The Government Accountability Office (GAO) has just reported that “improper payments” (that is fraud and abuse) are up to $124. 7 billion in 2014 from $105.8 billion in 2013. Most of this is Medicare and Medicaid:
The almost $19 billion increase was primarily due to the Medicare, Medicaid, and Earned Income Tax Credit programs, which account for over 75 percent of the government-wide improper payment estimate. Federal spending in Medicare and Medicaid is expected to significantly increase, so it is critical that actions are taken to reduce improper payments in these programs.
I have previously suggested that a solution to Medicare and Medicaid overpayments is to give patients more control of the dollars spent on their behalf, and share savings with them.
With respect to the Earned Income Tax Credit, those improper payments are often used as evidence that a more general tax credit to finance individuals’ health spending would be similarly problematic. That is likely true for Obamacare tax credits, which are a very confusing calculation. However, a universal, refundable tax credit would be easier to govern.