VERONIQUE DE RUGY: The Minnesota Fraud Scandal Is Just the Tip of the Iceberg.

Minnesota is not the exception but rather the example Americans finally noticed. Medicaid fraud has been endemic at the state and federal levels for decades. Politicians haven’t done much, even with scholars and journalists raising the alarm.

Medicaid reports $543 billion in “improper payments” over the past decade, though that figure omits one of the largest sources of error: whether states correctly determined the eligibility of the individuals they enrolled and paid providers on behalf of. According to Paragon Institute calculations, this brings improper payments to $1.1 trillion over those 10 years.

Improper payments are not identical to fraud; many involve missing documentation or administrative errors. But that distinction offers little comfort considering how little money is recovered. They are also an open invitation for more abuse.

Actual fraud, meanwhile, is widespread and persistent. In 2024 alone, state Medicaid Fraud Control Units reported more than 1,151 convictions and more than $1.4 billion in civil and criminal recoveries. Federal enforcement recovers a tiny share of what is stolen. Fraud that goes undetected never appears in the data.

That’s only the tip of the iceberg. Medicare, the Supplemental Nutrition Assistance Program (SNAP), and many other welfare programs also suffer from massive fraud. The Affordable Care Act’s (ACA) exchange subsidies provide another cautionary example.

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