JOHNSON: ‘The Medicaid program doles out $37 billion a year of improper payments, a 157 percent increase since 2013…’
(Kaylee McGhee, Liberty Headlines) A new Senate report reveals that health care consumes 17 percent of the nation’s gross domestic product, costing taxpayers more than $554 billion.
The investigation, led by Sen. Ron Johnson, Chairman of the Senate Homeland Security and Governmental Affairs, found that fraud runs rampant in Medicare and Medicaid — both government-controlled programs.
Overpayments are a major contributing factor to this fraud and are an ongoing problem.
The report stated it found that Medicaid overpayments to health care providers totaled nearly $37 billion, allowing pharmaceutical companies to make profits from taxpayer dollars.
Johnson said that, as it exists, the U.S.’s healthcare services are unsustainable.
“Central to this unsustainable growth is Medicaid,” Johnson said during a Senate hearing on Wednesday. “The Medicaid program doles out $37 billion a year of improper payments, a 157 percent increase since 2013. Medicaid accounted for 26 percent of all the improper payments made by the federal government in fiscal year 2017.”
The report also reveals Medicaid dishes out payments to hundreds of thousands of users who aren’t eligible.
Many “dead” people still get benefits, and there are more than 20,000 fraud investigations due to providers reporting “spectacular profits.”
One such insurer’s margins increased 578 percent after Medicaid’s expansion in California, jumping from $71 million to $484 million.
The cost of Medicaid for users has also skyrocketed over the past few years.
It initially cost each user $222, and it is now set at $7,973, a $3,491 increase.
Obamacare is partly responsible for these surging costs, said the report.
“The Affordable Care Act worsened the problem of Medicaid fraud and overpayments by giving states incentives to declare people newly eligible to receive 100 percent federal reimbursement during the Medicaid expansion’s first three years,” the report states.
Sen. Claire McCaskill said during the hearing that taxpayers are completely oblivious to the rising costs because “no one knows how much these things cost.”
“Transparency with costs would help a great deal,” she said. “We can’t be good shoppers if we don’t know what it costs. And that’s all hidden behind a curtain. Anyone saying we have a free market when it comes to healthcare is deluding themselves. It is not a free market. The system is rigged with a bogus patent system and a barrier entry for generics. It’s ridiculous that we are handcuffing Americans with higher costs because we’re too busy protecting the profits of pharmaceutical companies.”
McCaskill said she does not think relieving the government of its healthcare burden is the answer, though.
Rather, the government should change the market’s incentives to ensure lower costs and better quality.
“I am absolutely opposed to privatizing Medicare,” she said. “I think there’s a lot of things we can do to put incentives in the right places in the system. We need to change where the incentives are, rewarding quality and not quantity.”
But the report said that expecting the government to cut overall costs may be challenging, since government provides most healthcare services.
“The U.S. health care financing system is broken and increasingly is dominated by the government,” the report reads. “By transitioning to a third-party payment system, we have separated the consumer of health care products and services from the direct payment for them. Most consumers do not know what treatments costs, and except for the cost of insurance or copays, they really do not care.”
Johnson and other concerned congressional members might find an ally in President Trump, who vowed to “make a deal” with the Democrats to “fix healthcare.”
But a healthcare bill rolled out by the GOP failed last year, despite the president’s support.
Trump blamed the GOP-led Congress, which once again failed to repeal and replace Obamacare, despite eight years of campaign promises.
“I think we’re probably in that position where we’ll let Obamacare fail,” Trump said after the bill failed. “We’re not going to own it. I’m not going to own it. I can tell you, the Republicans are not going to own it.”
Democrats have used the opportunity to blame Republicans for the premium cost hikes, saying the GOP is “sabotaging” the health care markets and driving up premiums.
But Sen. Johnson said although Obamacare contributed to the problem, healthcare’s uncontrollable spending was already “highly predictable.”
But he said he hopes Congress will take action because it has already taken the first step toward fixing the problem, which he said is “admitting you have one and then properly defining it.”
And McCaskill said although the GOP hasn’t passed a comprehensive reform bill, there are still things Congress can do to temporarily help ease the costs for taxpayers.
“There are a whole lot of things we can do to bring down costs,” she said.