The Spectacle Blog

Obamacare, Medicaid, and Fraud

By on 10.30.13 | 12:45PM

In questioning HHS Secretary Kathleen Sebelius, Rep. Cathy McMorris Rogers (R-WA) noted that in several states the vast majority of the newly "insured" are actually signing up for Medicaid, not going into private health care plans.

We'll write more about this effect later, and it's already getting a little attention.

But one story that will get very little press, even within the state of Illinois, is that the private contractor hired to examine eligibility for the state's Medicaid recipients, through a program called the Illinois Medicaid Redetermination Project, has found that more than half of Medicaid recipients reviewed to date are not eligible for Medicaid and that another 11 percent should have their benefits changed (which means reduced, or to be removed from Medicaid and re-enrolled in another less generous program.)

The state is responding to the results better than one might expect in a state utterly dominated by Democrats: 69 percent of those whom the contractor recommended be removed from Medicaid have in fact been removed, and 54 percent of those for whom a change was recommended have had their benefits changed.

As the Illinois Policy Institute notes, "Overall, the review has yielded an eligibility error rate of a whopping 63 percent."

Illinois had little choice. According to a press release from the governor's office last year:

llinois’ Medicaid program is on the brink of collapse. The program, which provides health care to 2.7 million Illinois residents in need, will end this current fiscal year (though June 30) with $1.9 billion in unpaid bills. Unless we take action to fundamentally restructure Medicaid this session, the Civic Federation estimates $21 billion in unpaid Medicaid bills by 2017.

Combine the temptation of "free" money from government (such as we're also seeing with federal disability insurance) with government-standard (which is to say far below what any private sector enterprise would accept) anti-fraud measures, and you can easily imagine that the rollout of Obamacare is really little more than a massively expensive, fraud-filled expansion of a government health insurance system which some studies show actually leads to worse health outcomes than having no insurance at all.

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