The Trump administration has set its sights on eliminating government waste and misuse, with a focus on the substantial federal tax dollars allocated to healthcare for undocumented immigrants. In addition, the administration is instituting new work requirements for Medicaid recipients who are deemed able-bodied.
In a press briefing held at the White House on Tuesday, Dr. Mehmet Oz, the Administrator of the Centers for Medicare and Medicaid Services (CMS), unveiled a robust plan designed to curb what he referred to as “legalized money laundering.” He warned that, without intervention, this issue could potentially inflate the program’s costs by an additional $5.4 trillion over the next ten years.
Dr. Oz highlighted that the administration has identified approximately $2 billion in federal tax funds that have been improperly allocated to undocumented immigrants. This figure has seen a significant increase, doubling since he last addressed the issue a year ago.
During the conference, which took place in the James S. Brady Press Briefing Room at the White House in Washington, D.C., Dr. Oz specifically called out California. He reported that CMS has informed the state of its obligation to repay $2 billion to the federal government, noting that half of this amount has already been successfully recovered.
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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