Democrats’ ‘Medicare for All’ Plans Would Explode Program Plagued by Waste, Corruption, Inefficiency

Former Democratic presidential candidate Sen. Elizabeth Warren (D-Mass.) in North Las Vegas, Nev., on Feb. 20, 2020. (David Becker/Getty Images)

WASHINGTON—When Sen. Elizabeth Warren (D-Mass.) promised to “bring in 135 million people into Medicare for All at no cost to them” within 100 days of being inaugurated as president, she was just one of her party’s multiple White House aspirants touting dramatic expansion plans for America’s 55-year-old federal health care program.

Warren’s proposal, like that of her campaign rival Sen. Bernie Sanders (I-Vt.), would require a total reorganization of America’s $3.6 trillion health care system. It would guarantee comprehensive, government-funded and -managed health care, while eliminating private health insurance programs.

Other Democrats, such as former Vice President Joe Biden, would allow private insurers to continue in business, but would set up a single-payer “public option” as an alternative.

Medicare cost taxpayers more than $583 billion in 2019, while Medicaid (including the Children’s Health Insurance Program) added another $399 billion. All of the Democratic presidential candidates’ plans would require additional spending, with some estimates as high as $38 trillion.

Americans have debated the merits and demerits of Medicare and its Medicaid subsidiary since 1965, but one thing has been clear for decades: Waste, fraud, and inefficiency are hallmarks of government-run medical care.

An Epoch Times review of reports by the Office of Inspector General (IG) for the Department of Health and Human Services (HHS) for the period Feb. 20–March 2 found the following headlines:

• Two Connecticut Physicians Pay Over $4.9 Million to Settle False Claims Acts Allegations.
• Sanofi Agrees to Pay $11.85 Million to Resolve Allegations it Paid Medicare Kickbacks Through a Co-Pay Assistance Foundation
• Physician Charged for Alleged Role in $120 Million Health Care Fraud and Money Laundering Conspiracy
• Five Defendants Sentenced in South Florida to Prison Terms for Their Roles in Tricare and Medicare Fraud Scheme
• New York Made Unallowable Payments Totaling More Than $10 Million for Managed Care

That those five examples are illustrative and not outliers is seen in the fact the problem became so pervasive that federal officials were forced in 2007 to create the Medicare Fraud Task Force (MFTF) to combat waste, fraud, and inefficiency in the program. The MFTF includes federal, state, and local law enforcement officials.

Since its inception, the MFTF has filed 2,829 indictments and generated nearly $3.5 billion in “investigative receivables,” that is, fines, repayments, and restitutions.

Three years after MFTF’s establishment, little progress was seen as CBS News’ “60 Minutes” reported that Medicare “provides a rich and steady income stream for criminals who are constantly finding new ways to steal a sizeable chunk of the half-trillion dollars that are paid out each year in Medicare benefits. In fact, Medicare fraud—estimated now to total about $60 billion a year—has become one of, if not the most, profitable crimes in America.”

And the Medicare crime wave goes on.

Robert Moffit, a senior fellow at the Heritage Foundation and member of the Maryland Health Care Commission, is a former deputy assistant secretary for legislation at HHS, where he wrestled with the major problems afflicting Medicare and Medicaid.

Asked March 4 by The Epoch Times about the endemic corruption in the program, he pointed to three factors:

“First, Medicare (and Medicaid to a lesser extent) is the largest payer in the American health care system. So it is a natural target of the criminal element.

“Second, the Medicare payment system, governed by thousands of pages of rules and regulations, is enormously complex and is thus equally difficult to comply with on the part of practitioners and to police on the part of Medicare officials.

“This byzantine system provides the perfect paperwork jungle cover for bad actors, and also ensnares honest practitioners in clerical errors and mistakes. Much of Medicare’s waste is not fraud, but improper Medicare payments to practitioners and medical institutions.

“Third, because the Medicare system is basically a claims-paying, or government check-writing operation, those writing the checks are not directly impacted financially from either improper payment or their failure to effectively police waste, fraud, or abuse.”

On the latter factor, Moffit added that “in that case, Medicare is exactly unlike a private health insurance company where there is a powerful economic incentive to police the system and to monitor claims, for administrative failure directly impacts the company’s bottom line.”

Overall, Moffit characterized Medicare’s corruption and inefficiency problems as “a failure of administration, and this failure of administration incurs an administrative cost, though government officials never categorize the tens of billions of dollars lost annually through waste, fraud, and abuse as an administrative cost, and it doesn’t show up on the Medicare books as an administrative cost. But it is.”

Medicare for All would magnify those costs, according to Grace-Marie Turner of the Galen Institute, who told Congress in 2019 that “the new single-payer system still would require many of the same administrative functions as any insurance system:

“Physicians, hospitals, labs, and other service providers would have to be approved and payment rates set. The government would need verification that approved services were actually provided, and there would need to be an even greater need for safeguards against fraud and abuse.”

Contact Mark Tapscott at [email protected]