Reason columnist and Mercatus Center economist Veronique de Rugy and her colleague Jason Fichtner have produced the chart above. The total comes in over $100 billion made in terms of waste, fraud, and abuse of various programs. Even worse:
The three largest programs in terms of improper spending amounts are all health-care related. Medicare Fee-for-Service, Medicare Advantage (Part C), and Medicaid top the chart with a combined $61.9 billion in improper payments. As economist Timothy Taylor points out, these high improper funding amounts are of particular concern in light of the federal government’s expanded intervention in health-care markets, as improper payments may likely plague new federal health programs as well.
While people of good conscience on both sides of the political aisle can debate the merits of whether or not government should be involved in certain activities, none should tolerate the high levels of improper payments currently associated with government spending on social welfare programs. Federal spending has grown too massive to be adequately overseen. Waste, fraud, and abuse squanders public resources and undermines trust in government.
Keep that in mind the next time somebody tells you that Medicare spends a fraction on administrative costs than private insurers do. One of the main reasons is that nobody in the system has any incentive to crack down on fraudulent or mistaken payments. Very few companies could stay in business kicking out tens of billions of dollars or more in wrong payments.
Last year, Reason TV looked at a new program designed to crack down on overpayments at Medicare and Medicaid - and why the program was doomed to failure. Watch that now: