Fed Medicaid freeze brings accountability to California, Minnesota — finally

The Trump administration’s halt on Medicaid payments to California and Minnesota brings welcome focus on mismanagement by Govs. Gavin Newsom and Tim Walz.

After years of ballooning budgets, program expansions and suspiciously lax oversight, these blue-state leaders need to learn that the free ride is over. 

The governors can dismiss the feds’ decision as political theater. In reality, it’s just accountabilty.

Under Newsom, California’s spending has exploded from roughly $209 billion at the start of his tenure in 2019 to over $350 billion in the 2026-27 cycle.

Much of that surge was funneled into Medi-Cal, the state’s Medicaid program, where total spending roughly doubled.

In-home supportive services, a flagship component, ballooned dramatically, with growth rates that federal reviewers flagged. California saw 24% spending growth in key periods versus a 12% national average. Outrageous.

These jumps came amid claims of higher caseloads and wages, but they also came despite persistent red flags from the state’s own audits.

California’s state auditor has kept the state Department of Health Care Services on its high-risk list for years.

Earlier reports estimated these mismatches contributed to at least $1.9 billion in questionable payments, with prior cycles pointing to figures nearing $4 billion over several years. Yikes.

Discrepancies allowed payments to flow for individuals whose eligibility was murky or outright invalid, including benefits that lingered long after records suggested they should have stopped.  The auditor repeatedly highlighted questions about Medi-Cal eligibility and insufficient follow-up.

This created massive financial exposure while raising the obvious question: Where exactly were all those taxpayer dollars going? Hospice care? That’s yet another embarrassing chapter, particularly in Los Angeles County, where providers multiplied like rabbits and overbilling patterns drew federal spending estimates into the billions.

Audits exposed shared addresses, low patient counts and questionable terminal diagnoses. And yet enforcement seemed perpetually lax.

In typical eyeroll-inducing fashion, Newsom’s team has leaned hard on the “political stunt” line while touting policy goals like broader access and community care.

That defense might land better if the state’s own auditor hadn’t spent years waving warnings.

Rapid growth without verification created an environment ripe for waste. Worse, it left taxpayers to foot the bill for what looks like mismanagement dressed up as compassion.

The governors now find themselves scrambling to substantiate their claims or risk losing federal matching funds.

Newsom and Walz must now produce evidence — or own the consequences of years of unchecked spending that apparently has flushed away billions of taxpayer dollars.

At last, accountability.

Richie Greenberg is a political commentator based in San Francisco.

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