When Medicaid expansion was announced, many of us argued that the states were setting themselves up for being on a very expensive hook down the road.
But short-sighted California lawmakers took the bait — and now they’re panicking as federal healthcare subsidies may expire or be reduced. They blame President Donald Trump for not keeping the dollars flowing, but the real blame lies with local, county, and state officials who have spent years mismanaging billions of dollars and allowing California’s financial problems to snowball.
The silver lining is that the implosion of the state’s healthcare marketplace will also expose decades of malfeasance at all levels and — I hope — give taxpayers a reason to change course.
Decades of Waste, Fraud, and Abuse
I’ve seen California’s penchant for mismanagement firsthand. Serving as mayor and councilman for the city of Encinitas in San Diego County, I reviewed emergency budgets and response times while serving on the San Dieguito Ambulance District (CSA-17) Board of Directors.
During my tenure, ambulance transports for our residents were covered by a nominal property tax fee approved by voters.
But later, CSA-17 boards adopted staff recommendations and changed the system, charging more than $1,000 annually in addition to the approved fees. That number recently became $3,000 on top of the standard fees – all of it without a public vote.
Milking the Taxpayer Cash Cow
The staff and its consultants justified the added costs by citing budget shortfalls, but it was actually milking the “public-private partnership” like a cash cow. The CSA-17 currently contracts emergency transports to American Medical Response (AMR), a private company that operates through government agencies, making it eligible for federal Medicaid reimbursements and Intergovernmental Transfers (IGT).
In San Diego, Mayor Todd Gloria (D) knows the IGT game well. He has diverted $17.3 million of profits generated by his “Alliance Model” to cover the shortfalls in other City Departments.
In any other state, Gloria’s actions would stand out. But compared to Governor Gavin Newsom, he’s a flea. Newsom expanded Medicaid coverage to illegal immigrants, dramatically increasing the state’s healthcare outlays. Like Gloria, he covered it up with a supersized version of that same federal funding loophole.
Lucrative Loopholes
The IGT loophole allows states like California to submit inflated bills to request larger Medicaid reimbursements from the federal government, which governors then use to pay for unrelated spending and budget deficits.
How it works in California is that the state received permission from the Centers for Medicare and Medicaid Services to increase the reimbursement of emergency ambulance transports by nearly 500%, from $339 to $1,600.
But not for every ambulance ride. Only for those with government-nepotism blessings, leaving private ambulance providers in the financial dust at lower rates. And the state pockets the difference.
These aren’t small taxpayer dollars. And President Joe Biden thought so well of it that his administration approved California’s State Plan Amendment (SPA) to extend this financial padding through 2024.
Growing the Bloat
Governor Newsom — the governor who famously issues driver’s licenses and free health insurance to people illegally in our country, and gives in-state college tuition to undocumented students from other countries but not American students from other states — seriously wants (and likely expects) an extension of the same bloated Medicaid/Medi-Cal reimbursements approved by Biden.
If denied, he will no doubt blame Trump, as he does for everything else.
Trump should reject them and force California to (finally) get honest and make some hard choices — rather than continuing to seek other taxpayers’ largess to find a way out of the financial hole into which it has leapt.
This originally appeared at The Coast News and is reprinted by permission.
Jerome Stocks is a former mayor and city councilman of Encinitas.
