Vice President J.D. Vance recently traveled to Bangor, Maine, to spotlight the Trump administration’s crackdown on fraud in Medicaid and other critical federal health programs.
Speaking to a capacity crowd, Vance laid bare the deep challenges of Medicaid in most states: “What you have in Maine is a festering problem where people have been taken advantage of and they’ve been stolen from and your government hasn’t done anything about it.”
Vance highlighted the case of Rakiya Mohamed. Mohamed billed Medicaid for interpretation services but reportedly provided zero actual services, pocketing around $15 million over a five-year period. Mohamed later pleaded guilty in federal court to filing a false tax return and interfering with the administration of federal tax laws. And that was just one case of Medicaid fraud.
We’ve seen thousands of similar stories in Minnesota, California, Colorado, New York, and across America, amounting to tens of billions of dollars stolen from the U.S. treasury every year. All this fraud challenges the contention that our health care problems require more money from the taxpayer to solve.
Consider what targeting waste, fraud, and abuse, could do for just one health challenge: rural hospitals.
Rural hospital closures are a genuine concern for many communities that depend on them for essential services, particularly emergency care and maternity services. But special interests have long exploited the financial problems of a set of rural hospitals to promote costly policies that do little to improve rural residents’ access to care – and disproportionately benefit already well-off large, urban and suburban health systems.
Hospital industry lobbyists claim that hundreds of rural hospitals face imminent closure, warning that efforts to rein in abuses in federal health care programs will push these vulnerable facilities over the edge. That’s why the One Big Beautiful Bill Act provided $50 billion for rural health care over the next five years.
But even taking the industry’s claims at face value, the purported cost of preventing rural hospital closures is remarkably modest – and could actually be covered many times over by simply reducing waste, fraud, and abuse embedded in government health care programs.
The Center for Healthcare Quality and Payment Reform estimates that eliminating the financial losses of all rural hospitals currently at risk of closure would cost approximately $3.2 billion per year. That figure is small relative to virtually any benchmark one might choose. For example, it represents less than 0.1% of total national health care expenditures, less than 0.2% of total hospital expenditures, and about 1% of Medicaid hospital expenditures in 2024.
The $3.2 billion figure is also only 2% of actual improper payments in the Medicaid program. These payments – made on behalf of ineligible recipients or for services never rendered or inadequately documented – are estimated to have exceeded $152 billion in 2024, according to an analysis by Brian Blase and Rachel Greszler. Reports suggest that Minnesota alone lost approximately $9 billion to Medicaid fraud since 2018.
Simply sweeping up the fraud schemes in just a few of the worst states could make all the difference. In fact, eliminating rural hospital losses would require reallocating only a tiny fraction of the federal government’s annual Medicaid improper payments – far from a major fiscal undertaking.
Reforms made in last year’s One Big Beautiful Bill restore some fiscal discipline in Medicaid, and additional savings will be achieved as these reforms are implemented over the next several years.
Each week that goes by reveals new headlines of waste, fraud, and abuse in our government healthcare programs. Those stories and the best research show that solving healthcare challenges like rural health care don’t require more money – just smarter use of the taxpayer funds we already have.
As Vice President Vance suggested, if both parties come together to target fraud we cannot only save money, but help patients get the care they need, no matter where they get their care in America.
