The federal government is holding back another $1.2 billion in Medicaid money from California, saying the state’s in-home care program has grown far faster than anyone else’s, down to paying people to carry groceries upstairs.
Story Snapshot
- Federal health officials put a hold on $1.2 billion in Medicaid payments for California’s personal-care program.
- Dr. Mehmet Oz, who runs Medicare and Medicaid, says the program grew 24% in three years, twice the average of other states, and pays people to carry groceries upstairs for mom, a chore he said many people would do for free.
- It is the third hold on California Medicaid money this year, after $1.3 billion in May and more than $867 million in July.
- Gov. Gavin Newsom’s office says the growth comes from keeping people out of costlier nursing homes, not from fraud.
What Is Being Held and Why
The money is federal Medicaid funding for In-Home Supportive Services, a California program that pays family members and other caregivers to help older and disabled people with tasks like washing, dressing and eating at home. The hold is a deferral, which means the payments are set aside while federal reviewers check the bills. The Centers for Medicare and Medicaid Services, the federal agency that runs Medicaid, could later pay the money or cancel it, and if it is canceled, California would have to cover the cost.
Oz said the reason is how fast the program has grown. “California has been growing that program 24 percent in the last three years,” he said. “That’s twice the rate than every other state average in the country.” He called that growth “impossible for us to understand how that could be so.” He gave an example of what the state pays for: “you’re paying someone to carry groceries upstairs for your mom.” He added, “Many of you would carry groceries upstairs for your mom for free, I would think.”
California pushes back. “We hate fraud,” Newsom’s press office wrote on X. “But that’s NOT what this is.” The governor’s office says the program grew because the state is “keeping more people OUT of far more expensive nursing homes.” The state has protested the holds, saying the federal government has not shown enough evidence of fraud and that the growth reflects rising demand. Newsom has called the holds politically motivated.
How the Announcement Unfolded
Oz made the announcement at the White House on Tuesday, October 20, at an Oval Office event with President Trump and Vice President JD Vance. He said he was speaking on behalf of Health and Human Services Secretary Robert F. Kennedy Jr., his boss. “We are going to defer $1.2 billion more dollars from California,” Oz said. He added that the state had been sent notice and that the hold was “because of the growth of personal care services in California.”
At the same event, Trump and Vance rolled out a $25 million Fraud Whistleblower Incentive Program run by the Justice Department. People whose tips lead to a fraud conviction or a major federal enforcement action could receive 1 percent of the fraud amount. Tips go to fraud.gov.
The Bigger Enforcement Picture In California
This is the third time this year Washington has held back California Medicaid money. In May, Vance announced a $1.3 billion hold over billing patterns officials called possibly fraudulent. On July 21, Kennedy said the agency was holding more than $867 million. “Every dollar the federal government allows to be lost to fraud, waste, and abuse is a dollar stolen from American patients and the American taxpayer,” Kennedy said at the time.
The holds come out of the administration’s anti-fraud push. Trump signed an executive order on March 16 creating an Anti-Fraud Task Force, which Vance leads. The federal government has also held back Medicaid payments to Minnesota over fraud claims. California’s full Medicaid program, called Medi-Cal, is budgeted at about $222 billion this fiscal year.
What This Means For Taxpayers And Families
For taxpayers, the administration’s message is that fast growth earns a closer look before more federal money goes out. For the families who count on in-home help, what matters is whether the care keeps coming while the two governments argue. Federal reviewers will decide whether the $1.2 billion is paid or canceled.
The Bottom Line
The administration is using federal purse strings to demand proof that a fast-growing program is paying only for care it should. California says it built that program on purpose, to keep people at home and out of nursing homes. Oz’s grocery example is the administration’s case in a sentence: Washington wants to know which tasks taxpayers are paying for and why one state’s bill grew twice as fast as everyone else’s.
Sources:
washingtonexaminer.com, theepochtimes.com, ntd.com, c-span.org, latimes.com, politico.com