California’s government has turned into a full-scale financial parasite, draining billions from the American taxpayer through a Medicaid scam so brazen it would make a Wall Street fraudster blush.
For years, Sacramento has run its state into the ground, promising cradle-to-grave handouts, mismanaging its budget, and driving out businesses with its radical policies. Now, rather than owning up to their failures, they’re manipulating federal Medicaid reimbursements to funnel billions of your tax dollars into their sinking ship.
It’s the kind of government scheme that would land any private company under federal investigation. California’s Department of Health Care Services masterminded an elaborate scheme known as State Plan Amendment (SPA) 22-0015, a bureaucratic loophole disguised as healthcare reform.
The state artificially jacked up the price of ambulance rides, but only if they’re billed through government-run fire departments, squeezing private emergency services out of the market. Before this, an ambulance ride for a Medicaid patient cost about $339. But under California’s scam, that price tripled to over $1,000 — and federal taxpayers are being forced to cover it.
Private ambulance companies, which provide faster, more efficient care at a lower cost, have been sidelined, fired, and then re-hired as subcontractors for a fraction of what the government is now collecting.
This isn’t about improving healthcare. It’s not about helping low-income Americans. The money isn’t being used to hire more paramedics, improve emergency response times, or invest in better equipment. It’s being used to bail out California’s bankrupt public pensions and cover its disastrous budget deficits.
State officials are treating Medicaid like a slush fund, cooking the books to extract more cash from the federal government while delivering the same service at three times the cost. The bureaucrats get rich, the pensions stay afloat, and the taxpayers get fleeced.
This is how California operates. The state is falling apart — its cities are plagued with homelessness, crime is skyrocketing, and businesses are fleeing at record speed. But rather than reform their disastrous policies, California’s leaders have found a new scam: Make the rest of the country fix their mistakes.
Through intergovernmental transfers, aka inflated Medicaid reimbursements, they’ve created a massive wealth transfer from working-class Americans in Kansas, Arizona and Ohio straight into the pockets of Sacramento bureaucrats and their bloated pensions.
It’s not just a policy failure — it’s an economic war on the rest of the country. States like Texas and Florida have balanced budgets, keep taxes low, and don’t rely on federal bailouts to function. Yet, through Medicaid manipulation and left-wing cronyism, they’re being forced to bankroll the reckless spending of a failing blue state.
In 2023 alone, California pulled in over $91 billion in federal Medicaid money — more than the entire GDP of some small countries. And the numbers keep climbing because the scam keeps expanding.
Washington’s response? Nothing. The same federal agencies that claim to crack down on Medicaid fraud have done absolutely nothing to stop California from turning the system into a government-sponsored racket. Why? Because it’s run by the very people who benefit from it—bureaucrats protecting their own.
Enough is enough. The Biden administration wouldn’t step in to stop this corruption. It’s now time for this Republican trifecta federal government to act immediately.
What Elon Musk has done with DOGE has been a good start to reducing government waste, fraud and abuse. Tackling these fraudulent intergovernmental transfers is a logical next step.
States should not be allowed to manipulate federal reimbursement formulas to fund their pension deficits.
Further, Medicaid spending should be tied to actual healthcare outcomes — not California’s budget shortfalls. In fact, Californians just voted to implement a tax on managed care organizations, supported by both the Republican and the Democratic state parties and opposed by Gov. Gavin Newsom, that puts more parameters on how Medicaid dollars can be spent, tying the funds to actual healthcare outcomes.
Even residents of the most liberal state in the U.S. are tired of Newsom’s loose use of their tax dollars for wasteful spending on programs that don’t impact their lives. Federal watchdogs must launch investigations into how California is abusing the system, and if necessary, funding should be cut off until the fraud is addressed.
California’s leaders will never stop this on their own. Why would they? Their entire system of government is built on leeching off others. The only way to put an end to this institutionalized theft is for Congress to step in, shut down the scam, and hold California accountable for the disaster it created.
Diana London is a seasoned political strategist and commentator with over five years of experience on Capitol Hill. Currently a Newsmax columnist, Diana is President and Co-Founder of Ford & London Global Strategies, and Vice President of X Capital Investments. She also serves as CEO of The Secret Weapon Agency, specializing in crisis communications and public relations. She works on advancing conservative initiatives and empowering diverse communities as well as championing criminal justice reform. Read Diana London's Reports — More Here.
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