Remember Newsom’s 2022 Backroom Deal to Cut Out Competition and Force All of California into Kaiser?

Remember when Governor Gavin Newsom inked the backroom deal with Kaiser for statewide Medi-Cal health?

He never learns, does he?

Last week we learned that the cost of Newsom’s policy of giving free medical coverage to every illegal immigrant in the state ballooned to $9.5 billion. Newsom announced he would need a $3.4 billion “loan” just to continue making payments for this month. But Wait! There’s More! Now we learn that the Newsom administration just asked for another $2.8 billion to be able to pay Medi-Cal providers through the end of the fiscal year – totaling $6.2 billion in the hole just for Medi-Cal.

DOGE needs to take a deep dive into California’s Medi-Cal program.

Gov. Newsom expanded Medi-Cal to cover all illegal aliens. The bills are coming due and Newsom is overdrawn.

So the Kaiser deal in 2022 makes more sense.

In 2022, only days after Newsom’s proposed Single Payer state-controlled health care bill failed to even get to a vote in the Assembly, a medical industry news website announced “California inks sweetheart deal with Kaiser Permanente, jeopardizing Medicaid reforms.”

While many heaved a sigh of relief that private health care in California was saved, a few select Newsom advisors were meeting behind closed doors, away from elected lawmakers, to ink a similar deal. It was no wonder Newsom wasn’t hammering the Legislature to pass the state-controlled health care bill Assembly Bill 1400.

Kaiser Permanente gave nearly $100 million in charitable funding and grant money to boost Newsom’s efforts against homelessness, COVID response, and wildfire relief since 2019, Modern Healthcare reported in 2022.

The plan was to cut out the competition and make everyone in California under Kaiser, a doctor familiar with the deal told the Globe.

Because if the Legislature and governor couldn’t pass single payer, the next best alternative was to place all of California under Kaiser. And, Kaiser’s Medi-Cal enrollment was already expected to grow by 25% under the contract, serving 32 counties.

How did the 2022 Kaiser deal come about? Modern Healthcare reported:

“In 2020, KP gave $25 million to one of Newsom’s key initiatives, a state homelessness fund to move people off the streets and into hotel rooms, according to a KHN analysis of charitable payments filed with the California Fair Political Practices Commission. The same year, it donated $9.75 million to a state COVID relief fund.

In summer 2020, when local and state public health departments struggled to contain COVID spread, the healthcare giant pledged $63 million in grant funding to help contract-tracing efforts.”

and:

“Jim DeBoo, Newsom’s executive secretary, used to lobby for KP before joining the administration. Toby Douglas, a former director of the state Department of Health Care Services, which runs Medi-Cal, is now Kaiser Permanente’s vice president for national Medicaid.”

and:

“Kaiser Permanente historically has not played a very big role in Medi-Cal, and the state has long recognized that we would benefit from having them more engaged because they get better health outcomes and focus on prevention,” said Daniel Zingale, a former Newsom administration official and health insurance regulator who now advises a lobbying firm that has Kaiser Permanente as a client.”

“Zingale is a strong proponent of Gov. Newsom’s desire to restore the Obamacare mandate, and universal coverage for all people living in California,” the Globe reported in January 2019 when Gov. Gavin Newsom named Zingale Senior Adviser on Strategy and Communications.

So it was interesting to see Kaiser last week cover the story admitting Newsom’s Medi-Cal financial situation and fraud:

“California’s Medicaid program has borrowed $3.4 billion from the state’s general fund — and will likely need even more — to cover ballooning health expenses for 15 million residents with low incomes and disabilities.

The state Department of Finance disclosed the loan to lawmakers in a letter late Wednesday, noting funds were needed to make critical payments to health care providers in Medi-Cal, the state’s version of Medicaid. In recent months, Gov. Gavin Newsom’s administration has warned of skyrocketing health care costs, including higher prescription drug prices and increased enrollment by newly eligible seniors and immigrants without legal status.

How ironic that Newsom was warning about “skyrocketing health care costs,” when he’s responsible for creating the crisis – first by trying to shoehorn in single payer healthcare to all of California, and when that didn’t work, by expanding Medi-Cal to anyone who can fog a mirror and illegal immigrants.

A Kaiser doctor told the Globe that the Newsom administration and the Kaiser CEO recently made a deal so both parties can look good. But Kaiser members are furious because wait time are insane because the deal meant they added more people into Kaiser plans, but did not increase the number of doctors, nurses or staff. So you have all these illegal immigrants getting free Kaiser healthcare over Kaiser’s paying members.

Kaiser continues:

“The cost overrun adds a new layer of difficulty for Democrats who control the legislature and are already grappling with congressional budget plans that could slash Medicaid funding, which accounts for 60% of Medi-Cal’s $174.6 billion budget.”

Let this sink in: federal Medicaid funding accounts for 60% of Medi-Cal’s $174.6 billion budget – about $116 billion from the federal government into California’s Medi-Cal coffers.

Remember when California’s entire state budget was less than $100 billion? Not that long ago when Jerry Brown was governor.

When Gov. Jerry Brown was (re)elected in 2011, the state budget was $98 billion. The state’s population was a little over 38 million. Brown doubled the budget to $199.3 billion in 8 years – with no measurable increase in population. Gov. Gavin Newsom inherited Brown’s $199.3 billion budget, and has grown it to $330 billion in 5 years – while losing population.

Newsom just confessed last week that California’s Medi-Cal is insolvent. As California Congressman Kevin Kiley noted, “the cost of Newsom’s policy of giving free coverage to every illegal immigrant in the state has ballooned to $9.5 billion, and he’s now asked for a $3.4 billion “loan” just to continue making payments for this month.”

Newsom has to borrow $6.2 Billion to cover the massive shortfall in Medi-Cal, California’s version of Medicaid, free to low-cost health coverage for low-income individuals and families, “regardless of their immigration status.”

“This gives added urgency to my bill to end this scandal by requiring Medi-Cal to be reserved for legal residents,” Congressman Kevin Kiley said.

Kiley (R-CA) introduced the No Medicaid for Illegal Immigrants Act, legislation that would prohibit states from using both federal and state Medicaid funds to provide services for illegal immigrants, Contra Costs News reported. “This common sense legislation ensures that taxpayer-funded healthcare benefits are preserved for those who lawfully qualify, prioritizing the needs of American citizens and legal residents while promoting fairness and fiscal responsibility.”