Sen. Kennedy: ‘What the Hell Are We Doing About It?’ Medi-Cal Is Now Paying for Spiritual Interventions.
- $222BProjected California Medi-Cal total spending in 2026 — more than double the ~$100.7B level the program ran in 2019. Federal taxpayers cover roughly $9 of every $10 in new spending.
- $37.4BMedicaid national improper-payment loss in FY2025 (6.12% rate, CMS Fact Sheet) — up from $31.1B / 5.09% in FY2024. The structural fraud floor underneath the California question.
- $1.3BCalifornia Medi-Cal reimbursements deferred and partially suspended by the Trump administration in May 2026 over fraud claims — described as the 'largest ever' federal Medicaid freeze on a single state.
- Oct 16, 2024Day CMS approved 1115 waivers for California, Arizona, New Mexico, and Oregon to reimburse 'traditional healers' under Medicaid — the first time in the 60-year history of the program. Newsom announcement same day.
- $9.5BCalifornia Medi-Cal spending in FY 2024-25 on health-care coverage for undocumented adults — frozen to new enrollees starting Jan 1, 2026; $30/month premium starting July 2027.
- $1.1-1.2TSen. John Kennedy (R-LA) ten-year estimate of total Medicaid fraud nationwide, delivered in his May 20 Senate floor speech the day after the Acting AG hearing.
On Monday, May 19, 2026, the Senate Appropriations Committee held its FY 2026 oversight hearing on the Department of Justice. Acting Attorney General Todd Blanche sat for the witness panel. Sen. John Kennedy (R-LA), the Louisiana Republican whose floor questioning has been gradually pulling Medi-Cal's spending architecture into public view across multiple recent hearings, used his five minutes to pivot from DOJ priorities to California Medicaid fraud. Within thirty seconds, he was reading a list of services billable to taxpayers under the program. The word that lit the C-SPAN cable feed was exorcisms.
The rhetorical shorthand is doing real work. What Kennedy is actually surfacing is a Centers for Medicare and Medicaid Services (CMS) Section 1115 waiver approved on October 16, 2024— the last full quarter of the Biden administration — that allowed California, Arizona, New Mexico, and Oregon to use Medicaid (and the federal $9-of-$10 match) to reimburse American Indian / Alaska Native traditional health-care practices for the first time in the 60-year history of the program. Coverage includes ‘traditional music, songs, dancing, and drumming,’ ‘ spiritual interventions,’ ceremonies, rituals, herbal remedies, and substance-use-disorder counseling by tribal-recognized spiritual leaders.
Gov. Gavin Newsom (D-CA) signed California into the framework the same day. The official rationale, per the governor's press release: ‘helping heal the historical wounds inflicted on tribes.’ California's implementation took effect January 1, 2025. As of May 2026, the California Department of Health Care Services has notpublished itemized public spending totals on the spiritual-intervention line — Fox News noted in its May 21 write-up that ‘it remains unclear how much Medi-Cal has spent.’ That is the accountability gap Kennedy is trying to close.
“California's got 12% of the population in the last ten years. They're responsible for half of these new so-called health providers to provide exorcisms and other things. Now, what the hell are we doing about it? Why has this gone on for so long?”
Sen. John Kennedy (R-LA) · Senate Appropriations DOJ hearing, May 19, 2026
Blanche's response was the cleanest defense the new DOJ has on this beat. He named the structural answer the department has tried to apply since January 20, 2025:
“Yes, Senator, and that's why this department stood up a whole new fraud division and is prosecuting fraud because it's so systematically taking money from the American taxpayer that we very much believe that it needs its own stand-up structure.”
Acting AG Todd Blanche · DOJ · Senate Appropriations testimony, May 19, 2026
Full video of the Senate Appropriations exchange is on the C-SPAN event page linked in the Sources panel below; the embedded YouTube mirror was pulled by the uploader and is no longer available.
Per the CMS approval (October 16, 2024) and the Center for Health Care Strategies' technical explainer, four states received simultaneous 1115 waivers for ‘Medicaid Coverage of American Indian and Alaska Native Traditional Health Care Practices’:
- California — Gov. Gavin Newsom (D), signed same day
- Arizona — Gov. Katie Hobbs (D)
- New Mexico — Gov. Michelle Lujan Grisham (D)
- Oregon — Gov. Tina Kotek (D)
All four are Democratic governors. The substantive coverage, per the California Department of Health Care Services implementation document: providers must be recognized as a tribal spiritual leader for at least two years, or as a ‘natural helper’ trusted in a tribal community. Billable services include ‘music therapy (traditional music, songs, dancing, drumming),’ ‘spiritual interventions’ (ceremonies, rituals, herbal remedies), and substance-use-disorder counseling.
“[Tribal traditional-healing coverage helps] heal the historical wounds inflicted on tribes.”
Gov. Gavin Newsom (D-CA) · gov.ca.gov press release, October 16, 2024
The day after the Blanche hearing, Kennedy delivered a formal Senate floor speech extending the critique. The spiritual-intervention waiver, in his framing, isn't the only Medi-Cal billing line at issue. He named:
“California Medicaid will pay for housing, herbal medicines, in-home chefs, student loan repayments, and exorcisms... Medicaid is supposed to be for sick people. When you're spending other people's money, it's real easy to expand beyond that.”
Sen. John Kennedy (R-LA) · Senate floor speech, May 20, 2026
The federal match Kennedy keeps citing is the structural ask. Under the federal Medicaid statute, for every $1 of California-funded Medi-Cal services, the federal government kicks in roughly $9 in matching dollars on most new spending categories. California's 2026 Medi-Cal total of approximately $222 billion is more than double the 2019 number. The total federal-share commitment embedded in that growth is the part Kennedy considers taxpayers, not Sacramento, are ultimately financing.
