California is being ripped off. The state is losing billions of dollars to fraudsters every year, and the state’s leaders have done too little to stop them.
While California’s population has dropped since 2020, Medi-Cal spending has doubled over the same time frame. How is this even possible? One reason is that per initial federal estimates, one out of every four Medi-Cal dollars is lost to fraud, for a whopping $50 billion in losses per year. This is an amount larger than the entire economy of some states.
If federal estimates are correct, the state has lost some $200 billion to Medi-Cal fraud under Governor Newsom, not to mention other kinds of fraud using taxpayer dollars.
The federal government must ensure that federal funding will be spent wisely by the states, not lost to fraudsters.
In California alone, federal auditors have found 1.2 million ineligible individuals on Medicaid, with another 3.2 million enrollees found to be potentially ineligible.
Auditors have flagged hundreds of thousands of individuals who were enrolled in Medicaid in multiple states at the same time — many of whom were flagged for fake or stolen Social Security numbers. Even worse, hundreds of millions of Medicaid dollars have funded benefits for the deceased.
Fortunately, the Trump administration is taking on fraudsters like no administration in American history and holding California’s leaders accountable. Earlier this year, the White House announced it would withhold roughly $10 billion in federal funding from five states, including California, until they make reasonable plans for reducing fraud.
This step is absolutely necessary: The federal government must ensure that federal funding will be spent wisely by the states, not lost to fraudsters.
Remarkably, Governor Newsom’s response has been to attack the Trump administration for its anti-fraud efforts and even blame President Trump for California’s carelessness and laxity toward criminals, all while casting himself as an anti-fraud champion.
This tactic might play well on Bluesky, but it is completely divorced from the facts and does nothing to solve the very real problem of taxpayer dollars being stolen.
Unless the governor gets serious, California taxpayers could end up paying an even higher price as soon as President Trump’s new welfare reform law goes into effect. The president’s new law requires states to clean up their rolls and reduce improper payments or risk losing the share of the federal dollars that support Medicaid.
RELATED: The Trump administration is cracking down on fraud
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With these shocking rates of waste, fraud, and abuse, California could lose a large amount of federal funding while it continues to bleed billions of dollars to fraudsters. California has wisely had a balanced budget amendment to the state constitution for more than a century, but this means that every dollar lost to fraud is a dollar taken away from other priorities.
California can’t just print money. Fraudsters are stealing directly out of taxpayers’ pockets, and right now they are doing so on a massive scale.
The good news is that there is a common-sense solution on the table right now in the State Assembly. Republican Assemblywoman Alexandra Macedo has introduced the Protect the Promise Act to help California reduce Medicaid fraud and lower the state’s improper payment rate.
The bill would simply require more eligibility checks using more data. For example, it would require officials to cross-check Medi-Cal enrollment data with federal Medicaid enrollment data to ensure that people aren’t enrolling in multiple states, which is illegal. It would require the state to take immediate action when discrepancies are found.
The bill wouldn’t affect Medi-Cal benefits in the slightest. But by dramatically slashing payments to ineligible people, it could save Californians billions of dollars by reducing fraud and preventing a loss of federal funds. In a balanced-budget state like California, this would free up more resources for other priorities.
Medi-Cal was started to help Californians in need — not to enrich fraudsters with Californians’ hard-earned tax dollars. It is time for the state’s leaders to end the fraud crisis and finally protect the promise for the truly needy. Otherwise, Californians will pay a high price — one that is only getting higher.
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