Medicaid fraud weighs heavy on budgets—both state and federal—and robs important resources from the truly needy. Every dollar lost to waste, fraud, or abuse is a dollar that cannot go to fund services for those with genuine and urgent needs.
So, it is alarming that recent audits in Kentucky found a troubling number of individuals receiving Medicaid despite being potentially ineligible. In fact, two separate federal audits uncovered that, under the Beshear administration, up to eight percent of Medicaid enrollees in Kentucky were potentially ineligible for the benefits they were receiving.
The numbers add up quickly and have a massive effect: more than 100,000 enrollees were potentially ineligible, costing taxpayers hundreds of millions of dollars.
It’s bad enough that tax dollars are being misspent and taxpayers are on the hook for the bill. Compounding that is the sad reality that every dollar spent on an ineligible enrollee is a dollar that cannot be used to help poor children, seniors, or individuals with disabilities. Simply put: millions of dollars are being diverted from the most vulnerable and shifted to those not even eligible under program guidelines.
Fortunately, it doesn’t have to be this way. In January, Gov. Matt Bevin received federal approval to add key anti-fraud measures to the Medicaid program, including a six-month ban on individuals who commit welfare fraud. A new law signed by Gov. Bevin on April 11 will supercharge those efforts, further crack down on welfare fraud, and preserve resources for the truly needy.
House Bill 363—made possible by the tireless work of state Representative Regina Huff, House Majority Floor Leader Jonathan Shell, Acting Speaker David Osborne, Representative Kim Moser, and Senator Max Wise—requires Kentucky’s welfare agencies to routinely crosscheck welfare enrollment against employment records, death records, lottery winnings, and out-of-state welfare spending, among other things. This commonsense legislation ensures that those on the program are truly eligible and that those who are ineligible can be removed from the system. It also guarantees that future administrations cannot undo the substantial progress this legislative effort will make or easily return to the days of the Beshear administration, where welfare fraud ran rampant.
In other states with similar reforms, ineligible individuals were found to have won the lottery, be living out-of-state, receiving benefits in multiple states, and—believe it or not—some were even dead. Michigan identified more than 7,000 lottery winners still collecting welfare, some with jackpots as high as $4 million. Illinois uncovered more than 14,000 dead enrollees still on Medicaid—some of whom had died as early as 1989. In Utah and Maine, individuals were found to be using their welfare benefits exclusively out-of-state, including in far-off locations like Alaska and Hawaii. And in Arkansas, more than 20,000 individuals with high-risk identities, including people using stolen identities or even fake Social Security numbers, were found to be enrolled in the program.
It’s clear that these weren’t isolated incidents. Welfare fraud is happening in every state, and Kentucky is no different. But with these new anti-fraud initiatives, Kentucky is cracking down on fraud and abuse, ensuring that the welfare system remain a temporary safety net for the most vulnerable.
Governor Bevin’s anti-fraud initiatives were a critical first step for program integrity. House Bill 363 will supercharge those efforts, bringing Kentucky’s welfare programs into the 21st century and preserving the state’s limited resources for the truly needy.
Jonathan Ingram is vice president of research at the Foundation for Government Accountability.
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