On February 25, House Republicans succeeded in passing a budget proposal that aims to cut $1.5 trillion in federal spending, a target that will be challenging to reach without significantly reducing Medicaid funding.
Medicaid is a critical source of health insurance for nearly 20% of Americans, and according to polls, most voters are against any cuts to the program. In an effort to mitigate potential political repercussions, Republicans have argued that any Medicaid reductions would target fraud and waste rather than essential services.
House Speaker Mike Johnson (R-LA) described Medicaid as “hugely problematic” due to high levels of fraud, waste, and abuse, claiming, “The estimate is $50 billion a year in fraud alone in Medicaid.” Johnson emphasized the commitment to maintaining benefits for qualified individuals, focusing instead on eliminating inefficiencies.
The $50 billion fraud figure mentioned by Johnson can be traced back to Stewart Whitson, a senior director at the conservative Foundation for Government Accountability. Whitson addressed alleged Medicaid fraud in testimony given to the Subcommittee on Delivering on Government Efficiency on February 12, where he highlighted issues with improper payments, many of which are not fraudulent but are rather errors in billing or paperwork.
In a similar vein, Rep. Mark Alford (R-MO) remarked on February 24 that he would support Medicaid savings, citing “waste, abuse, and fraud” as widespread issues across government programs, as revealed by the DOGE data.
The extent of DOGE’s resources to investigate Medicaid fraud remains uncertain, given that about 75% of Medicaid is managed by state governments, whereas DOGE audits federal operations.
Contradicting the claims of widespread Medicaid fraud, inspector general reports from the Justice Department and the Department of Health and Human Services (HHS) have consistently shown that the majority of fraud is perpetrated by healthcare providers and contractors, not by beneficiaries.
The 2023 fiscal year report highlighted the Biden administration’s success in combating Medicaid fraud, with recoveries exceeding $3.4 billion, almost double the amount recovered in the previous year.
Despite these efforts, on January 24, President Donald Trump dismissed the inspector general responsible for these reports, citing “changing priorities” as the reason.
Republicans in the House have also considered implementing new work requirements for Medicaid recipients. The nonpartisan Congressional Budget Office projects that such measures could lead to approximately 600,000 Americans losing their health coverage.
Though Trump had previously pursued significant Medicaid cuts during his first term, including a 2017 proposal to slash Medicaid funding by $880 billion as part of an Affordable Care Act repeal, he later showed hesitancy. His 2020 administration’s attempt to let states impose new work requirements faced legal challenges and was overturned by the Biden administration.
Notably, nine out of the ten states receiving the most Medicaid funding supported Trump in the 2024 election.
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