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Government overpays benefits claims by $100 billion every year

Hallway near the Congressional Budget Office in Washington, D.C.
Hallway near the Congressional Budget Office in Washington, D.C.
Congressional Budget Office

In austere times, American taxpayers can rightly be outraged by the level of waste, fraud and abuse they have to underwrite each year.

One of the biggest offenders: collectively, it is the country’s welfare system. And while most people agree that a rich nation should have a social safety net for its most needy citizens, they also agree that, if they’re footing the bill, the least the government could do is spend the public’s money more carefully.

A new report chart posted at National Review Online demonstrates clearly the need for some oversight: In 2010, the Centers for Medicare and Medicaid sent over $100 billion to the wrong recipients.

“Medicare fee-for-service, Medicare Advantage, and Medicaid top the chart and combine for $61.9 billion in improper spending, which should surprise no one given their sheer size. But their relatively high rates of errors should especially worry us as the federal government is expanding its reach into the health-care market — does anyone think the Affordable Care Act will be any different from other federal health programs?” writes Veronique de Rugy, who co-produced a chart with colleague Jason Fichtner showing improper payment percentages among the agencies.

The highest? Medicare fee-for-service, with $29.6 billion in improper payments (an 8.5 percent improper payment rate), followed by Medicaid at $19.2 billion (7.1 percent), Medicare Advantage Part C at $13.1 billion (11.4 percent), Earned Income Tax Credit at $12.6 billion (22.7 percent), and Unemployment Insurance at $10.3 billion (11.4 percent).

You can see the chart here.

“This isn’t new, of course – OMB and GAO have been reporting [these] numbers for years,” de Rugy writes. “But it’s still astonishing that people tolerate such high levels of improper payments. The reality is that federal spending has grown too massive to be adequately overseen, and the resultant waste, fraud, and abuse squanders public resources and undermines trust in government.”