Under the Kennedy critique sits the structural CMS data. The agency's FY 2025 Improper Payments Fact Sheet (published spring 2026) reports a national Medicaid improper-payment rate of 6.12 percent, totaling $37.39 billionin improper FY 2025 payments — up from $31.10 billion / 5.09 percent in FY 2024. The GAO's June 2025 audit GAO-25-107770 notes the headline rate understates actual exposure on Managed Care because the PERM measurement methodology misses payments to ineligible providers and for services not delivered.
“$1.1 to $1.2 trillion in Medicaid fraud over a ten-year period.”
Sen. John Kennedy (R-LA) · Senate floor speech estimate, May 20, 2026
The hearing landed three weeks into an active enforcement cycle. In May 2026, the Trump administration froze $1.3 billion in Medicaid reimbursements to California (with $1.1 billionformally suspended on fraud claims) — described by CalMatters and Nextgov as the ‘largest ever’ federal Medicaid freeze on a single state. The freeze sits alongside parallel state-level enforcement: California AG Rob Bonta (D) in April 2026 announced a $267 million Los Angeles hospice fraud takedown (21 defendants charged); an Orange County $270 million Medi-Cal prescription-fraud guilty plea landed the same month.
Newsom himself signaled course-correction on Medi-Cal in 2025-26: the state froze new undocumented-adult enrollment on January 1, 2026 after the $9.5 billion FY 2024-25 cost line (per the Center Square) made it politically untenable; a $30 monthly premium begins July 2027. The structural pattern is California Democrats scaling back coverage commitments only after the federal government begins clawing back funds.
The largest Medicaid fraud freeze in history just hit California. Over $1 BILLION DOLLARS. Newsom is paying for EXORCISMS and meals for ILLEGAL ALIENS with YOUR MONEY. We are putting a stop to it!
Paraphrased commentary · not a verbatim post
Substance cross-referenced via CalMatters and Nextgov reporting on the May 2026 $1.3B Medi-Cal payment freeze and the broader administration fraud-crackdown messaging. Rendered as a buttonless static QuoteCard.
Medi-Cal needs to be for sick people. Period. If California's expanded benefits include reimbursing spiritual interventions while we cannot fund cancer screenings on time, the priorities are upside down. HHS is going to fix that.
Paraphrased commentary · not a verbatim post
Sec. Kennedy framing on Medi-Cal scope and benefit prioritization. Paraphrased from public administration statements; rendered as a buttonless static QuoteCard. Note: the spelling-confusion of two Kennedys (Sen. John R-LA and HHS Sec. Robert F.) is editorial; they are not related.
The trigger:A May 19, 2026 Senate Appropriations hearing on the DOJ budget. Sen. Kennedy (R-LA) pivots to Medi-Cal billing. Acting AG Blanche acknowledges DOJ has ‘stood up a whole new fraud division’ to deal with it.
The waiver: CMS Section 1115 waivers approved October 16, 2024 (Biden era) for CA, AZ, NM, OR — all Democratic governors — for tribal traditional-healing Medicaid coverage. First time in 60-year program history.
The accountability gap:California has not published itemized public spending data on the spiritual-intervention billing line since implementation January 1, 2025. Fox: ‘it remains unclear how much Medi-Cal has spent.’
The federal response: $1.3B Medi-Cal reimbursement freeze May 2026 ($1.1B suspended on fraud grounds). DOJ standalone fraud division. CMS+HHS improper-payments accountability tracking.
The federal floor: $37.4B in Medicaid improper payments nationally in FY 2025 alone, per CMS. GAO says the real number is higher.
California Medicaid is now reimbursing housing, herbal medicines, in-home chefs, student loans, and exorcisms. Medicaid is supposed to be for sick people. When you're spending other people's money, it's real easy to expand beyond that. It's got to stop now.
Substance from Sen. Kennedy's May 20, 2026 Senate floor speech as published on kennedy.senate.gov. Rendered as a hand-rolled XPostCard.
California is the first state to allow Medi-Cal coverage of tribal traditional healing for substance use treatment. We are helping heal the historical wounds inflicted on tribes — including by the health care system that denied tribal knowledge for generations.
Substance from Newsom's October 16, 2024 press release on gov.ca.gov. Rendered as a hand-rolled XPostCard.
Kennedy's ‘exorcism’ was rhetorical shorthandfor a documented Biden-era CMS Section 1115 waiver approved October 16, 2024 covering tribal traditional healing — ceremonies, rituals, spiritual interventions, herbal remedies — under California Medi-Cal. Four states, all Democratic governors. California implementation began January 1, 2025.
The accountability gapis real and measurable: California has not published itemized spending data on the spiritual-intervention billing line. Fox: ‘it remains unclear how much Medi-Cal has spent.’
The federal Medicaid improper-payments rate ran 6.12% / $37.4B in FY 2025 (CMS). GAO's 2025 audit says Managed Care methodology understates the real exposure.
The Trump administrationfroze $1.3 billion in CA Medi-Cal reimbursements in May 2026 over fraud claims, opened a standalone DOJ fraud division (acknowledged on the record by Acting AG Blanche), and has Sec. RFK Jr. publicly arguing that scope expansion has outrun the program's sick-care mission.
The structural questionis whether the federal government's $9-of-$10 match should fund ceremonies, herbal remedies, in-home chefs, and housing under a program statutorily defined as medical assistance to the indigent. Kennedy's answer is no. The California waiver is the policy artifact arguing yes.