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By John Hendrickson and Rea S. Hederman Jr.

A cursory review of the Iowa state budget shows health services and Medicaid to be the second largest line item. That alone suggests a program audit is in order to ensure every dollar is spent wisely — and, importantly, that resources are used to help people who truly need Medicaid services.

Before showing what other states have learned from their Medicaid audits, let’s look at the magnitude of Medicaid in Iowa. Iowa’s Medicaid program has expanded due to the federal Patient Protection and Affordable Care Act. A recent estimate is one in five Iowans receives Medicaid, at a total cost to Iowa taxpayers of $1.3 billion, a figure that is ever increasing. When all federal, state, and local taxpayers’ dollars are taken into consideration, the Hawkeye State Medicaid program costs more than $5 billion annually.

Throughout the country, many Medicaid dollars are lost due to honest mistakes but also, unfortunately, to fraud. Though states have some tools to ensure Medicaid program integrity, an audit of Iowa’s Medicaid program is needed to protect both taxpayers and Medicaid recipients. The Iowa Senate recognizes the value of an audit and recently passed legislation to create an audit process.

States that have audited their Medicaid programs have found shocking results. Jonathan Ingram at the Foundation for Government Accountability describes some of the Medicaid fraud findings from around the country.

  • Michigan identified more than 7,000 lottery winners who were still collecting welfare, some with jackpots as high as $4 million.
  • Illinois uncovered more than 14,000 dead enrollees on Medicaid.
  • Utah and Maine found that individuals were using their welfare benefits exclusively out-of-state.
  • Arkansas discovered more than 20,000 individuals with high-risk identities, including people using stolen identities or even fake Social Security numbers, who were enrolled in its program.
  • In Louisiana the legislative auditor made a random selection of 100 Medicaid recipients and determined that 82 of those individuals did not qualify to be receiving all their benefits.
  • In March of 2019, Oregon announced that a Medicaid audit will save the state over $100 million annually by ending improper payments to people who didn’t qualify for the program.

Robert Doar, scholar and newly announced president of the American Enterprise Institute, wrote, “federal and state program administrators have consciously and significantly loosened the verification processes that once were part of enrolling applicants” in programs such as Medicaid. The result is money wasted and not going to those who need better Medicaid services.

For the last six months, Arkansas has reported on why many people in its Medicaid expansion population recently lost Medicaid coverage in the state. Arkansas officials found that over ten percent of the population that lost coverage were improperly receiving benefits, because they earned too much money. Many other recipients had left the state or could not be found. Some were in jail while other recipients had died. Again, every dollar wasted is a dollar that cannot be spent on the truly needy.

It is unclear how much Medicaid fraud may be present in Iowa, but the evidence from other states strongly suggests that a program audit is needed. The Medicaid program was never intended to be a universal health care solution. Thus, it is vital that policymakers take steps to reform this entitlement program and ensure that the benefits only go to those who qualify.

Iowa taxpayers deserve to know that their hard-earned dollars are being spent appropriately, whether that is within Medicaid or any other governmental program. To allow Medicaid fraud is a fleecing of taxpayers, and it is unfair to those Iowans who need the services that Medicaid provides.

Author: John Hendrickson

John Hendrickson is a Policy Analyst with Iowans for Tax Relief, West Des Moines, Iowa


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