Gavin Newsom built a $12 billion budget deficit with his own two hands.
Now California has a plan to make you pay for it.
And Sacramento is counting on you not figuring this out before the ambulance bill arrives.
California Medi-Cal Fraud Is Costing You $1,200 Every Time Someone Calls 911
It's called an intergovernmental transfer – and if that sounds like bureaucratic language designed to make your eyes glaze over, that's the point.
Here's how it actually works.
California tells counties to move Medicaid money to the state.
The state calls that money its own "contribution" to the program.
Washington matches it with federal dollars.
Sacramento sends both piles back to government-run ambulance companies as inflated reimbursements.
The companies end up with more than they put in.
The state ends up with nothing out of pocket.
And you – the American taxpayer – end up holding the tab.
In 2022, California paid public and private ambulance providers the same rate: $339 per emergency transport.
Same job. Same ride. Same rate.
Then Newsom's people launched a new program that funneled massive payments exclusively to government-connected providers while leaving private companies behind.
By 2024, favored public providers were pulling in $1,168 per transport.
Private companies doing the exact same job? Still $339.
Sacramento now wants federal approval to push that rate to $1,597 per trip.
That's nearly five times what an honest private company gets for an identical ambulance ride.
More than $1,200 per trip is not going to faster response times or better equipment.
It's filling the holes that Newsom's reckless spending created.
The Government Accountability Office warned Congress this scheme was happening back in 2004.
The Paragon Health Institute estimates improper Medicaid payments nationwide totaled $1.1 trillion between 2015 and 2024 – double what the federal government officially admits.
California leads the pack.
Newsom has been running this scam in broad daylight for years.
Biden's CMS signed off on every expansion.
Nobody said a word.
Dr. Oz and CMS Are Coming for Newsom's Medicaid Waste
Vice President JD Vance and CMS Administrator Dr. Mehmet Oz stood at the White House and told Sacramento the game is over.
The Trump administration deferred $259.5 million in federal Medicaid funds to Minnesota for fraudulent and unsupported claims.
Oz called the people running these schemes "self-serving scoundrels."
HHS Secretary Robert F. Kennedy, Jr. said the old "pay and chase" model is dead.
Trump's One Big Beautiful Bill – signed into law on July 4, 2025 – closes the financing loophole California has used to extract billions from Washington without putting up real state money.
CMS has already issued guidance requiring California to unwind the whole operation.
Newsom knows what's coming.
His own budget documents admit the scheme falls out of compliance by the end of 2026.
That's why Sacramento is scrambling right now to get the $1,597 ambulance rate approved before the window closes.
One decision by CMS kills it.
Newsom Budget Deficit Is Leaving Real Patients Without Ambulances
Here's what the accounting games actually mean on the ground.
When government-connected providers get paid five times what private companies receive for identical work, private companies stop showing up.
They can't compete.
They lose the market.
And when they leave, the gaps show up in rural communities and lower-income neighborhoods where government providers don't operate.
The patients in those areas don't get slower ambulances.
They don't get one at all.
That's the consequence Newsom never mentions when he describes California's Medicaid program as a moral achievement.
The same budget running this ambulance scheme also extended Medicaid to 1.6 million illegal aliens – then froze enrollment and started charging premiums when the bill came due because the state couldn't afford what it promised.
Federal auditors caught California improperly claiming $52.7 million in Medicaid reimbursements for services to people who didn't qualify under federal rules.
Federal auditors don't flag patterns by accident.
Newsom is blaming Trump's tariffs for the deficit while his Medicaid spending blew past projections by $6.2 billion in a single year and the state had to borrow mid-year just to keep the program running.
He built a $348 billion budget on a structural hole that balloons to $22 billion within two years.
He's funding it by gaming programs designed to help the poor.
CMS can reject California's pending 2026 ambulance reimbursement application right now – the one that pushes payments to $1,597 per transport.
One decision stops $1,200 per ride from disappearing into Newsom's budget hole.
Families caring for disabled children, aging parents, and veterans with no other options deserve a Medicaid program that serves them.
Not a slush fund with a Medi-Cal logo on the side.
Sources:
- Paragon Health Institute, "The Local Loop: How States Turn Medicaid into a Government Provider Payday Scheme," Paragon Health Institute, December 15, 2025.
- Paragon Health Institute, "State Funding Gimmicks Drive Unequal Ambulance Payments in Medi-Cal," Paragon Health Institute, July 9, 2025.
- Centers for Medicare & Medicaid Services, "Trump Administration Prioritizes Affordability by Announcing Major Crackdown on Health Care Fraud," CMS.gov, February 25, 2026.
- Centers for Medicare & Medicaid Services, "CMS Shuts Down Massive Medicaid Tax Loophole, Saving Billions for Federal Taxpayers," CMS.gov, 2026.
- Centers for Medicare & Medicaid Services, "CMS Issues Guidance to Strengthen Oversight of Medicaid Financing," CMS.gov, 2025.
- HHS Office of Inspector General, "California Improperly Claimed $52.7 Million in Federal Medicaid Reimbursement," HHS OIG, December 18, 2025.
- Irene Watkins, "Gavin Newsom's California Is Looting Medicaid in Broad Daylight," Blaze Media, March 2, 2026.