The Trump administration is taking decisive action to address government waste and abuse by cracking down on the billions in federal tax dollars that fund healthcare for illegal immigrants. In tandem, they are introducing new work requirements for able-bodied Medicaid recipients, marking a significant policy shift.
At a press briefing held at the White House on Tuesday afternoon, Dr. Mehmet Oz, the Administrator for the Centers for Medicare and Medicaid Services (CMS), laid out a robust plan to halt what he described as “legalized money laundering.” Without intervention, this issue could potentially burden the program with an additional $5.4 trillion in costs over the upcoming decade.
Dr. Oz disclosed that approximately $2 billion in federal tax funds are being misallocated to illegal immigrants, a figure that has alarmingly doubled since his previous reports. He highlighted California’s situation, where CMS has demanded the state return $2 billion to the federal government, half of which has already been successfully recovered.
During the news conference, Dr. Oz specifically criticized California’s Medi-Cal system, pointing out that beneficiaries there receive full dental and vision benefits. “While I support these benefits, it’s important to note that Medicare patients do not receive them,” Oz remarked. “We need to strive for equity and collectively decide our national priorities.”
He specifically took aim at California, noting CMS told the state it owes the federal government $2 billion — half of which has already been successfully recouped.
“Just to put it in context, in California, if you’re on Medi-Cal, the Medicaid program in California, until this administration, you got full dental and full vision benefits,” Oz said. “Now, I’m for those benefits, I like them, but we don’t give that to Medicare patients. So we should at least be equitable, and all of us together should decide what we are going to do as a nation.”
“The people who pay that bill, when … the largesse of California allows folks to get benefits that the rest of the country doesn’t think is appropriate for illegal immigrants …, is paid by folks who are taxpayers in New Mexico — which is a blue state — and Mississippi, a red state,” he continued.
Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, discussed a number of healthcare topics during a news conference with reporters on Tuesday, June 2, 2026. (Aaron Schwartz/CNP/Bloomberg via Getty Images)
In tandem with cutting funds for illegal immigrants, the administration is overhauling Medicaid by instituting work requirements.
The new rule will mandate that able-bodied recipients must work for 20 hours a week, volunteer or get an education in order to receive free healthcare coverage.
“If you’re sitting at home, which is true for the millions of people who are able-bodied on Medicaid, on average, you’re spending 6.1 hours watching television just hanging around,” Oz said.
He framed the new requirements as a “path to prosperity,” claiming they return Medicaid to its original 1965 intent.
Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, takes questions from members of the media during a news conference at the White House in Washington, DC, US on Tuesday, June 2, 2026. (Aaron Schwartz/CNP/Bloomberg via Getty Images)
Oz argued that anyone receiving value from the American people should have an obligation to participate in society if they are physically able.
“If you can work, you should get up and work,” Oz said. “… If we put guardrails around these programs, we’ll allow them to thrive. I’m here because I love Medicaid. The president has already said he loves and cherishes Medicaid and Medicare. … We cannot allow these programs to be defrauded into a turmoil that they cannot pull up from. If we love these programs, we will make the difficult decisions.”
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