Improper Medicaid Payments Have Soared since Obamacare

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Americans are conditioned to expect inefficiency and waste in government programs. We make jokes about long lines at the DMV and the Bridge to Nowhere as if slow-moving bureaucracy and fiscal profligacy are features of the system. But a recent report from the Centers for Medicare and Medicaid Services (CMS) puts government mismanagement on a different plane and should alarm all Americans. The report reveals astronomical improper spending in Medicaid, our nation’s third-largest government program.

The true Medicaid improper-payment rate now exceeds 25 percent, meaning that more than one in every four dollars spent in the Medicaid program — or more than $100 billion in federal spending each year — is in violation of program rules. It turns out that millions of Medicaid enrollees are ineligible for the program — in most cases because they earn too much income, but in others because they are not lawful residents. The media, to date, have virtually ignored the issue; but taxpayers are being fleeced, and we can’t fix the problem until people know and understand what’s happening.

The CMS report finds that much of this is due to states not properly verifying that recipients are eligible for Medicaid. In many instances, they ignore federal requirements and do not check applicants’ incomes, nor do they conduct regular reviews to ensure that those on the program continue to meet eligibility rules. People qualify for Medicaid largely on the basis of income, and so failing to verify a Medicaid applicant’s income is like failing to check a Medicare applicant’s age. Past audits confirm that eligibility errors account for more than six in ten improper payments.