Newsom defends paying for housing and food with Medicaid as GOP calls it fraud

California Gov. Gavin Newsom is publicly defending his state's use of Medicaid dollars to pay for housing, food, and other social services, after Sen. John Kennedy of Louisiana attacked the spending in back-to-back appearances in May as "outrageous fraud" and "stealing." Kennedy argued the money, meant for basic medical treatment, is being diverted to unconventional services. "The California Medicaid program will pay for herbal medicines, meal deliveries. They'll pay for housing," he said. "I don't know what housing has to do with healthcare." Newsom, a Democrat weighing a presidential run, counters that the multibillion-dollar effort under Medi-Cal is legal, evidence-backed, and cheaper in the long run: paying for non-clinical needs, he says, keeps medically frail patients out of emergency rooms and hospitals. "It's about whole-person care," he said.

The dispute is a philosophical one. Conservatives say social services strain Medicaid and are not healthcare; liberals argue prevention saves money. That divide now has federal weight behind it: the Trump administration has rescinded the Biden-era policy that encouraged state Medicaid programs to address health-related social needs, and congressional Republicans have moved to rein in billions in spending on low-income and disabled people.

The people in the middle are patients like Lucy Rodriguez, 73, who teaches Mexican folk dancing in Hollister on California's Central Coast. An intensive case manager with Titanium Healthcare, which contracts with insurers, helps her manage her diabetes, high blood pressure, and kidney disease, keeps her on top of appointments and prescriptions, and picks up free food boxes. On both Medicare and Medi-Cal, Rodriguez has had utility bills covered and was recently approved for home-delivered meals. "This has been a godsend," she said. If federal action narrows what Medicaid can fund, that coordination is what patients and their care managers stand to lose.