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New Analysis of Medicaid Fraud, Waste Shows Huge Cost Savings Don't Mean Lost Coverage for the Needy

Mark Tapscott : May 28, 2025  The Washington Stand

Following the Obama-era changes, ...Joe Biden's administration created a broad loophole through which millions of illegal immigrants have become Medicaid recipients despite a federal law that denies eligibility to such individuals.

[WashingtonStand.com] Restoring strict eligibility verification requirements gutted by the Obama and Biden administrations could save hundreds of billions of tax dollars without cutting needed health care for the truly needy, according to a new data-driven analysis of the federal program's recent regulatory history. (Image: iStock-zimmytws)

The analysis comes at a crucial point on Capitol Hill with the Senate about to debate President Donald Trump's One Big, Beautiful Bill Act (H.R. 1) that the House of Representatives approved May 22 on a 215-214 vote. Democrats claim the bill requires slashing Medicaid spending by more than $800 billion and that millions of recipients will lose their benefits as a result.

But the new analysis also provides substantial evidence to support Speaker of the House Mike Johnson's (R-LA) insistence that eliminating waste and fraud in the program and restoring genuine work requirements will not mean reductions in care for anybody who is genuinely eligible for Medicaid.

"In 2013—the year prior to ObamaCare expansion—there were roughly 60 million Medicaid enrollees nationwide. But by 2023, total enrollment had soared to a record-high 100 million. While enrollment has declined somewhat due to the unwinding of pandemic-related restrictions on removing ineligible enrollees, there are still 10 million more Medicaid enrollees today than there were before the pandemic," according to the analysis published by the Foundation for Government Accountability (FGA). The FGA is a Florida-based conservative think tank.

"Explosive enrollment has led to skyrocketing spending. All told, federal and state taxpayers footed the bill for nearly $919 billion in Medicaid costs in 2023 alone—roughly double the cost from a decade earlier. Federal taxpayers have borne the brunt of this skyrocketing spending, with federal dollars covering nearly 80 percent of the increase over the last 10 years," the analysis said.

Thanks to the enrollment explosion and the loosening of verification requirements, the FGA analysis estimates that more than 20% of all Medicaid spending is improper, going to ineligible, duplicative, non-existent, or fraudulent individuals.

"More than 80 percent of these improper payments are caused by eligibility errors, meaning individuals enter the program despite being ineligible or remain on the program long after becoming ineligible. Even worse, the Medicaid program is now on track to surpass $2 trillion in improper payments over the next decade alone," the FGA analysis explained.

The key year was 2012 when Medicaid problems began to intensify at a rapid pace after federal regulators at the Department of Health and Human Services' Centers for Medicare and Medicaid Services (CMS) revised long-standing regulations covering non-disabled and non-elderly individuals to encourage state governments, which administer Medicaid, to redetermine eligibility of recipients "at least every 12 months." States were also allowed to reverify at "shorter intervals at [their] discretion."

The revision effectively reversed the regulations from requiring reverification at least once a year to no more than annually. Also modified were requirements for verification of information provided by a Medicaid applicant concerning income, family structure, and other factors.

The FGA analysis described the results of those regulatory revisions, saying "a Louisiana audit, for example, found tens of thousands of ineligible individuals were allowed to enroll in the program because the state did not verify self-attested information on household size, composition, or certain types of income," and in New Jersey, state "auditors identified thousands of enrollees with unreported six-figure incomes, including some earning as much as $4.2 million per year."

Following the Obama-era changes, ...Joe Biden's administration created a broad loophole through which millions of illegal immigrants have become Medicaid recipients despite a federal law that denies eligibility to such individuals.

The loophole was based on the requirement that a new Medicaid entrant have a grace period of at least 90 days during which officials would verify immigration status. But such verification is often impossible in such a short time, with examples of more than 5,000 days, according to the FGA analysis, which estimated illegal immigrant coverage "skyrocketed by more than 500 percent" as a result.

The Biden revisions also prohibited states from closing eligibility cases too quickly and tripled the time ineligible recipients were given to report changes in their circumstances that could change their benefit status. The FGA report cited a Congressional Budget Office (CBO) estimate that such revisions will cost $224 billion over the next decade.

A related development on the Medicaid issue offers solid evidence that Johnson and Capitol Hill Republicans are on firm ground with big majorities of voters in congressional districts that would normally be viewed as threats to GOP control.

That evidence was first reported by Punchbowl News, which obtained a copy of a survey conducted earlier this month by the polling firm Fabrizio, Lee and Associates (FLA), that included more than 1,200 voters in 72 such districts. The firm has provided campaign survey work for dozens of GOP Members of Congress, as well as for Trump's 2016 and 2024 presidential campaigns.

Among the results, the FLA survey found:

  • 72% favor "requiring able-bodied, working-age adults who receive Medicaid to at least look for work or participate in community service part-time in order to keep their Medicaid benefits, which would save American taxpayers hundreds of billions of dollars over the next 10 years."
  • 68% favor "strengthening Medicaid eligibility integrity, which would require states to better screen enrollees and to immediately end coverage of people who are ineligible, saving the American taxpayers over 100 billion dollars over the next 10 years."

Such polling data may be why Johnson appeared unfazed when asked May 25 by CBS News's Margaret Brennan on "Face the Nation" how he would explain his support of reforms that one study estimated would cost nearly 200,000 residents of Louisiana Medicaid coverage.

"This is not some onerous thing; this is common sense, and when the American people understand what we are doing here, they applaud it," Johnson told Brennan, adding that the House-adopted reforms will strengthen Medicaid "so that [it] will be there for the people that desperately need it the most, and it's not being taken advantage of. This is something that everybody in Congress, Democrats and Republicans, should agree to." Subscribe for free to Breaking Christian News here

Mark Tapscott is senior congressional analyst at The Washington Stand.







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