Safeguarding the Safety Net: Solutions to Medicaid’s Program Integrity Crisis
Key Findings
- Medicaid enrollment and costs have soared in recent years, fueled primarily by able-bodied adults.
- As Medicaid has ballooned, so has the rampant waste, fraud, and abuse within the program.
- Many of the program integrity issues are fraud by design, as bureaucrats have crafted policies to maximize enrollment no matter the cost to taxpayers.
- Concurrent Medicaid enrollment across two or more states has become a significant source of waste, fraud, and abuse.
Overview
Across the country, the Medicaid program has been in severe turmoil for years. Originally designed as a safety net for the truly needy—such as the elderly, individuals with disabilities, and low-income children—the program has drifted away from its mission by prioritizing able-bodied adults.1
When the Affordable Care Act—more commonly known as ObamaCare—was signed into law, states were given the option to expand to an entirely new class of able-bodied adults.2 Sadly, many states fell for the trap of expansion due to misleading projections and faulty data.3 As a result, these states have suffered the consequences of soaring enrollment coupled with ballooning costs.4
As the Medicaid program has grown, so have the longstanding issues of waste, fraud, and abuse.5 This mayhem has left taxpayers holding the bag for tens of billions annually in improper payments, most of which are due to eligibility errors.6
Without change, the Medicaid program was on track to surpass $2 trillion in improper payments over the next decade alone.7 Thankfully—under the direction of President Trump—Congress has delivered desperately needed change through the One, Big, Beautiful Bill.8
Exploding costs fueled by expanded Medicaid rolls
In 2000, there were only 35 million Medicaid enrollees nationwide.9 However, by 2023 Medicaid enrollment had catapulted to 100 million, primarily driven by able-bodied adults made eligible through ObamaCare expansion.10 Able-bodied adults increased from roughly seven million in 2000 to a staggering 34 million in 2024—a massive increase of 393 percent.11
As enrollment has soared, so has spending. Total Medicaid spending has more than tripled since 2000, with spending reaching $919 billion in 2023 alone.12 Federal taxpayers have borne the brunt of this skyrocketing spending, covering nearly 80 percent of the increase over the last decade.13
In 2000, Medicaid accounted for around 20 percent of state budgets nationwide, but today that number has climbed to 30 percent.14 Meanwhile, other priorities—such as K-12 education, public safety, and transportation—have seen their share of the budget dwindle over time.15
Unsurprisingly, non-expansion states have fared better than their expansion counterparts during this Medicaid mayhem.16 In 2023 alone, expansion costs reached $139 billion, roughly three times higher than projected.17 All told, expansion spending has surpassed more than $1 trillion in less than a decade’s time—more than doubling the projections peddled by the so-called experts.18
Unfortunately, these enrollment and cost overruns did not occur in a vacuum. As the program has continued to consume more of limited state budgets, taxpayers have also been footing the bill for incredible amounts of waste, fraud, and abuse.
The Medicaid program has been undermined by waste, fraud, and abuse
As Medicaid has grown, the longstanding integrity issues within the program have become even more difficult to ignore. Originally designed as a safety net for the truly needy, Medicaid has quickly ballooned into one of the largest and most expensive welfare programs in the country. This growth has been accompanied by an alarming rise in waste, fraud, and abuse.
Today, more than one out of every five dollars flowing through the Medicaid program is improper—resulting in billions of improper payments each year.19 Improper payments have cost taxpayers an estimated $1.1 trillion over the last decade.20 Even more troubling, more than 80 percent of these improper payments are the result of eligibility errors.21 In many cases, individuals are enrolled despite not meeting eligibility requirements or remain on the program long after they are no longer eligible.22 This is not just a small system glitch, rather it is an intentional structural problem that undermines the integrity of the entire program.
