News & Politics

Obamacare Medicaid Expansion an Invitation to Fraud and Abuse

A report in The Daily Signal exposed Obamacare’s Medicaid expansion as an invitation to fraud and abuse as millions of possibly ineligible residents have enrolled.

Now Congress is interested in investigating the fraud as hundreds of millions of dollars may be handed out to millionaires, illegal aliens, and other undeserving enrollees.

“This is what happens. You open the door. You don’t do your verification. You don’t know who is coming into the program, and yes, you’re going to see a program like this balloon and get out of control quickly,” Blackburn said when asked if Congress should investigate the findings. “Is it an issue? Yes. It was an issue for TennCare, it will be an issue for Obamacare.”

Similarly, Darin Miller, spokesman for Rep. Jim Jordan, R-Ohio, told The Daily Signal the congressman would be “open to investigating the [Medicaid] expansions that allow this sort of thing to happen.”

“This is just another reason why Obamacare needs to be repealed,” he said.

On Tuesday, The Daily Signal reported that under the Affordable Care Act, Americans who have significant sums of money in assets—in some cases up to $5 million—but low monthly incomes can qualify for and enroll in Medicaid. Obamacare, as it was written and passed by Congress, did away with an asset test previously used in traditional Medicaid, and the new system allows asset-rich Americans to enroll in government-sponsored health insurance so long as their monthly incomes are low enough.

The trend is particularly prevalent in the 31 states and the District of Columbia that expanded Medicaid, as eligibility requirements were loosened to include individuals who make below 138 percent of the federal poverty line, or roughly $16,000 annually.

How bad is it? The state of Illinois hired an independent auditor in 2014 to examine its Medicaid rolls. What they found was astonishing:

In January, the Illinois Department of Healthcare and Family Services, or HFS, began a new project verifying eligibility for Illinois’ 2.7 million Medicaid enrollees. For years, state workers had failed to take adequate steps to ensure the people receiving Medicaid benefits were actually eligible for the program. As an Auditor General report noted, state workers failed to verify basic eligibility criteria, such as income, residency and citizenship status. Worse yet, some of the annual eligibility checks had been delayed for more than five years.

So state lawmakers pushed HFS to hire an independent vendor who specializes in this kind of work to review Medicaid eligibility. Since January, the independent vendor has reviewed nearly 419,000 case files of individuals currently enrolled in Medicaid. Of those, the vendor identified more than 210,000 that were ineligible for benefits, which amounts to more than 50 percent of all cases reviewed so far. Another 47,000 cases reviewed so far this year were eligible for some benefits, but enrolled in the wrong program. For example, some individuals enrolled in Medicaid may only qualify for programs with greater cost-sharing. Overall, the review has yielded an eligibility error rate of more than 61 percent.

And it’s not just ineligible enrollees who are wasting Medicaid money. The Government Accountability Office found that a whopping $14 billion had been improperly paid to so called “managed care organizations.”

Specifically, the wrong payments made were for treatments or services not covered, not necessary, or billed for but never provided, GAO found.

States that expand Medicaid programs under Obamacare will receive a 100 percent reimbursement from the federal government for MCOs for the next two years, the report said.

Given that state and federal governments have recovered “only a small portion” of the wrongly paid money, unless they ramp up their oversight of MCOs, even more Medicare dollars will be “vulnerable to improper payments,” GAO said.

For two years, the Obama administration has been touting its Medicaid expansion program as a huge success. But at what price? If the government is not going to properly vet potential enrollees or oversee payments to organizations, massive fraud, abuse, and incompetence will bury the already dysfunctional program.