California Governor Gavin Newsom, who is considered a likely contender for the 2028 U.S. presidential election, speaks about his new memoir "Young Man in a Hurry," during a book tour event in the state which traditionally holds the nation's first primary election for president every four years, at The Music Hall in Portsmouth, New Hampshire, U.S., March 5, 2026. REUTERS/Brian Snyder
(Sacramento, California) – California Governor Gavin Newsom is under renewed pressure as critics raise alarms over alleged fraud and mismanagement inside the state’s Medicaid program, known as Medi-Cal.
The controversy centers on claims that California’s taxpayer-funded health care system has suffered staggering losses tied to fraud, improper payments, and weak oversight. The figure now being circulated — $146 billion — has become a political firestorm, with Newsom’s opponents arguing it reflects a deeper failure of leadership in Sacramento.
Republicans and government watchdogs say the state expanded Medi-Cal too aggressively while failing to install strong enough safeguards to protect taxpayer dollars. They argue that fraudsters were able to exploit the system through questionable billing, fake patients, and abuse of state-funded health services.
The issue has gained even more attention after recent fraud cases involving California health care providers, including alleged schemes connected to hospice services. Those cases have fueled accusations that state officials ignored warning signs while billions of dollars flowed through the program.
Newsom’s allies have pushed back, arguing that critics are overstating the numbers and blurring the line between confirmed fraud, suspected waste, and broader improper payments. They maintain that California has taken enforcement action when fraud is discovered and that Medi-Cal remains a critical safety net for low-income residents.
Still, the allegations are creating a major political headache for Newsom. California already faces scrutiny over high spending, budget pressure, and the cost of expanded benefits. The Medi-Cal fraud claims now give conservatives a powerful new argument that the state’s progressive policies are leaving taxpayers exposed.
For Newsom’s critics, the question is whether California can account for where the money went and why the system was vulnerable in the first place. For the governor, the challenge is convincing voters that his administration can expand public programs without allowing fraud and waste to spiral out of control.