For decades, states were required to perform redeterminations on the eligibility of Medicaid enrollees at least once per year.23 This was the minimum for states, as they had the option to perform redeterminations more frequently. However, the Obama administration finalized a rule to prohibit states from performing more frequent redeterminations on their non-disabled and non-elderly Medicaid populations, turning the previous floor into the new ceiling.24 In 2024, the Biden administration finalized a rule to prohibit states from conducting more frequent eligibility checks, while also forcing states to have lengthy “reconsideration” windows that keep ineligible individuals enrolled for longer periods of time.25
Eligibility errors have historically been the culprit behind most improper payments in Medicaid. However, the Obama administration suspended reviews of eligibility errors in 2014 before states began enrolling millions of able-bodied adults through ObamaCare expansion.26 Although the Trump administration later relaunched these eligibility reviews, they were once again suspended by the Biden administration.27
In 2024, the Biden administration lauded that it had improved the integrity of government programs by lowering Medicaid’s improper payment rate by more than 75 percent since 2021.28 However, this decline was not the result of improving program integrity. According to the Government Accountability Office, this decline could be explained by pointing to “flexibilities granted to states during the COVID-19 public health emergency.”29 In short, federal rules prohibited states from removing ineligible enrollees from the Medicaid program during this time, so “payments that would have previously been determined to be improper would not be improper under the relaxed requirements.”30
Waste, fraud, and abuse have run rampant in the Medicaid program for years and continued to do so under the Biden administration. Multi-state Medicaid enrollment has become a driver of improper payments, as individuals collect benefits in more than one state at the same time.
Millions of Medicaid enrollees were collecting benefits in multiple states at the same time
In 2025, the Centers for Medicare & Medicaid Services found that millions of individuals were improperly enrolled in Medicaid—either by being enrolled in multiple states simultaneously or being enrolled in Medicaid while also receiving a subsidized private plan through the ObamaCare exchange.31
This duplicative enrollment highlights the massive program integrity issues occurring under the Biden administration, costing taxpayers roughly $14 billion annually.32 In 2024, an average of around 1.2 million Medicaid enrollees each month were enrolled in two or more states, while about 1.6 million each month were enrolled in both Medicaid and a subsidized exchange plan.33
These results are far from surprising. Auditors discovered that tens of thousands of Medicaid enrollees were enrolled more than once within the same state—with some enrollees having as many as seven open Medicaid cases at a time.34 Auditors also found hundreds of thousands of duplicative enrollees across multiple states.35 A federal review of 47 state Medicaid programs found that every reviewed state had enrollees who were also enrolled in another state’s Medicaid program simultaneously.36
Thankfully, Congress passed and President Trump signed the One, Big, Beautiful Bill, which restored common sense to the Medicaid program.37
How states can curb multi-state Medicaid enrollment
The One, Big, Beautiful Bill establishes new requirements for states to crack down on multi-state Medicaid enrollment.38 States must now establish a process to collect address change information from returned mail by the U.S. Postal Service, the National Change of Address database, managed care companies, and other reliable sources.39 States must also submit their enrollment information to the Centers for Medicare & Medicaid Services every month in order to identify and remove individuals enrolled in multiple states.40
To meet these requirements, states should work to improve data coordination across agencies. Officials collect an enormous amount of data through tax filings, death records, incarceration records, and more. However, this information is all too often siloed away and never checked against state Medicaid enrollment. By requiring regular cross-checks between welfare programs and all available state and federal databases, lawmakers can ensure that ineligible enrollees are identified and removed, leading to taxpayer savings.41
In addition, states should eliminate the practice of using pre-populated Medicaid enrollment forms and automatic Medicaid renewals. Under the guise of seeking to reduce administrative overload, states have allowed ineligible enrollees to remain on the program for the sake of convenience. By requiring active renewals and up-to-date eligibility documentation, states can ensure that Medicaid is preserved for the truly needy.
Lawmakers should also prioritize strengthening reporting requirements for Medicaid enrollees. Many welfare programs already require enrollees to report major changes in circumstances that could impact eligibility.42 Extending these reporting requirements to Medicaid enrollees is another way states can identify and remove ineligible enrollees within the program.
These are simple steps that states can take to greatly improve program integrity within Medicaid. Designed to be a safety net for the truly needy, lawmakers must address the longstanding issues of waste, fraud, and abuse within the program by enacting reforms that seek to preserve resources for those that need them most.
The Bottom Line: Lawmakers must end multi-state Medicaid enrollment to preserve resources for the truly needy.
Medicaid’s original goal of providing a safety net for the truly needy has been undermined by unchecked growth, skyrocketing costs, and rampant waste, fraud, and abuse. President Trump and Congress sought to address these longstanding issues with the One, Big, Beautiful Bill, and states should act now to implement program integrity reforms. By doing so, states can prevent further waste, strengthen program integrity, and ensure resources are preserved for the truly needy.
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