How bad is waste in the health insurance dominated American healthcare system?
In an opinion piece for The Hill, writer and researcher Jonathan Bain asks why taxpayers continue to fund health insurance for individuals who have passed away.
Yes, dead people receive federal funding.
Bain highlights what he calls a “ridiculous reality” where 450,000 Medicaid payments, totaling nearly $250 million in taxpayer money, have been issued on behalf of enrollees who are no longer alive.
To be clear, these are described as ongoing, post-death payments made from state Medicaid programs directly to managed-care organizations, not delayed reimbursements for services previously rendered.
The author argues this $250 million in ongoing payments as a slice of a much larger issue of fraud, waste, and abuse that plagues taxpayer-funded government programs.
This kind of unchecked waste was particularly visible during the COVID pandemic, where roughly $400 billion was lost to waste and fraud in federal welfare programs.
In a separate article for the Foundation for Government Accountability, titled ’The Welfare Walking Dead’, Bain outlines how this waste was created.
The report highlights that the integrity challenges have worsened as Medicaid enrollment has dramatically expanded, largely driven by the ObamaCare expansion to able-bodied adults.
Total Medicaid enrollment skyrocketed from 35 million people in 2000 to 100 million by 2023. This growth has made Medicaid the largest line item in most state budgets, now consuming 30 percent of state budgets nationwide. Currently, more than one out of every five dollars flowing through Medicaid is considered improper, resulting in tens of billions of dollars lost annually.
The central cause of the “ghost payments” is the failure of states to remove deceased individuals promptly from the Medicaid rolls. According to the Office of the Inspector General (OIG), most states audited did not routinely identify and process enrollees’ death information or enter it into their Medicaid Management Information System, even though the data was readily available.
Some audited states had inadequate procedures, and others did not collaborate at all with entities that provide death information. This inaction allows managed care organizations to continue collecting taxpayer dollars to which they are not entitled.
Bain argues that the solution is simple and can be implemented immediately: mandatory monthly cross-checks of the Social Security’s death master file alongside state vital statistics data.
Although Republicans and President Trump recently mandated quarterly checks to determine if Medicaid enrollees are deceased, this reform is not slated for implementation until 2028.
Bain urges states not to wait, asserting they have the ability to access federal and state death records and should start monthly checks now to “salvage budgets and root out fraud.” States can also restore program integrity by eliminating automatic renewals and prohibiting pre-populated enrollment forms.
Beyond monthly cross-checks, states can eliminate automatic renewals and prohibit the use of pre-populated enrollment forms as common sense steps to reduce waste, fraud, and abuse.