Somewhere in this country right now, someone is sitting at a kitchen table trying to figure out what just happened to their health insurance.
They had Medicaid. They were eligible for Medicaid. They did not stop being eligible for Medicaid. But they got a letter saying their coverage was terminated, and the reason buried in the bureaucratic language is that they didn’t complete a verification process in time — a form they may not have known existed, submitted through a portal they may not have been able to access, documenting work hours for a job that may have had irregular scheduling and a boss who wasn’t going to sign anything.
This is the system working exactly as designed.
On July 4, 2025 — Independence Day, which I will leave without comment — Congress enacted work requirements for Medicaid as part of the One Big Beautiful Bill. The Congressional Budget Office projects 5.3 million people will lose coverage specifically through this provision. The stated justification was fiscal responsibility. Stopping fraud. Protecting taxpayers from people gaming the system.
I want to take that justification seriously. I want to follow the fraud argument wherever it actually leads. Because when you follow it honestly, you end up somewhere Congress had no intention of going.
THE FRAUD THEY TOLD YOU ABOUT
Let’s start with what Medicaid fraud actually looks like, according to the government’s own accountants.
The Centers for Medicare and Medicaid Services runs a program called the Payment Error Rate Measurement — PERM — that audits Medicaid payments and identifies improper payments including fraud. After paperwork errors are stripped out, the actual fraud rate in traditional Medicaid is approximately 1.17 percent.
Apply that to the $691 billion the federal government spent on Medicaid in 2025 and you get roughly $8 billion in annual fraud.
That is not nothing. Eight billion dollars is real money and it should be addressed. But hold that number. We are going to need it in a moment.
THE FRAUD THEY DIDN’T TELL YOU ABOUT
In March 2025, MedPAC — the nonpartisan federal advisory body that serves as the government’s accountant for Medicare — released its annual report to Congress.
The finding was not buried. It was the headline: the federal government paid $84 billion more for Medicare Advantage enrollees in 2025 than it would have cost to cover the exact same people under traditional Medicare. In a single year.
Medicare Advantage is the privatized alternative to traditional Medicare. Private insurers manage coverage for about 33 million beneficiaries and receive a government payment per enrollee. The payment is adjusted upward for sicker patients — the idea being that covering someone with serious health conditions costs more, so the insurer gets paid more.
The mechanism of the fraud is called upcoding. Insurers add diagnosis codes to patient records — conditions the patient does not have, was never treated for, never complained of — in order to make the patient appear sicker and generate a higher payment. The Department of Justice described it plainly in its filings: adding unsupported diagnosis codes to patient records to secure higher payments even when enrollees do not receive treatment for those conditions.
Kaiser Permanente paid $556 million to settle civil allegations of exactly this practice. It was the largest Medicare Advantage fraud settlement in American history. Kaiser did not admit wrongdoing.
UnitedHealth Group — the largest health insurer in the country, which posted $447.6 billion in revenue in 2025 — is currently facing an active criminal prosecution by the Department of Justice for the same conduct. Not a civil case. Criminal.
Now do the math.
Medicaid beneficiary fraud: approximately $8 billion per year.
Medicare Advantage insurer fraud: $84 billion per year.
The fraud being committed against the government by the insurance industry is ten times larger than the fraud being committed by the people Congress just stripped of their health coverage.
And while the criminal prosecution of UnitedHealth Group was proceeding, the Trump administration proposed increasing Medicare Advantage reimbursement rates by $13 billion.
Ten to one. And they gave the ten a raise.
WHAT FISCAL RESPONSIBILITY LOOKS LIKE IN PRACTICE
Before we get to the largest fraud of all, let’s look at what the work requirement has actually produced in the real world.
Georgia ran the only active Medicaid work requirement program in the country before the national law passed. It was called Pathways to Coverage. The Government Accountability Office — the government’s own watchdog — documented what happened.
From 2021 through the first half of 2025, Georgia spent $54.2 million administering the program. In the same period, it spent $26.1 million on actual medical assistance for enrollees.
The government spent more than twice as much checking whether poor people deserved coverage as it spent covering them.
