Earlier this month, President Barack Obama predicated a $900 billion government expansion of health care on a promise to eliminate waste and abuse in Medicare.
“[W]e’ve estimated that most of this plan can be paid for by finding savings within the existing health care system — a system that is currently full of waste and abuse,” Obama said in his televised address to Congress.
In one regard, the president was right. Waste, fraud and abuse in government-provided health care are very real problems. In another, he was terribly wrong to suggest that we can pay for his plan solely by rooting out waste, fraud and abuse. Unless the president is ready to address the underlying spending programs that lead to this loss of taxpayer dollars, problems in the health care system will continue to run amok.
Last month, the Republican staff of the House Oversight and Government Reform Committee released a report titled “Medicare Experience Suggests Americans Should Expect Massive Fraud with Nationalized Health Care.” The report shed light on the rampant fraud that has kept Medicare on the Government Accountability Office’s High-Risk Series since 1990 and underscored why Obama should look at health care waste as a budget-busting threat and not a piggy bank to pay for reform.
If, after months of the health care debate, anyone still believes government-run health care can function with greater efficiency and less waste than the private sector, ABC News has done some very good reporting on Medicare that counters this erroneous notion. In one interview, a convicted criminal said he made about $8 million over seven years by fraudulently billing Medicare. The convict, now serving time in federal prison, seemed to like government-run health care. “We would make anywhere between a million to $2 million in a short time frame, maybe two, three months,” he explained. Bilking the government, he added, was a lucrative occupation. “Ferrari, Porsche, Lamborghini, exotic cars … I lived a good life.”
Of course, this man is just one among many crooks who defraud taxpayers. Thankfully, he got caught. Too many scam artists, however, get away.
Although Americans can’t expect the elimination of waste or the prevention of abuse to pay for health reforms, the president wasn’t stretching the truth when he talked about the amount of waste and abuse that occurs in government-run health care programs. Attorney General Eric Holder earlier this year estimated that “every year we lose tens of billions of dollars in Medicare and Medicaid funds to fraud.”
The Department of Justice, to its credit, has tried to protect taxpayers from a fleecing. In South Florida, federal agents recently conducted spot checks of 1,581 firms that billed Medicare for durable medical equipment. Of these firms, 491 — nearly a third — were fictitious storefronts submitting bogus bills to the government and stealing taxpayer dollars.
Despite this effort, in 2008 the government recovered only $1.48 billion in Medicare and Medicaid fraud. Once the costs of investigation and prosecution are factored in, the Department of Justice recovered a mere $350 million for U.S. taxpayers.
At that rate, it would take 257 years of recouping fraud to pay for just one year of the president’s $900 billion plan.
Cutting back on fraud is certainly a long-term goal of health care reform, but we can’t depend on it to pay for systemic reforms in health care.
Americans who struggle to pay for affordable insurance are worried about being denied coverage for pre-existing conditions, and about this economy cutting short their chance for portable, dependable and affordable health insurance even if they change or lose their jobs.
Many families fear a loss of health care choice, rising costs, higher premiums, and dropped coverage if the president’s scheme becomes law. Many rightly hear the president’s call to find “savings within the existing health care system” as code words for cutting Medicare services for seniors and raising health costs for middle-class Americans. The president’s too-good-to-be-true rhetoric on health care, coupled with his past vocal support for moving this country to a true single-payer, government-run health care system, doesn’t calm their fears.
Obama has promised to “seek common ground” on health care reform. He has warned participants in the health care debate: “If you misrepresent what’s in the plan, we will call you out.” The president should take a step toward fulfilling each of these pledges and present some honest answers about how he intends to pay for health care reform — cutting waste, fraud and abuse isn’t a serious or credible explanation.
Can Americans really expect the government to give them better coverage without paying for it? Refusing to talk about the tough choices Americans will have to make undermines the chance of real reform.
Rep. Darrell Issa (R-Calif.) is ranking member of the House Oversight and Government Reform Committee.