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Published at Open the Books Substack
A political dogfight has broken out about funding for Medicaid in the wake of President Trump’s direction to free up $880 billion in savings to fund his agenda. It’s the return of the perennial “they want to throw grandma over a cliff” claim.
But the truth is, finding savings in Medicaid, one of the most wasteful and abused federal programs, to make sure the program can serve those who are truly needy, shouldn’t be a tall order. Since the Affordable Care Act (Obamacare), Medicaid has grown far beyond its initial purpose to include able-bodied adults of working age; it’s subject to state-level schemes aimed at sapping more federal funds; and the federal government’s own auditor, the Government Accountability Office (GAO) says it’s filled with potential savings.
Indeed, House Speaker Mike Johnson said last month that the people most in need of the government’s health coverage would continue to have it. Instead, the savings would come by targeting waste, fraud and abuse rife throughout the program – to the tune of about “$50 billion a year in fraud alone,” he said.
While that figure is not quite accurate, taking aim at that type of spending is exactly what Republicans and Democrats can do to spare Medicaid from fiscal oblivion. They simply must identify savings to make the social safety net solvent without continuing to crush taxpayers with debt.
Unfortunately, it’s a refrain we’ve heard for decades already. Because it represents a “Third Rail” of American politics, politicians are only willing to mention fixes for “waste, fraud and abuse.” But the details never seem to emerge in the media, nor do the fixes get implemented.
By eliminating the waste, fraud and abuse from both Medicaid and Medicare – and doing a better job tackling improper payments across government – it’s possible to net $880 billion in savings over a decade. But it will take an unprecedented new willingness from Congress to actually do the hard work.
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