The federal government keeps claiming there is massive fraud in its medical aid programs, but has been less than forthcoming about where it is and what's being done about it. Moreover, officials argue that if fraud were stopped, the federal deficit would disappear.
Instead, an outwardly partisan anti-fraud campaign has featured Vice President JD Vance in the starring role of tagging Democratic states as uncaring or incompetent about finding fraud. It all seems especially galling when the examples that Vance promotes generally are the result of already-run state investigations or the prospect of fraud possibility, inevitably involving programs by or for immigrants already barred by law from receiving benefits.
What's missing is an actual, evidenced accounting of what is supposed to be wrong rather than jumbled, unevidenced assertions that billions of public dollars are being wasted. Much like the fabled but discredited findings by Elon Musk's DOGE efforts a year ago, there is a lot of talk about fraud without the evidence to back up Vance's oft-repeated claims.
Indeed, news accounts of Vance presentations feature him or Dr. Mehmet Oz, head of the agency overseeing Medicare and Medicaid, discussing the possibilities of finding fraud without showing new cases.
As TalkingPointsMemo.com notes, Donald Trump used his State of the Union address to offer "an absurd, fantastical and quickly debunked claim: Once Vice President JD Vance had a chance to root out fraud from (blue states') social services programs, the federal budget would be balanced and the deficit would disappear."
Nope. Despite the hype, there is still a huge, quickly increasing federal debt and no list of fraudsters.
The White House has decided that Minnesota, California, and now Maine are either purposely (for political reasons) or incompetently ignoring Medicaid eligibility or fraudulent reporting of child-care reimbursement programs. Apparently, fraud that continued under the first Trump administration should not count.
The campaign started in earnest after Trump decided to attack Minnesota Gov. Tim Walz and other state officials there who oppose Trump's deportation efforts over reports—some true, some not—that there had been fraudulent child-care schemes in that state. Trump made it all political by connecting those schemes—which had been prosecuted after state investigations—to efforts by Walz to shield Somali immigrants involved to gain their electoral support.
Quickly after naming Vance to head a White House effort to investigate fraud, the government has singled out blue states as bad actors in the filings of government reimbursements.
Last week, Vance hosted Republican attorneys general—Vance did not invite Democrats until the last minute, so they boycotted the session—and made clear that he will use this anti-fraud commission as another weapon in the retribution campaign Trump is waging against blue states by withholding federal funds as a form of punishment for various, nebulous offenses.
Vance said states should target Medicaid's social services spending and said the Health and Human Services Department would be reviewing how states use their Medicaid Fraud Control Units—ironically the very people who most often prosecute cases of Medicaid provider fraud. Indeed, states note that widespread cuts to Health and Human Services have made fraud investigation much more difficult.
While there is agreement that some fraud exists in federal spending, there is no evidence that it is as rampant as Team Trump claims nor only in blue states. To even keep deficit spending unchanging, for example, the amount of fraud would have to be triple what the Government Accounting Office estimates.
These public fraud charges are largely about suppliers who charge the government for a childcare facility that is not staffed, as an example from Minnesota. Medicare/Medicaid itself says the largest source of "fraud" is in overhyped medical prescriptions that result from the labyrinth for doctors to have to check the right boxes for reimbursement.
Just this week, ProPublica published an analysis showing upwards of $100 million a year spent for medically questionable vascular procedures for mildly affected patients.
But this campaign from Vance wants to pin blame on lack of Democratic state oversight for spending illegally on or for undocumented migrants or on allowing classes of ineligible aid recipients.
The GAO released a study in 2024, during the Joe Biden years, that estimated government-wide fraud was between $233 billion to $521 billion between 2018 and 2022 (including COVID years). The GAO collected data from prosecuted cases, from inspector general reports and confirmed fraud reported to the Office of Management and Budget (OMB) by agencies. It used 46 fraud studies to build its model and to conclude that annual fraud losses amounted to between 3 percent and 7 percent of government spending. That is what the Centers for Medicare and Medicaid report as well.
Vance keeps telling reporters that in "just two months" the anti-fraud task force he has led for the Trump administration has "exposed billions of dollars in benefits that have been stolen from the American people." Vance claims the task force has deferred funds from fraudsters seeking small business loans and Medicaid reimbursements and recovered funds "stolen" from COVID relief programs.
Much of what Vance reports either already has been prosecuted or stopped or is believed to be the possible source of fraud. It is not new investigative gold. Vance placed a six-month hold on new hospice and home healthcare enrollments and shutdown of 780 hospice centers and asserted that he stopped $1.3 billion in fraud. How is that evidence? The task force referred $22 billion in small business loans for review, another $6 billion in government contracts, and $60 million in student aid payments. Calling them fraud doesn't make them fraud, a crime. Vance asserts that California and Minnesota are ignoring increases in fraud that he estimated in the billions without listing the who, what and how.
For the moment, assume all of it is true. For comparison, the federal cumulative deficit is estimated to be around $24 trillion, with growing costs of social services programs, interest, and, of course, tax cuts. GAO's estimates of fraud are nowhere near enough to balance that deficit.
