong to Americans, not illegal immigrants, and we won’t stop until we’ve held rogue states accountable and recovered their misspent funds,” Oz said.

He is also expected to release additional information about the findings.

Last year, Oz announced CMS began auditing state Medicaid programs to ensure they were following the law and not spending federal funds on illegal immigrants.

A preliminary review found five states and the District of Columbia were allegedly spending federal funds improperly—California ($1.3 million); the District of Columbia ($2.1 million); Illinois ($29.8 million); Washington ($2.4 million); Colorado ($1.5 million); and Oregon ($5.4 million).

The states were notified in October, and many began refunding the money, according to Oz.