Of an estimated 175,000 people eligible for the program, approximately 6,500 enrolled. Millions of dollars went to consultants. Monthly verification requirements were scrapped because the administrative costs were ballooning out of control. Montana estimated it would need to hire 50 additional staff just to handle more frequent eligibility checks.
The CBO’s $326 billion in projected ten-year savings — roughly $32 billion per year — does not account for any of these implementation costs. CBO explicitly did not calculate them. The gross savings figure is the number Congress cited. The net figure, after you subtract the cost of building the bureaucracy to enforce it, is smaller. How much smaller we don’t know precisely, because Georgia is the only data point we have, and Georgia’s data is not encouraging.
What we do know is this: Congress enacted a law projected to strip coverage from 5.3 million eligible Americans to stop $8 billion in annual fraud, using a mechanism that in its only real-world test spent two dollars on paperwork for every dollar it spent on healthcare.
THE HUMAN LEDGER
I want to stop here before we get to the largest number, because the largest number is a fiscal one, and fiscal arguments have a way of making people feel like we’re talking about spreadsheets rather than human beings.
We are not talking about spreadsheets.
One hundred million Americans are currently carrying medical debt. The combined balance is $220 billion. Thirty-six percent of American households are in this position. These are people who got sick and got a bill and couldn’t pay it, not because they were irresponsible but because the bills were unpayable. No other wealthy country produces this outcome at this scale.
Medical bankruptcy contributes to approximately two-thirds of all personal bankruptcies in the United States. It does not exist as a meaningful statistical category in Germany, France, Australia, Taiwan, or Japan. Not because those countries have fewer sick people. Because those countries have a different financial architecture. Medical bankruptcy is not a personal failure. It is a design feature of a system that was prevented from changing.
Forty-seven percent of Americans delayed or skipped medical care last year because they couldn’t afford it. Seventy-eight percent of Millennials. The Johns Hopkins research published in 2025 found that delays of even one to three weeks in beginning cancer treatment correlate with meaningfully worse disease control and lower survival rates. People are dying of conditions that were caught late because they couldn’t afford the appointment that would have caught them early.
About 25 percent of workers who would otherwise leave their jobs don’t — because leaving means losing their health insurance. They stay in positions they are wrong for. They don’t start the company they were going to start. They absorb management behavior they would otherwise walk away from, because a child’s specialist care hangs in the balance. A quarter of the American workforce is making career decisions based not on economic signals but on insurance contracts. The labor market distortion from this alone is enormous and almost never discussed.
Families are spending down lifetime savings — sometimes everything they ever accumulated — to qualify for Medicaid long-term care. The rules require you to be nearly destitute before the government will help. So people who saved carefully and did everything right watch their assets disappear paying for a parent’s memory care at $8,500 a month, until there is nothing left and Medicaid finally steps in. This is not an edge case. It is the American long-term care system.
More than 140 rural hospitals have closed since 2010. When a rural hospital closes, the cardiac patient who needed treatment within 90 minutes doesn’t get it. The maternal mortality rate in the United States is the highest of any wealthy nation. Black women die from pregnancy-related causes at approximately three times the rate of white women — a gap that persists across income and education levels.
People are rationing insulin. In 2025. In the wealthiest country on earth. Cutting doses, skipping days, hoping the math works out until the next paycheck.
These are not abstractions. They are the compounding human cost of a system that was prevented from changing. Every one of these outcomes exists inside the window when the savings weren’t being realized, when the reform wasn’t happening, when the lobbying was working. They are not accidents. They are the receipts.
THE $2 TRILLION NOBODY IS TALKING ABOUT
Now we get to the largest fraud.
Nineteen of twenty-two economic analyses of single-payer healthcare agree that it would produce net savings in the first year of implementation. Not eventually. In year one. The savings come from two primary sources: eliminating approximately $500 billion in annual administrative waste generated by the multi-payer billing apparatus, and using the government’s purchasing power to negotiate drug prices the way every other wealthy country does.
The most conservative ten-year savings estimate comes from the Mercatus Center at George Mason University — an institution funded by Charles Koch, whose political network has spent decades opposing government expansion of any kind. Even that study, built on the most cautious assumptions available, found that Medicare for All would reduce total national health expenditures by $2 trillion over ten years compared to the current system.
