CMS Data and State Audits Expose Fraud Risks in Medicaid and Obamacare Exchanges

Recent federal and state reports highlight significant concerns regarding fraud and inefficiency within government-funded healthcare programs, particularly Medicaid and the Obamacare insurance exchanges. Data from the Centers for Medicare and Medicaid Services (CMS) reveal an increasing trend of enrollees in zero-claims Bronze and heavily subsidized Silver plans, rising from 23-29% in 2019 to 40% in 2023. This suggests a substantial number of individuals may be auto-enrolled or re-enrolled in taxpayer-subsidized plans without utilizing the coverage, raising questions about the management of public funds and insurer risk adjustment mechanisms.

The data also indicate higher rates of zero-claims enrollees in states such as Florida and Texas, where income misreporting to qualify for free coverage has been noted. This discrepancy underscores ongoing integrity issues within Obamacare exchanges that have likely benefited insurers who receive premiums without corresponding claims payouts. Concurrently, a Louisiana legislative auditor report found that Medicaid payments totaling $9.6 million were made for over 1,000 beneficiaries posthumously, with insurers receiving payments for nearly 14 months after death on average, indicating systemic gaps in death data matching and beneficiary status verification.

Efforts to improve program integrity are underway. The enhanced subsidies enabling zero-dollar benchmark coverage are set to expire at the end of 2024, which is expected to reduce incentives for fraud. Additionally, legislative provisions in the recently passed reconciliation bill require stricter verification measures to ensure assistance reaches only eligible individuals. Starting in 2027, states must conduct quarterly checks against the Social Security Death Master File to prevent Medicaid payments to deceased individuals, although past estimates predict limited nationwide savings from this measure.

These developments reflect an increased regulatory focus on reducing improper payments and fraud within federal and state healthcare programs. Continued enforcement and improved data cross-referencing between agencies and insurers are critical for safeguarding taxpayer funds. As policies evolve, state and federal entities are taking incremental steps toward enhancing program accountability and reducing financial waste in public healthcare expenditures.