In 2019, the United States federal government spent $1.1 trillion, or approximately 25% of the overall federal budget, on just four government health care programs; Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and the Affordable Care Act (ACA). In addition to these well-known programs, the Department of Defense spends tens of billions of dollars every year providing health care to service members, veterans and their families through programs like TRICARE. Likewise, all states administer their own Medicaid programs and typically match the funding provided by the federal government, pumping even more public money into this sector.
Unfortunately, not all of these expenditures go toward the intended recipients, and some individuals prey on this largesse. While academics and commentators debate the exact proportion of improperly diverted government expenditures, the fact that such diversion exists is noncontroversial. For its part, the Centers for Medicare and Medicaid Services (CMS) estimated that around 7% of Medicare spending in 2019 was improperly reimbursed. See “2020 Estimated Improper Payment Rates for Centers for Medicare & Medicaid Services (CMS) Programs” (Nov. 16, 2020). The problem is even worse for Medicaid and CHIP, with CMS estimating that around 15% of this spending was improperly reimbursed in 2019.