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California is Third in the Nation for the Largest Growth in Medicaid Spending per Resident Since the ACA Took Effect in 2014

9NK Allstates Medicaid Growth CA
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Niklas Kleinworth Headshot SMALLER V2

Director, State Health Reform Initiative; and Policy Analyst

Niklas Kleinworth is the Director of the State Health Reform Initiative and a Policy Analyst at the Paragon Health Institute, focusing on Medicaid and state policy initiatives. He has served in state and federal policy roles since 2021.

This Paragon Pic shows the cumulative percent growth in Medicaid spending per resident for all 50 states from 2013 (the year before the Affordable Care Act Medicaid expansion took effect) to 2023. California ranks third in the nation at 184 percent—more than double the 90 percent average of all other states. Only Nevada and Kentucky experienced faster per-resident spending growth over this period.

California’s explosive Medicaid spending growth has been driven by a combination of expanding Medicaid to able-bodied, working-age adults and unauthorized immigrants, along with intensification of state financing gimmicks that shift costs to federal taxpayers. In nominal terms, California’s Medicaid spending  grew nearly fourfold from 2013 to 2025.

This rapid increase in spending was initially driven by California enrolling far more people in the ACA Medicaid expansion than expected. As of federal fiscal year 2023, 5.7 million able-bodied, working-age adults are enrolled in MediCal. This figure has long outpaced original projections, reaching 4.6 million enrollees compared to the expected 910,000 by 2020. Expansion enrollees now represent 36 percent of California’s Medicaid population.

Exacerbating the ill effects of Medicaid expansion, California created new programs to cover undocumented immigrants with Medicaid and to eliminate the asset test for long-term care. These initiatives were supported by legalized money-laundering schemes to collect $9.5 billion in federal funds with no state contributions during state fiscal years 2024 and 2025. Actual participation in these programs doubled original projections lending to Medicaid’s substantial growth.

The One Big Beautiful Bill last year the curbed these and similar schemes. However, California continues to exploit intergovernmental transfers (IGTs) that create massive payment disparities between public and private providers. As one example, California is about to pay public ambulances five times more than private providers in a scheme to collect more federal matching dollars.

As a recent City Journal investigation documented, this explosion in spending has occurred alongside what experts estimate to be as high as 25 percent. The state’s oversight failures, such as suspending prior authorization requirements, have created an environment ripe for waste, fraud, and abuse.

9NK Allstates Medicaid Growth CA

This Paragon Pic shows the cumulative percent growth in Medicaid spending per resident for all 50 states from 2013 (the year before the Affordable Care Act Medicaid expansion took effect) to 2023. California ranks third in the nation at 184 percent—more than double the 90 percent average of all other states. Only Nevada and Kentucky experienced faster per-resident spending growth over this period.

California’s explosive Medicaid spending growth has been driven by a combination of expanding Medicaid to able-bodied, working-age adults and unauthorized immigrants, along with intensification of state financing gimmicks that shift costs to federal taxpayers. In nominal terms, California’s Medicaid spending  grew nearly fourfold from 2013 to 2025.

This rapid increase in spending was initially driven by California enrolling far more people in the ACA Medicaid expansion than expected. As of federal fiscal year 2023, 5.7 million able-bodied, working-age adults are enrolled in MediCal. This figure has long outpaced original projections, reaching 4.6 million enrollees compared to the expected 910,000 by 2020. Expansion enrollees now represent 36 percent of California’s Medicaid population.

Exacerbating the ill effects of Medicaid expansion, California created new programs to cover undocumented immigrants with Medicaid and to eliminate the asset test for long-term care. These initiatives were supported by legalized money-laundering schemes to collect $9.5 billion in federal funds with no state contributions during state fiscal years 2024 and 2025. Actual participation in these programs doubled original projections lending to Medicaid’s substantial growth.

The One Big Beautiful Bill last year the curbed these and similar schemes. However, California continues to exploit intergovernmental transfers (IGTs) that create massive payment disparities between public and private providers. As one example, California is about to pay public ambulances five times more than private providers in a scheme to collect more federal matching dollars.

As a recent City Journal investigation documented, this explosion in spending has occurred alongside what experts estimate to be as high as 25 percent. The state’s oversight failures, such as suspending prior authorization requirements, have created an environment ripe for waste, fraud, and abuse.

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Niklas Kleinworth Headshot SMALLER V2

Director, State Health Reform Initiative; and Policy Analyst

Niklas Kleinworth is the Director of the State Health Reform Initiative and a Policy Analyst at the Paragon Health Institute, focusing on Medicaid and state policy initiatives. He has served in state and federal policy roles since 2021.