It’s not just Minnesota. Or just daycares. The deepest government honeypot is blue-state Medicaid.
And nowhere does 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 a journalist), traveled around Minnesota looking for fraud at state-funded daycare centers largely run by Somali immigrants. He found obvious evidence of malfeasance — and attracted a worldwide audience on X.
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Shirley’s 42-minute video has now been viewed more than 115 million times, even forcing a huffy response from Gov. Tim Walz (last seen exaggerating his military service).
Shirley deserves the attention. But when it comes to waste, fraud and abuse in government programs, nothing holds a candle to healthcare spending. Especially in blue states, and especially since the Affordable Care Act and then COVID-era federal subsidies allowed expanded Medicaid coverage with an endless federal backstop.
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, “Healthcare and the $2,100 Taxi Ride.” The email began:
“I have a friend who drives a taxi in XXX NY. He estimates that 80% of the cab fares are paid for by Medicaid…
“Yesterday, he made a round tripper from XXX to Boston where a child had a two-hour appointment at Boston’s Shriners [Children’s] Hospital. The fare? $1,058.37 — EACH way. $2,116.74 in total.”
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It appears this was not a direct pay/bill to Medicaid, but a hospital pay from a fund they have for such “needs”. I think we can safely assume these funds are either backed by state of federal dollars at the end of the day. His take? 37% — $783.
Attached to the email was a photo of the fare. The unusual name on it matches the unusual name of a child from a refugee family who was publicly reported injured in an odd accident.
The city where the child lives has several hospitals.
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What exactly is this hospital in a different state providing — especially when getting to an appointment and back requires a full day in the back of a taxi?
How much is all of this care costing, if a single appointment costs $2,100 — the cost of a round-trip business-class, cross-country plane ticket — for transportation alone (before whatever markup the hospital is adding)?
And who is paying for all this care for a penniless refugee family from one of the poorest countries in the world?
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The first two questions have no answer.
The third does, however. Local (in New York, counties and New York City contribute to Medicaid), state — and most of all — federal taxpayers. And the spending is skyrocketing unstoppably.
Year after year, conservative think tanks — and sometimes even non-partisan good government groups — write papers 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 get larger.
In 1988, New York had about 18 million people 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 is spending about four times as much per person.
In fact, after a period of somewhat slower growth in the 2000s, spending has recently accelerated again — mainly because the state’s Democratic politicians have realized that the federal government will backstop 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 is impossible to unravel 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 those in states that spend far less.
I am more convinced than ever that the system’s out-of-control financial incentives aren’t just putting the entire federal government on a fast track to financial ruin — they are leading to worse care for many, many Americans.
The road to hell is paved with $2,100 cab rides.
Editor’s note: This column first appeared on the author’s Substack, “Unreported Truths.”
