January 12, 2007 4:13PM # Schwarzenegger’s Shakedown By [Michael F. Cannon](https://www.cato.org/people/michael-f-cannon) --- SHARE Much has been written about [TerminatorCare](http://gov.ca.gov/pdf/press/Governors_HC_Proposal.pdf), Gov. Arnold Schwarzenegger’s (R) plan to guarantee health coverage to all Californians by employing every lousy idea the Left has ever conjured. But much of what has been written about TerminatorCare is wrong. [Media accounts](http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/01/09/MNGBCNFC1N1.DTL) and even [some policy wonks](http://www.john-goodman-blog.com/arnolds-plan/) have reported that Schwarzenegger, through [the magic of Medicaid](https://www.cato.org/pub_display.php?pub_id=4049), would have taxpayers in other states pay for only half the cost of his plan. Would that that were so. Instead, Schwarzenegger actually proposes to use an old Medicaid trick that would put non-Californians on the hook for much more than half the cost. First, he would boost state payments to providers, which triggers federal matching funds. But then he would tax the providers so much that he would recover the state’s initial outlay plus most of the federal matching funds, which he would then use to finance the rest of the plan. At the end of the day, California would spend zero extra dollars on provider payments, yet the ruse would net an additional $1.3 billion from taxpayers in other states. After one cuts through the budget gimmicks, one finds that Californians would contribute only $1.3 billion to the plan, while taxpayers in other states would contribute $4.5 billion — or over three times as much. I haven’t seen so many people who couldn’t shoot straight since *[Commando](http://us.imdb.com/title/tt0088944/)*. Ooh, wait, I have another one! The Schwarzenegger health plan brings to mind the tagline from [*Commando*](http://us.imdb.com/title/tt0088944/): > *Somewhere… somehow… someone’s going to pay!* ([Hey, with a dry cool wit like that, I could be an action hero.](http://www.snpp.com/episodes/2F01.html)) ##### Related Tags [General](https://www.cato.org/general), [Health Care](https://www.cato.org/health-care), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).