It's far, far, far from being just illegals who are getting free or nearly-free treatment. A great part of the problem with hospitals like San Jose (whose books I have studied as part of my employment) is that many or most of the patients are Medical/Medicare recipients. If 67-year-old Pedro, a US citizen, gets a myocardial infarction and racks up a $75,000 bill, Medicare pays the hospital about $10,000. If legal immigrant Kwon Lee has a premie who generates $400,000 in charges, Medical pays the hospital $50,000. In both cases the patients are not expected to pay a red cent for their care. What business can keep running like that? They don't get enough Blue Cross/Blue Shield patients to even things out.
Maybe so, but they're a big part of the problem in San Jose and far larger elsewhere, for the reasons you stated in reference to indigent citizens and legal permanent residents.
Doesn't let them off the hook.