A rump group of Senate Democrats is providing the votes needed to bring the Schumer Shutdown to an end. Those who backed the Senate minority leader will likely see this as treason, ending a gambit that was playing out to the Democrats’ advantage. Or against Donald J. Trump, which, as they see it, are the same things.
They’re not, but that no longer matters. Still, President Donald J. Trump, by using the “Bully Pulpit” to expose the abundant fraud and waste throughout Medicaid, could have taken the wind out of the shutdown’s sails in its first few days.
That’s right. If there’d been an honest discussion about what’s really happening, if people had been allowed to see what’s really going on in the states, things might never have gotten as far as they did.
Say whatever else you want about helping the poor, Medicaid is increasingly used as a slush fund by Blue State governors who exploit its federal dollars to the disproportionate benefit of their political base. Trump and congressional Republicans tried to address this by demanding work requirements for able-bodied adults. The Democrats, by arguing that such a thing would be unfair to low-income people, killed it.
They continue to get away with denying that fraud exists in a programmatically significant way, endangering Medicaid’s financial future. The only achievable fix within the context of the existing debate is an immediate return to its place in the socioeconomic safety net, available only to those who genuinely need it.
The politicians and pundits who insist such things could never happen are wrong. States do pay out Illegal healthcare benefits through Medicaid to undocumented immigrants, with California leading the charge as Gov. Gavin Newsom lays the groundwork for an almost certain 2028 run for the White House. Defying explicit legal prohibitions, the state has systematically expanded Medicaid (Medi-Cal) benefits to all low-income residents regardless of immigration status. As a result, nearly 1.7 million undocumented immigrants are now enrolled in the program.
A federal audit found that California "improperly claimed" millions in federal Medicaid funds for services to this population, and Sacramento now seeks an additional $12.5 million annually to fund care for these recipients.
How is California able to pull this off? Medicaid funding remains so opaque and unaccountable that the state can inflate the cost of health care services to extract more money from federal taxpayers. According to the Paragon Institute, states like California have developed Medicaid financing schemes that amount to legalized money laundering, allowing them to siphon billions in federal funds without real state contributions, often diverting those dollars well beyond its intended purpose.
The latest example is the manipulation of intergovernmental transfers to inflate ambulance costs above what the market says they should be. Newsom is demanding that federal taxpayers subsidize reimbursement rates for public ambulance providers at nearly $1,600 per transport, while private ambulance companies – operating without subsidies – are paid only $339 for the same trip. This is no rounding error. It’s a baseless request for a payment rate nearly 500% higher for government-run services.
This is a massive funding boost that doesn't improve care or health outcomes. Instead, it launders federal dollars into unrelated expenses and pension liabilities. In California, these funds are routinely diverted from actual patient care to cover pension shortfalls and other budget holes, which is illegal.
For further proof, look at the dire situation of private ambulance providers. In 2022, the nation's largest provider had to halt non-emergency transports in Southern California thanks to artificially low reimbursement rates that make it impossible to compete with publicly subsidized rivals. Meanwhile, public sector pensions are protected, and government-run services enjoy windfalls, confirming that the system is rigged in favor of well-connected insiders, not patients.
The Trump administration has an opportunity to fix this mess. California’s State Plan Amendment (SPA) 25-0002 is currently pending approval by the Centers for Medicare & Medicaid Services. The president should direct CMS Administrator Dr. Mehmet Oz to categorically reject this $1,600 ambulance fee hike and call on Congress to put an end to the abuse of IGTs. Otherwise, his administration would be an active participant in a scheme that penalizes private enterprise, rewards government incompetence, and forces hardworking Americans across the country to bail out California’s fiscal irresponsibility.
President Trump is committed to America First in all things. He should prove it by stopping California's use of federal Medicaid dollars to fund illegal benefits, pension bailouts, and politically motivated giveaways. He should order Dr. Oz to reject California’s pending State Plan Amendment, demand accountability, and make sure Medicaid dollars only go to the people that Congress intends to get them. Now that the shutdown seems over, he can and should bring an end to this kind of nonsense permanently.
An experienced journalist and commentator who has contributed to various media outlets and is a highly regarded political analyst, Peter Roff is a former UPI and U.S. News columnist who is now affiliated with several public policy organizations. You can reach him at RoffColumns AT GMAIL.com and follow him on social media @TheRoffDraft.
