Simply verifying recipients’ identification could save $1 trillion in entitlement spending per year, LexisNexis Special Services CEO Haywood Talcove told a congressional committee.
“Between federal, state, and local government, you can save one trillion dollars a year by simply putting in front-end identity verification, eliminating self-certification, and monitoring the back-end of the programs that are providing the benefits,” Talcove said before the Delivering on Government Efficiency (DOGE) Subcommittee of the House Committee on Oversight and Government Reform,
Talcove stated, “Since 2003, federal agencies have reported approximately $2.7 trillion in cumulative improper payments, a staggering figure that underscores the persistent vulnerabilities across government programs.”
U.S. welfare programs, in particular, are fraught with “fraud, mismanagement, and outdated verification systems,” stated Talcove. “In fiscal year 2023 alone, improper payments totaled $236 billion, spanning over 71 federal programs.”
‘Giant Piñatas for Thieves’
“There is no reason to believe Mr. Talcove is incorrect,” said Linda Gorman, director of the Health Care Policy Center at the Independence Institute. “For decades, it has been widely acknowledged that federal programs are giant piñatas for thieves of all sorts. The GAO and various Inspectors General issue reports detailing rampant fraud in entitlement programs.”
Fraud is a consequence of bureaucracy and politics, says Gorman.
“The people running the federal government have measured program success by budget growth, not by whether the funding was properly targeted,” said Gorman. “The politicians supposedly overseeing programs run on how much money they have given to how many people.”
Inaccurate Income Determination
Income as a determinant of eligibility for welfare programs needs to change, says Gorman.
“Income is a fluid concept and should not be used for large-scale program enrollment,” said Gorman. “Evidence from Medicaid suggests that a lot of people misstate their income and become eligible because government does not check like the private sector does,” said Gorman.
Using federal poverty levels comes with additional problems, says Gorman. “For example, federal poverty levels include only reported money income. They ignore the value of any in-kind state and federal benefits a household may be receiving.”
Enrollees can misstate their income and get away with it, says Gorman.
“Evidence from Medicaid suggests that a lot of people misstate their income and become eligible because government does not check like the private sector does,” said Gorman.
Multiple Dippers
The government also fails to check whether someone has enrolled multiple times, says Gorman.
A 2024 Massachusetts audit found the state made “more than $3.8 million in improper capitated payments to managed care organizations on behalf of members with more than one ID,” said Gorman.
In the state of Washington, double enrolling led to $300 million in waste, an audit reported in October 2024. An audit in Colorado found the state paid $7 million to known dead people from 2018 to 2020.
Gorman cited work by Brian Blase of the Paragon Health Institute estimating that from “2015 to 2024 Medicaid alone paid about $1.1 trillion for the care of individuals who were probably not eligible. This is double the rate reported by CMS” (see related article, page 5).
“Estimates of total fraudulent payments are mindboggling,” said Gorman. “Agencies face zero consequences for not addressing fraud and have no incentive to try to retrieve their funds.”
Obsolete Processes
Congress has failed to require government bureaucrats to spend taxpayer money only on its stated purposes, says Gorman.
“The private sector has embraced computers in management and used software to replace hordes of middle managers and clerks who tracked sales, inventories, and costs,” said Gorman. “It is long past time for the federal government to do the same.”
Evidence of the need for better oversight is piling up, says Christopher Talgo, editorial director and a research fellow at The Heartland Institute, which co-publishes Health Care News.
“ID verification is more than necessary to prevent at least some of the rampant waste, fraud, and abuse that has become so entrenched in the Big Three entitlement programs over the past several decades,” Talgo said, referring to Medicaid, Medicare, and Social Security.
“For instance, we know that illegal immigrants are getting Medicaid even though they are not eligible for the program,” said Talgo.
System Failure
Talgo is the coauthor of a September 2024 report for The Heartland Institute calling for further verification of Medicaid eligibility in addition to other measures for cutting fraud and waste.
“As Talcove’s report shows, Social Security, Medicaid, and Medicare are rife with improper payments,” said Talgo. “From outright fraud to people receiving checks who are no longer living, these programs must be properly vetted to ensure that taxpayer dollars are not being wasted.”
Cheating Incentives
The Centers for Medicare and Medicaid Services (CMS) has failed to provide proper oversight of states’ claims about enrollees, says Gorman.
“Given the size of the federal match for the expansion population and the fact that states get matching funds for the taxes they levy on health care, they have little incentive to make sure that only people who are eligible are enrolled,” said Gorman.
Fraud and abuse are rampant in entitlement programs, says Talgo.
“To really reform our out-of-control entitlement spending, we must reform these programs to ensure they are serving only the most vulnerable people,” said Talgo. “These programs are on the brink of insolvency because they have been thoroughly abused by fraudsters and con artists.
“Reinserting commonsense policies like work requirements and asset verification would make a huge dent in the blatant waste, fraud, and abuse that has put these programs in jeopardy,” said Talgo.
Harry Painter ([email protected]) writes from Oklahoma.
Internet info:
S. T. Karnick, Matt Dean, Christopher Talgo, “American Health Care Plan: State Solutions,” The Heartland Institute, September 3, 2024: https://heartland.org/opinion/new-heartland-institute-report-the-2024-american-health-care-plan-state-solutions/
Harry Painter ([email protected]) writes from Brooklyn, New York.
