(The Center Square) – The California Legislative Analyst’s Office reports the state’s drug spending has doubled since 2018, with a quarter of the increase coming from weight loss drugs and an unknown portion from drugs for illegal immigrants.
Drug spending for Medi-Cal, the state’s taxpayer-funded public health care program, has increased from approximately $4 billion in the 2018-2019 fiscal year to approximately $8 billion for 2023-2024.
In the same period, Medi-Cal enrollment rose from 33.2% of the state population to 38.2%, or growth of about 15%.
So how did drug spending double despite enrollment growing just 15%?
A quarter of the doubling is from the state’s coverage of weight loss drugs such as Ozempic; nearly two-thirds of Californians are overweight or obese, according to UCLA. The LAO says nearly 40% of Californians on Medi-Cal are obese, compared to 29% among the general population.
“The most notable increase (alone comprising 25 percent of the growth in overall spending over the period) was for specialty diabetes and weight loss drugs (known as Glucagon-Like Peptide-1, or GLP-1, agonists),” wrote the LAO. “Within the Medi-Cal program, semaglutide has comprised most of the utilization of GLP-1 agonists, mostly for Ozempic.”
Because benefits for illegal immigrants are not eligible for state funding or rebates that significantly reduce the cost of drugs, California taxpayers are picking up the non-rebate cost of drugs for the population.
“The state generally pays for the full cost of drugs for undocumented beneficiaries (as is the case for many other services to this population),” wrote the LAO. “Drugs to undocumented beneficiaries also generally are not eligible for rebates.”
The listed price for a dose of Ozempic is nearly $1,000.
Notably, the LAO was not able to assess the cost of providing drugs to illegal immigrants due to lack of available data.
“Though the administration historically has reported overall fee-for-service utilization and spending trends by major Medi-Cal population, these data have not included breakouts for undocumented populations,” wrote the LAO.
California expanded Medi-Cal eligibility to illegal immigrant children in 2016, illegal immigrant young adults up to 25 years old in 2020, illegal immigrants 50 and older in 2022, and all illegal immigrants in 2024.
California has spent $9.5 billion on illegal immigrants’ healthcare this year. Lawmakers say Gov. Gavin Newsom’s administration has reported that half of the doubling in Medi-Cal costs over the past six years has been from expanding coverage to illegal immigrants.
Newsom has requested a $6.2 billion bailout for Medi-Cal this year to cover higher-than-expected expenditures, leading lawmakers to request an audit of the rapidly growing program.
