House GOP Investigation Targets Democratic States Over Healthcare Costs

Congressional Republicans have launched a sweeping investigation into billions of dollars in Medicaid spending on unauthorized immigrants, targeting eight Democratic-led states in what could become one of the most significant healthcare policy battles of the Trump administration.

House Committee on Oversight and Government Reform Chairman James Comer (R-KY) sent formal letters to Democratic governors demanding detailed financial records about their Medicaid programs since 2019. The investigation centers on allegations of “waste, fraud and abuse” in programs serving people without legal immigration status.

$16.2 Billion Price Tag Sparks Congressional Action

The probe was triggered by a Congressional Budget Office report showing taxpayers spent over $16.2 billion on Medicaid-funded emergency services for unauthorized immigrants during the first three years of the Biden administration. This represents a staggering 124% increase compared to the same period under the Trump administration.

“The Congressional Budget Office’s analysis confirms that the mass migration of illegal immigrants is costing billions of dollars to Medicaid – a program created to serve the health care needs of the most vulnerable Americans,” Chairman Comer stated in his letter.

Eight Democratic States Under Investigation

The investigation targets governors and health officials in:

• California (Gov. Gavin Newsom)
• Colorado (Gov. Jared Polis)
• Illinois (Gov. JB Pritzker)
• Minnesota (Gov. Tim Walz)
• New York (Gov. Kathy Hochul)
• Oregon (Gov. Tina Kotek)
• Washington (Gov. Bob Ferguson)
• Maine (Gov. Janet Mills)

These states have been asked to provide comprehensive documentation including costs of medical procedures, lists of denied applications due to immigration status, and “all documents and communications” related to charity care programs for immigrants.

Medicaid Rules Create Complex Legal Landscape

Understanding the controversy requires grasping Medicaid’s complex eligibility rules. Federal law generally prohibits undocumented immigrants from receiving comprehensive Medicaid benefits. However, they can receive emergency medical services including emergency room visits, emergency surgery, and emergency labor and delivery.

Additionally, fourteen states plus Washington D.C. have created their own state-funded programs to provide health coverage to immigrants regardless of legal status. Seven of those states also cover some adults without legal status using state taxpayer money, not federal Medicaid funds.

California’s $500 Million Error Spotlights Systemic Issues

The investigation has uncovered significant billing errors, particularly in California. State officials revealed they had improperly billed the federal government at least $500 million for services provided to unauthorized immigrants, including mental health services, prescription drugs, and dental care that should have been covered by state funds only.

Former California Medicaid director Jacey Cooper, who served from 2020 to 2023, discovered and reported the error to federal regulators. “Once I identified the problem, I thought it was really important to report it and we did,” Cooper told reporters. “We take waste, fraud and abuse very seriously.”

California operates the nation’s largest Medicaid program, serving nearly 15 million people with a budget approaching $200 billion annually. The state provides coverage to 1.6 million immigrants without legal status at an estimated cost of $12.4 billion this year.

States Push Back Against Investigation

Democratic governors are pushing back against what they characterize as a politically motivated attack on immigrant healthcare. Governor Hochul’s spokesperson condemned the investigation as “an attack on life-saving, emergency health care by Congressional Republicans.”

Colorado’s Governor Jared Polis is reviewing the request through his office, while Attorney General Phil Weiser has joined a lawsuit challenging the Department of Homeland Security’s access to individual health data for immigration enforcement purposes.

“There’s no reason to share this sensitive data with immigration or law enforcement agencies,” Weiser stated. “We’re suing to protect Colorado’s Medicaid program and the health and welfare of the people it serves.”

Trump Administration Expands Immigration Crackdown to Healthcare

The Medicaid investigation represents part of the Trump administration’s broader immigration enforcement strategy. The Centers for Medicare and Medicaid Services is conducting parallel reviews of payments for immigrant health services, looking for waste, fraud and abuse.

CMS Administrator Dr. Mehmet Oz emphasized the administration’s commitment to program integrity: “Every dollar misspent is a dollar taken away from an eligible, vulnerable individual in need of Medicaid. This action underscores our unwavering commitment to program integrity, safeguarding taxpayer dollars, and ensuring benefits are strictly reserved for those eligible under the law.”

The administration is also implementing monthly reports to identify Medicaid enrollees whose legal status cannot be verified by the Department of Homeland Security.

Economic Impact and Policy Implications

Health policy researchers argue that providing preventive care and treatment for chronic conditions to immigrants actually reduces costs by preventing more expensive emergency care later. Francisco Silva, president and CEO of the California Primary Care Association, warned that restricting care could “drive up health care costs and make it more difficult to access care.”

“The impact is emergency rooms would get so crowded that ambulances have to be diverted away and people in a real emergency can’t get into the hospital, and public health threats like disease outbreaks,” Silva explained.

Meanwhile, the Trump administration’s “One Big Beautiful Bill” will reduce federal reimbursement rates to states for immigrant emergency services. In California, federal reimbursement will drop from 90% to 50% starting in October 2026.

September 17 Deadline Looms

States have until September 17, 2025, to comply with the House committee’s document requests. The investigation seeks detailed information dating back to January 2019, including:

• Enrollment data for Medicaid and Emergency Medicaid programs
• Costs associated with medical procedures for unauthorized immigrants
• Lists of individuals denied coverage due to immigration status
• All communications related to charity care programs

It remains unclear what enforcement actions the committee could take if states refuse to voluntarily provide the requested information.

Broader Healthcare Implications

The investigation comes as the Congressional Budget Office estimates that 10 million people will lose health insurance by 2034 due to changes in Medicaid and insurance market support. The broader Republican budget bill includes provisions that would penalize states providing health coverage to immigrants regardless of legal status.

The controversy highlights fundamental questions about healthcare access, immigration policy, and federalism that will likely define political debates throughout the Trump administration’s second term.

What This Means for American Healthcare

This investigation represents more than a accounting dispute – it’s a defining moment for American healthcare policy. As states grapple with rising costs and federal pressure, the outcome could reshape how millions of immigrants access medical care and influence state budget decisions nationwide.

The September 17 deadline will test whether Democratic states choose compliance or confrontation, setting the stage for potential legal battles that could reach the Supreme Court. For now, immigrants in affected states face increasing uncertainty about their healthcare access while politicians battle over billions in taxpayer dollars.