Gov. Gavin Newsom (D-CA) is seen by many as progressives’ leading voice on healthcare policy. Congress and the executive branch have been pushing back against his advocacy for using taxpayer dollars to cover illegal immigrants at a time when some of his Democratic allies in Congress even risked a government shutdown to defend the idea.
Meanwhile, California under Newsom has become the poster child for using federal loopholes to direct taxpayer money to illegal immigrants. He’s even attacked the White House for instituting common-sense work requirements for able-bodied adults — criticizing reforms that simply ask people to work in exchange for benefits. In doing so, Newsom has prioritized benefits for those who refuse to work over citizens who do.
What the media rarely mentions is that California’s reckless spending comes at a steep price.
To pay for these policies, the state is instituting sweeping price controls on what government pays its hospitals. As the long gas lines of the 1970s proved, price controls don’t punish corporations — they punish the very consumers they’re intended to help. When bureaucrats decide what something is “worth,” shortages follow. Those who suffer most aren’t the wealthy or the well-connected but the working-class families who lose access to care and whose hospitals are often forced to close their doors.
It’s no surprise that Newsom supports price controls. But what’s truly astonishing is that a Republican-led state is now following his lead.
As the Indiana Business Journal recently reported, Indiana is proposing to have the government set some hospital prices directly, copying components of Newsom’s California model.
Indiana’s plan is particularly troubling because it pegs hospital reimbursement rates to the state’s already rock-bottom Medicaid payments, which are already the lowest in the region. Additional legislation would even threaten hospitals’ nonprofit status if procedure prices exceed state averages starting in 2029.
In other words, the state is importing one of California’s worst policy mistakes under the guise of cost containment. While well-intended, these price controls will risk devastating the very communities they claim to protect.
Rural hospitals, already operating on razor-thin margins, could be forced to close entire departments or shut down altogether. One Republican county official warned this would have “enormous consequences for rural hospitals” and the “vulnerable communities” they serve. Medicaid patients could see fewer providers, longer travel times, and reduced access to care, especially in Indiana’s aging, lower-income counties that depend most on local hospitals.
The political consequences would extend far beyond Indiana’s borders.
When hospitals close and access deteriorates, Democrats will blame the Republican-controlled White House and Congress for pushing the states to become more fiscally responsible when it comes to Medicaid. That’s not fair — or true. The White House and Congress never called for price controls, and conservative states should know better than to adopt failed blue-state policies.
If Indiana normalizes Newsom-style price controls, other red states could follow, creating a dangerous national precedent that gives legitimacy to the very model conservatives should be rejecting. Red-state governors should be leading the resistance to California-style healthcare regulation, not copying it.
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There’s a better path: reduce waste, eliminate fraud, enforce work requirements, and protect healthcare resources for the citizens who earned them.
It’s not too late for Indiana to change course. Here’s hoping it does before more red states follow suit.
Tom Price is a physician who served as Health and Human Services Secretary in 2017. He is also a former U.S. congressman from Georgia.
