It’s not just Minnesota. Or just childcare. The government’s deepest honeypot is blue state Medicaid.
And nowhere does the corruption run deeper than in New York State, where everyone wants a piece of a $120 billion honeypot.
You’ve seen the video.
Nick Shirley, a citizen journalist (aka journalist), traveled across Minnesota looking for fraud in state-funded daycare centers run largely by Somali immigrants. He found clear evidence of a crime – and attracted a global audience to X.
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Shirley’s 42-minute video has now been viewed more than 115 million times, even prompting a delighted response from Governor Tim Walz (last seen exaggerating his military service).
Shirley deserves the attention. But when it comes to waste, fraud and abuse in government programs, there’s nothing that can stop health care spending. Especially in blue states, and especially since the Affordable Care Act and COVID-era federal subsidies allowed for expanded Medicaid coverage with an endless federal safety net.
And nowhere is this more evident than in New York.
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A few weeks ago I received an email with the subject line “Health Care and the $2,100 Cab Ride.” The email started:
“I have a friend who drives a cab in XXX NY. He estimates that 80% of cab fares are paid by Medicaid…
“Yesterday he made a round trip from XXX to Boston where a kid had a two hour appointment at Boston’s Shriners [Children’s] Hopital. The rate? $1,058.37 – each way. A total of $2,116.74.”
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It appears this was not a direct payment/bill to Medicaid, but a hospital payment from a fund they have for such “needs”. I think it’s safe to assume that these funds will ultimately be supported by federal dollars. His opinion? 37% – $783.
The email included a photo of the fare. The unusual name on it matches the unusual name of a child from a refugee family who was publicly injured in a freak accident.
The city where the child lives has several hospitals.
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What exactly does this hospital in another state offer, especially when it takes an entire day in the back of a cab to get to an appointment and back?
How much does all this care cost, when a single appointment costs $2,100 – the cost of a round-trip business class flight, across the country – just for transportation (not including the surcharge the hospital adds)?
And who pays for all this care for a poverty-stricken refugee family from one of the poorest countries in the world?
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The first two questions have no answers.
The third, however, does. Local (in New York, counties and New York City contribute to Medicaid), state, and especially federal taxpayers. And expenses are rising unstoppably.
Year after year, conservative think tanks — and sometimes even nonpartisan good government groups — write articles about how out of control New York’s Medicaid program has become. Year after year, Republican lawmakers at the state and federal level complain. Sometimes state and federal prosecutors even attack particularly egregious fraud.
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But nothing ever changes, except that the numbers increase.
In 1988, New York had a population of about 18 million and spent about $10 billion on Medicaid. Today the state has about 20 million people – and spends about $120 billion. Even after adjusting for inflation, New York spends about four times as much per person.
After a period of somewhat slower growth in the 2000s, spending has recently accelerated again — largely as state Democratic politicians have realized that the federal government will hold back more and more spending.
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I expect to have more to say about New York’s Medicaid program in future articles, because it’s impossible to untangle the crisis in American medicine from the crisis in American medical spending — and the honeypot New York has created captures the essence of the problem.
If every state spent at the same level as New York, the United States would spend about $2 trillion on Medicaid alone — yet there is no evidence that patients in New York are healthier or receive better care than patients in states that spend much less.
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I am more convinced than ever that the system’s out-of-control financial incentives are not only putting the entire federal government on a fast track to financial ruin – they are also leading to poorer care for many, many Americans.
The road to hell is paved with $2,100 cab rides.
Editor’s note: This column first appeared on Author’s Substack, “Unreported truths.”
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