The Political Economy Research Institute at the University of Massachusetts put the ten-year savings at approximately $5 trillion.
The range is $2 trillion to $5 trillion. The floor comes from the opposition’s own researchers.
Now ask: who prevented this from happening?
The Partnership for America’s Health Care Future was formed specifically and exclusively to defeat single-payer. Its members include the American Medical Association, PhRMA, the Federation of American Hospitals, and Blue Cross Blue Shield entities. The healthcare sector spent $439 million on lobbying in 2025 alone. Medicare Advantage insurers deployed more than 220 lobbyists on Capitol Hill and spent $330 million lobbying over five years. PhRMA contributed $530,000 to Project 2025 organizations, which called for repealing Medicare drug price negotiation authority.
The industries doing this lobbying are the same industries generating the $84 billion in annual Medicare Advantage overpayments. They are calling single-payer fiscally irresponsible while their own researchers document $2 trillion in foregone savings. They are invoking government waste while billing the government $84 billion a year for diseases they never treated.
The $2 trillion in savings that didn’t happen — the $500 billion in annual administrative waste that kept running, the drug prices that stayed three times higher than peer countries, the MA overpayments that kept accumulating — is the largest healthcare fraud in American history. It is not prosecuted because it is legal. It is legal because the people committing it spent $439 million last year making sure it stayed that way.
WHAT FRAUD ACTUALLY MEANS
I am not a lawyer and I am not making a legal argument. But in plain English, fraud means deliberately misrepresenting material facts for financial gain.
The industries opposing single-payer have known for years — their own researchers have documented — that the current system costs more than the alternative. They have represented to the public, to Congress, and to the media that government-run healthcare would be fiscally irresponsible. They have done this while extracting $84 billion a year from the government program they administer, while billing for diseases they never treated, while a criminal prosecution winds its way through federal court.
They told you the fraud was the person who couldn’t navigate the Medicaid paperwork in time.
The actual fraud is ten times larger and comes with a lobbying budget.
And then there is the cost that doesn’t appear in any audit — the human cost documented in the section above. The bankruptcies. The rationed insulin. The cancer caught late. The rural hospital that closed. The worker who couldn’t leave the job. These are not line items in a fraud prosecution. But they accumulated in the same years the $2 trillion in savings wasn’t being realized, and the people preventing those savings were collecting their $84 billion and spending $439 million to make sure nothing changed.
WHAT THIS REQUIRES
Here is what I have learned about how this works.
The industries blocking single-payer don’t win because they have better arguments. They win because they show up every single day — in committee hearings, in regulatory comment periods, in agency meetings, in reelection fundraisers — regardless of who won the last election and regardless of what the polling says. The $439 million in annual lobbying doesn’t take election years off. It doesn’t take summers off. It doesn’t graduate and lose its institutional memory. It just keeps showing up.
You voted. You probably called your representative at some point. Maybe you donated. And the $84 billion kept flowing and the $2 trillion in savings kept not happening. That is not your failure. That is what organized institutional power looks like when it faces unorganized public frustration. Frustration without organization hits a wall that was built specifically to absorb it.
The wall doesn’t come down through individual action. It comes down when enough people who are frustrated about enough different broken things find each other, recognize that the power players blocking reform in healthcare are largely the same power players blocking reform in drug pricing and campaign finance and a dozen other areas, and start building something that shows up the way the other side shows up — continuously, across election cycles, with institutional memory that doesn’t reset every two years.
That is specifically what the forum at America’s Plan is built for. Not to tell you what to think. Not to push a party line. To be the place where the person who came in on healthcare fraud meets the person who came in on drug pricing and the person who came in on campaign finance, and where together they start to see the common thread and build the common response. A counterforce to the power players. Organized, continuous, cross-issue — the kind of civic pressure that doesn’t depend on any single election and doesn’t evaporate when the news cycle moves on.
I built this platform because I got frustrated enough to do something about it. I want to be honest: it is early, it is unproven, and we have not yet demonstrated the outcomes that would justify stronger claims. But the receipts are in. The fraud is documented. The human cost is documented. The power players are named.
What’s missing is the organized counterforce.
This article was researched and drafted with AI assistance under human review. See our full AI and editorial practices.