Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services (CMS) under President Donald Trump, has accused several Democrat-led states of deliberately exploiting Medicaid, saying fraud has become a "feature" rather than a flaw of the programme. In an interview with Fox News Digital, he singled out California Governor Gavin Newsom and urged him and other Democratic governors to join the administration's anti-fraud efforts, framing the issue as a significant drain on federal funds.

Oz argued that some states use Medicaid-funded care programmes as an economic engine, drawing down federal reimbursements to pay otherwise unemployed workers and then taxing that income to enrich the state — a practice he said is colloquially termed "Medicaid-ing it". He further claimed the arrangement carries political incentives, alleging that unionising these workers channels union dues into political action committees that predominantly benefit the Democratic Party in local and state elections. Oz named Newsom as the main figure who, he said, had failed to address fraud despite internal warnings, adding that he believed the governor was "embarrassed". The remarks are one official's assertions and the article does not include a response from Newsom or the states named.