CMS announced it will strengthen federal oversight to ensure Medicaid funds aren’t used to provide healthcare for undocumented immigrants.
Under current federal law, Medicaid funds can only be used for emergency medical services for undocumented individuals. Between 2017 and 2023, emergency Medicaid accounted for less than 1% of total annual Medicaid spending.
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In a May 27, 2025 press release, CMS noted that “some states have pushed the boundaries, putting taxpayers on the hook for benefits that are not allowed.” As a result, the agency is tightening its review processes.
CMS will conduct targeted evaluations of CMS-64 form submissions and closely review state Medicaid spending reports. It also plans to examine eligibility rules and financial management systems to identify and close any potential loopholes.
The agency is urging all states to strengthen internal controls, update eligibility systems, and revise cost allocation policies to comply with federal law.
“Any improper spending on noncitizens will be subject to recoupment of the federal share,” CMS emphasized.
This move supports President Trump’s February 2025 executive order, “Ending Taxpayer Subsidization of Open Borders,” which seeks to block access to taxpayer-funded benefits for undocumented immigrants.
“Medicaid is not, and cannot be, a backdoor pathway to subsidize open borders,” said CMS Administrator Mehmet Oz. “States have a duty to uphold the law and protect taxpayer funds. We are putting them on notice—CMS will not allow federal dollars to be diverted to cover those who are not lawfully eligible.”
