The Sanctuary State Scam: How Blue States Like Colorado, California & New York Are Draining Your Wallet
You work hard. You pay your taxes. You expect your state to take care of your family, your roads, your schools, and your hospitals. But if you live in a blue state like Colorado, California, or New York, there’s a good chance that your tax dollars are being used for something else entirely: free healthcare for illegal immigrants.
That’s not a conspiracy theory. That’s not an exaggeration. That’s the reality unfolding right now—and even the federal government is finally starting to take notice.
They Call It “Compassion.” We Call It Theft.
In late May, the Centers for Medicare and Medicaid Services (CMS) launched an investigation into Colorado after reports surfaced that the state was using Medicaid funds—some of which come straight from the federal government—to provide free medical coverage to tens of thousands of undocumented immigrants. Colorado officials admitted that over 21,000 undocumented children and 16,000 pregnant women were enrolled. Another 36,000+ undocumented adults received emergency Medicaid in just one month.
This isn’t just a Colorado issue. California expanded their Medi-Cal program last year to cover every undocumented adult in the state. No ID? No problem. But when the bill came due, they realized they couldn’t afford it. Facing a $12 billion budget shortfall, Governor Newsom hit the brakes and started rolling back the program.
New York, meanwhile, is still proudly covering undocumented seniors, kids, and moms using state funds—while collecting over $60 billion in federal Medicaid reimbursements.
That money? It’s coming from you. From your paycheck. From your grocery bill. From the rising costs of living in a state that’s decided citizenship is optional but taxation is mandatory.
The Federal Government Is Finally Paying Attention
For years, sanctuary states have been getting away with this. They promise the moon, hand out benefits like Halloween candy, and then stick the bill in your mailbox.
But now, the Trump administration is pushing back. The DOJ just sued Colorado and Denver for their sanctuary policies. They also hit Los Angeles with a lawsuit for blocking cooperation with federal immigration enforcement—while funneling millions into benefits for illegal immigrants.
And CMS has warned that if states don’t get their act together and stop misusing federal Medicaid money, the reimbursements will stop. That’s a big deal. Without those matching funds, states like Colorado and New York could see massive holes in their budgets—holes they’ll fill by raising your taxes even higher.
What Happens When the Money Runs Out?
California already found out the hard way. They spent billions expanding coverage to undocumented immigrants, only to realize they couldn’t afford it. Their solution? Cut the program and start charging premiums to illegal immigrants. Translation: they realized they were being too generous with other people’s money.
Colorado could be next. If CMS pulls its federal funding, the state will be stuck with a bill it can’t pay. That means even fewer services for citizens, higher taxes, and deeper debt. And yet, politicians in these states act like anyone who questions these priorities is heartless or bigoted.
Let’s be clear: this isn’t about race. It’s about responsibility. It’s about prioritizing citizens over illegal immigrants. And it’s about making sure your family doesn’t get left behind while politicians virtue signal with your wallet.
Meanwhile, Red States Are Doing the Opposite
Not every state is playing this game. Conservative-led states across the country are drawing a line in the sand. They’re refusing to use state funds for undocumented coverage. They’re banning sanctuary city policies. They’re prioritizing citizens, not political agendas.
The result? Lower taxes. Better services. More transparency. Less chaos. And taxpayers who actually feel like their government is on their side.
At RedRefuge, we’ve helped hundreds of families relocate from blue states to red ones. And stories like this are why. People are tired of watching their hard-earned money get flushed down the drain while roads crumble and schools decline. They’re tired of feeling like they come second to people who aren’t even here legally. They’re tired of being told they’re the problem just for wanting a little accountability.
What You Can Do
If you live in a blue state, you’ve got choices. You can:
Demand transparency from your elected officials. Ask how much your state is spending on undocumented care.
Hold your lawmakers accountable. Don’t accept excuses. Make them answer for their priorities.
Vote for leaders who put citizens first.
And if your state refuses to change, relocate to one that already has.
That’s what RedRefuge is here for. We help families escape broken, bloated, mismanaged blue states and find freedom, safety, and sanity in red states that respect your values—and your bank account.
This isn’t just about immigration policy. It’s about the role of government. It’s about whether the people who follow the rules, pay the taxes, and build their communities will continue to be sacrificed for a political agenda that puts lawlessness first.
The sanctuary state scam is real. It’s costly. It’s growing. And it’s time to say enough.
Your Freedom. Your Family. Your Future.
Sources
Colorado Medicaid Investigation
“Feds investigating Colorado’s Medicaid program over coverage of immigrants” – The Colorado Sun
https://coloradosun.com/2025/06/25/immigrants-medicaid-investigation
DOJ Lawsuit Against Colorado and Denver
“Trump administration sues Colorado and Denver over sanctuary city laws” – CBS News Colorado
https://www.cbsnews.com/colorado/news/white-house-sues-colorado-denver-sanctuary-policies
California Reverses Medi-Cal Expansion
“California closes $12B deficit by cutting back immigrants’ access to health care” – Associated Press
Trump DOJ Lawsuit Against Los Angeles
“Trump administration sues Los Angeles over sanctuary policies” – Politico
New York Medicaid Spending
“Federal funds are not used to enroll undocumented immigrants in Medicaid” – PolitiFact
List of Sanctuary Medicaid States
“Republicans push to punish states that offer health care to unauthorized immigrants” – CBS News
https://www.cbsnews.com/news/republicans-punish-states-insure-unauthorized-immigrants
Federal Oversight Announcement
“CMS increasing oversight on states illegally using federal Medicaid funding” – U.S. Centers for Medicare & Medicaid Services
California Budget Deficit and Healthcare Cuts
“Gov. Newsom unveils plan to roll back immigrant healthcare coverage amid budget crisis” – CalMatters
https://calmatters.org/health/2025/05/newsom-freeze-medi-cal-undocumented-immigrants
State-Level Spending on Undocumented Care
“How federal money ends up paying for Medicaid for illegal immigrants” – Paragon Health Institute
https://paragoninstitute.org/medicaid/californias-insurance-tax-shuffle
Trump Lawsuit Timeline & ICE Enforcement
“Trump administration gives personal data of immigrant Medicaid enrollees to deportation officials” – Associated Press
