First Fox: California leaks billions of federal taxpayer dollars into paying illegal immigrants' healthcare costs, a new study argues.
“They are taking advantage of existing loopholes within the law,” Paul Winfrey, president and CEO of the Centre for Economic Policy and Innovation (EPIC), told Fox News Digital.
“States can put illegal immigrants in Medicaid because they send the money back to the state to do these provider taxes and then pay them. That's literally what's going on.”
The paper published by Epic and The Paragon Health Institute draws on California's Medicaid Provider Tax and on paper what appears to be nearly $4 billion in state funding towards healthcare and other initiatives for illegal immigration.
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The investigation accused California Gov. Gavin Newsom of pouring billions of federal dollars into healthcare programs for illegal immigration. (Getty Images)
But that funding actually comes from the federal government, through a refund to California, according to the epic.
Winfree suggested that it could become a region that would regain federal dollars as House Republicans work to find $1.5 trillion to $2 trillion in savings to offset the costs of President Donald Trump's budget priorities.
Under current law, states must pay the same amount of taxes raised to Medicaid providers.
The federal government will match these payments by 60% to help states recover Medicaid costs.
“Medicaid spending should be jointly funded by the federal government and states, but states are increasingly designing Medicaid money laundering schemes that will result in large-scale federal spending without the state's financial obligations,” the paper said.
“Calif., which is colluding with insurers covering Medicaid beneficiaries, has created one of the most outrageous money laundering schemes to acquire more than $19 billion in federal funds over the period from April 2023 to December 2026 without any state contribution.”
The paper continued that these funds were “used to implement major expansions to the Medicaid program to fund illegal immigration and long-term care (LTC) for the wealthy people.”
“The scheme enriches insurance companies, attracts illegal immigrants to the US, and adds a mountain to federal debt at the expense of working Americans.”
Former President Donald Trump will speak to the crowd at a campaign rally in Summerville, South Carolina on September 25, 2023. (Shawn Rayford/Getty Images)
Winfree says closing loopholes that allow states like California to significantly raise provider taxes can save up to $600 billion, adding that Republicans are seeking more than $2 trillion in savings in the budget settlement process.
Republicans in the House and Senate are using the majority to pass a massive bill covering Trump's border security, defense, energy and tax policies.
The settlement allows the Senate to lower the threshold for passing from 60 to 51 votes, so they can do so.
House Republicans passed last month as part of the framework resolution. This was sent to the relevant committee with instructions on whether to find a cut or, in some cases, spend extra dollars.
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The Energy and Commerce committee, which oversees Medicaid and Medicare, is accused of finding $880 billion in spending cuts.
Republicans argue that they are just trying to eradicate waste, fraud and abuse, but Democrats of the Trump Budget Bill have accused the GOP of trying to significantly cut federal health benefits for millions of Americans.
“One of the things Congress is seeing right now is limiting tax loopholes for Medicaid providers. In fact, this is one of the most important offsets within the Medicaid portfolio, and we can see them while the Senate Energy and Commerce Committee and the Finance Committee are putting together the settlement bill,” Winfree said.
He cited the forecast, which stated that eliminating loopholes would save $63 billion, but added that it is an unlikely scenario.
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“There's a much more chance of reducing what's called a safe harbor. So, in other words, all they do is reduce the amount of games that will continue, including this kind of game. And if that happens, it's likely that it will affect a larger blue state than a red state, simply because it's a blue state that actually tested the cap for this type of blue state.”
Even without complete removal, reforming taxes could potentially save billions of dollars on federal spending.
Fox News Digital reached out to the California Department of Public Health for comment but did not respond.
