The Centers for Medicare and Medicaid Services (CMS) announced Tuesday, May 27, that it is increasing federal financial oversight to ensure states are not using federal funds to provide full Medicaid benefits to people who are in the U.S. illegally. Medicaid is a government health insurance program for low-income individuals and families, jointly funded by the federal and state governments.
Federal law prohibits Medicaid from covering people who are in the U.S. illegally, except in emergency situations.
“Medicaid is not, and cannot be, a backdoor pathway to subsidize open borders,” CMS Administrator Dr. Mehmet Oz said in a statement. “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.”
Targeting improper spending
Drew Snyder, deputy administrator and director of CMS, sent a letter to some state governments, although it remains unclear which ones. In the letter, he explained that CMS will be taking a closer look at CMS-64 forms, which are reports that states regularly submit, showing how they are spending Medicaid funds.
The goal is to identify any suspicious or improper spending, particularly funds allocated to individuals who may not be eligible for the program. CMS will audit and investigate how states track and manage Medicaid money and will examine the rules that determine eligibility in each state.
Cracking down on loopholes
If CMS officials identify any loopholes that allow unauthorized immigrants to receive full Medicaid benefits, they will work to revise those rules and strengthen enforcement measures.
Currently, 14 states and Washington, D.C., offer some form of healthcare coverage for immigrant children, and about half that number offer it for adult immigrants.
California is one such state. As part of his budget plan, Gov. Gavin Newsom is asking the state legislature to reduce or eliminate some Medi-Cal coverage for immigrants illegally in the state to help control costs, KFF Health News reports.
Newsom warned that if the federal government reduces Medicaid funding, California may not have the funds to continue offering certain healthcare benefits, particularly for immigrants not authorized to be in the country. Officials may cut some of those benefits. He also argued that Congress might be overstepping its authority if it attempts to punish or restrict California for choosing to allocate its state funds to certain benefits.
States warned to ensure compliance
CMS is instructing all states to review and update their systems and procedures to ensure that Medicaid benefits are provided only to individuals who are legally eligible under federal law. If any state accidentally or improperly uses federal Medicaid funds for noncitizens who are not eligible, the federal government says it will demand that the money be returned. CMS stated this enforcement effort aligns with President Donald Trump’s executive order titled Ending Taxpayer Subsidization of Open Borders.
