Democrats often repeat the claim that illegal immigrants cannot receive Medicaid or any public health insurance. They point to federal law, which excludes the undocumented from full Medicaid benefits, and present that as the end of the story.
But that claim is not true. In practice, Democrat-led states have built programs that mirror Medicaid, and they are using budget tricks and funding maneuvers that ultimately channel federal taxpayer dollars into covering illegal immigrants.
What Federal Law Actually Says
Federal law excludes undocumented immigrants from enrolling in full Medicaid. The only exception is “Emergency Medicaid,” which reimburses hospitals for life-threatening emergencies and childbirth. That much is accurate.
But the law also allows states some flexibility in how they raise and spend their share of Medicaid dollars. And it is here that states have found ways to push beyond the federal intent.
How States Backdoor Federal Medicaid Money
Some states have restructured their budgets in ways that let them expand coverage to people who should not qualify, while still drawing down federal Medicaid matching funds.
- Provider tax recycling: States like California tax hospitals and insurers, then recycle the money back through Medicaid payments. That inflated spending triggers more federal matching funds, which are then used to expand coverage
- Artificial cost shifting: By reclassifying certain services or administrative costs, states can claim them under Medicaid and pull in a federal match, even when the services go to populations that should be excluded
- Waivers and loopholes: Some states apply for waivers or build state programs that mirror Medicaid, but still manage to intertwine them with the federal match system
- State-funded Medicaid lookalikes: In places like California, Oregon, Washington, Illinois, New York, and New Jersey, these programs provide full health coverage to illegal immigrants. On paper, they are “state programs,” but in practice, they often rely on the same infrastructure and funding flows as Medicaid
The result is that Medicaid dollars, both state and federal, are being used directly and indirectly to pay for illegal immigrant health care.
- California – Full Medicaid-style coverage for all low-income adults regardless of status (Source)
- Oregon – Full Medicaid-style coverage for all ages, regardless of status (Source)
- Washington – Full Medicaid-style coverage for adults regardless of status (Source)
- Illinois – Medicaid-style coverage for undocumented seniors 65+(Source)
- New York – Full Medicaid for undocumented seniors 65+; pregnant women and children also covered regardless of status (Source)
- New Jersey – Coverage for all children under 19, regardless of immigration status (Source)
- Connecticut – Coverage for children up to age 15, regardless of immigration status (Source)
- Rhode Island – Coverage for all children under 18, regardless of immigration status (Source)
- Massachusetts – MassHealth Limited plus Health Safety Net for certain hospital/community health services, regardless of status (Source)
- District of Columbia – DC Health Care Alliance covers undocumented adults (Source)
- Minnesota – MinnesotaCare expansion for undocumented adults (Ended July 2025, Source)
- Colorado – Not Medicaid, but OmniSalud provides subsidized marketplace plans for undocumented residents (Source)
This list is not exhaustive but merely a sample of where illegal aliens can receive taxpayer-funded Medicaid on your dime.
The Federal Response
Federal officials have begun to notice. Earlier this year, the Centers for Medicare & Medicaid Services announced new oversight efforts to crack down on states “illegally using federal Medicaid funding to provide health care to undocumented immigrants.” They specifically called out provider-tax schemes and budget gimmicks designed to pump up federal matches.
The Vice President recently made the point that some states openly advertise their illegal alien coverage, such as New York:
CMS warned that states caught doing this could be forced to repay federal funds. They also moved to close what they called a “Medicaid loophole” that allowed states to game the system at the expense of taxpayers nationwide.
The Bottom Line
When the Democrats claim that “illegal immigrants can’t get Medicaid,” it is not just misleading. It is a deliberate talking point meant to cover up the fact that in many blue states, illegal immigrants are receiving full, taxpayer-funded health coverage through programs designed to look and act like Medicaid, using Federal dollars indirectly.
Whether through state-only programs, budget gimmicks, or backdoor use of federal matching funds, the reality is simple: illegal immigrants are getting health insurance paid for with public money, and Democrats are the ones making it happen.