Time Is Almost Up on California’s Ticking Medicaid Time Bomb

In this Daily Signal article, Nicole Huyer and Christopher Lynch argue that California’s Medi-Cal program has become a massive fiscal liability driven by expansion, federal dependence, and wasteful spending.

• The article says Medi-Cal now covers about 14.5 million Californians, more than one-third of the state’s population.
• The authors note that the program accounts for $222 billion in annual spending, making it the largest item in Gov. Gavin Newsom’s proposed 2026-2027 budget.
• They argue that Affordable Care Act funding incentives encouraged California to expand eligibility because the federal government covers 90% of Medicaid expansion costs.
• The article criticizes California’s provider tax structure, especially the Managed Care Organization tax, as a scheme that shifts more costs onto federal taxpayers.
• The authors say California has expanded Medi-Cal into areas not covered by federal funding, including abortion services, euthanasia-related programs, and coverage for illegal immigrants.
• They cite an $8.4 billion allocation for illegal immigrant coverage and note that Newsom signed emergency legislation to close a $2.8 billion Medi-Cal funding gap.
• The piece argues that Republican-backed Medicaid reforms in the 2025 “One Big Beautiful Bill Act” are likely to reduce California’s federal support through work requirements, more eligibility checks, and restrictions on provider taxes.
• The authors also point to fraud concerns, including prescription drug billing, home health and hospice fraud, taxpayer-funded taxi ride investigations, and other alleged welfare-related fraud.
• The article concludes that California faces a hard choice between raising taxes or tightening eligibility and cutting imprudent spending.

Read the full story: https://www.dailysignal.com/2026/06/02/california-ticking-medicaid-timebomb/