Feds Waste $100 Billion Per Year in Improper Payments! Will Grow with Obamacare, Medicaid Expansion!

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.

Read more here.

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:

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  • Doctor Whom||

    There is nothing left to cut. Also, government is inherently more efficient than the private sector because government isn't worried about those tithes to Satan known as profits.

  • Rich||

    nobody in the system has any incentive to crack down on fraudulent or mistaken payments.

    With all due respect, isn't *the taxpayer* somebody "in the system"?

    "Incentive", or "balls"?

  • UnCivilServant||

    No, the Taxpayer isn't in the system, it's simply a source of funds to be harvested. The taxpayers have no influence with the current size of things.

  • Homple||

    So if they never catch the fraudsters, how do they know how much fraud there is? Seriously, how are these gigantic numbers determined? Who does the determining?

    By the way, is it "fraud" or "mis-coding"? Can any medicos or investigators fill us in on some details?

  • Rich||

    It's fraud all the way down!

  • Homple||

    They know that 100 $billion or so is gone but they can't figure out where more than a few percent of it went?

  • Rich||

    It's an ongoing investigation, so they can't comment.

  • Homple||

    They've been investigating since the Carter administration.

  • Scarecrow Repair||

    Hell, the Continental Congress was investigating George Washington!

  • PapayaSF||

    Note that health insurance industry profits total about $13 billion a year.

  • Stilgar||

    I'm impressed! Less than $1B per year in DoD "mispayments"?

  • shamrock||

    So, private insurance companies lose 0% to fraud? You need to compare the government insurance programs losses to fraud to private insurance losses.

  • ||

    You need to compare the government insurance programs losses to fraud to private insurance losses.

    Why exactly am I concerned about private insurance fraud as a taxpayer? And the Patient Protection and Affordable Care Act completed fucked over insurance companies' ability to seek out fraud with medical loss ratios.

  • wayne@herberts.org||

    So... who is actually to blame? The government or the thieves that actually steal the money? I put it on the thieves.

    Therefore, the next question is: How much should be spent on catching/preventing thieves? Clearly, anything up to the amount of theft curtailment is justified... but beyond? We just need to face the fact that thieves exist and chalk it up to the costs of doing business or government programs.

  • Seamus_Cameron||

    Using your logic we shouldn't pursue murders if the cost/benefit isn't high enough.

    We need to crush the fraudsters.

  • Response||

    I blame human nature.


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