A Medicaid bill pushed by Republicans proposes significant cuts to the health insurance programme for lower-income Americans. But United States President Donald Trump has claimed the legislation would change Medicaid in ways that only combat “waste, fraud and abuse”, a phrase he repeated seven times over a couple of minutes.
“We’re not doing any cutting of anything meaningful,” the Republican president said. “The only thing we’re cutting is waste, fraud and abuse. … We’re not changing Medicaid, and we’re not changing Medicare, and we’re not changing Social Security.”
The House of Representatives passed the bill on Thursday, and it now moves to the Senate, where it could be changed. The House version doesn’t directly target Social Security or Medicare. But it changes Medicaid, including in ways that align with Republican priorities.
Congress’s nonpartisan Congressional Budget Office has projected that at least 8.6 million people will lose coverage because of the changes.
“Relatively little of the bill is clearly related to trying to reduce fraud or error,” said Leighton Ku, director of George Washington University’s Center for Health Policy Research. “There are some minor provisions about things like looking for dead people who are enrolled or checking addresses. But the major provisions are not fraud, waste or error by any means. They’re things that reflect policy preferences of the Republican architects.”
Robin Rudowitz, vice president and director of the Program on Medicaid and the Uninsured at the health policy research group KFF, agreed that the scope of the bill’s changes go further than Trump said. “The magnitude of the federal spending reductions and resulting coverage loss go well beyond rooting out fraud and abuse,” she said.
The bill’s key provisions could be removed before the final votes and enactment while others may be added.
The White House did not respond to an inquiry for this fact check.
How the federal government defines waste, fraud and abuse
The Centers for Medicare and Medicaid Services, the federal agency that runs Medicaid, offers official definitions for these three terms:
- Fraud: “When someone knowingly deceives, conceals, or misrepresents to obtain money or property from any health care benefit program. Medicare or Medicaid fraud is considered a criminal act.”
- Waste: “Overusing services or other practices that directly or indirectly result in unnecessary costs to any health care benefit program. Examples of waste are conducting excessive office visits, prescribing more medications than necessary, and ordering excessive laboratory tests.”
- Abuse: “When health care providers or suppliers perform actions that directly or indirectly result in unnecessary costs to any health care benefit program. Abuse includes any practice that doesn’t provide patients with medically necessary services or meet professionally recognised standards,” such as overbilling or misusing billing codes.
Some bill provisions can be described as targeting waste, fraud and abuse
One provision in the bill requires states to confirm recipients’ Medicaid eligibility at least every six months rather than every year under current law. Another would set stricter requirements for verifying enrollees’ addresses and other information.
Such efforts could save expenditures on ineligible people and could be classified as a waste-prevention measure.
Other provisions are more ideological than focused on waste, fraud and abuse
Several of the bill’s highest-profile provisions are driven more by ideology – differences in how expansive the programme should be and what types of people should benefit.
One of these provisions involves people in the US without documentation.
Because it’s already against the law to spend federal Medicaid funds on undocumented people, the bill takes a different approach: It seeks to make it harder for states to exclusively rely on state funds to cover immigrants in the US. Currently, 14 states and the District of Columbia cover children regardless of their immigration status, and seven states plus Washington, DC, cover at least some adults living in the US without documents too.
For these states, the bill reduces the federal government’s share of Medicaid payments from 90 percent to 80 percent.
In other words, if a state wants to keep covering undocumented people, it will face a cut in the federal reimbursement rate for the coverage of US citizens, not just immigrants in the country without documents. Budgetary pressures in these states could mean that some citizens also lose some of their benefits or all of their Medicaid coverage.
Another provision involves work requirements. The bill would require individuals aged 19 to 64 receiving Medicaid under the Affordable Care Act expansion, which was passed during former President Barack Obama’s Democratic administration, to be working or participating in qualifying activities (such as having a disability, being a caretaker for family members or attending school) for at least 80 hours per month.
Research has found that the vast majority of people who would be required to work under similar requirements are already employed or have a qualifying exemption — yet many get thrown off Medicaid because they fail to keep up with the mandatory paperwork.
“Work requirements are not about waste, fraud, and abuse. They are fundamentally changing the rules of who is eligible for the programme, and they are adding an immense set of bureaucratic obstacles and red tape for eligible people to keep coverage,” said Benjamin D Sommers, a professor of healthcare economics and medicine at Harvard University’s TH Chan School of Public Health and Harvard Medical School.
A KFF analysis in March found that fraud occurs in Medicare and Medicaid mostly by providers. “There are checks on fraud, waste, and abuse at both the federal and the state levels,” KFF wrote.
Another bill provision bans Medicaid funds spent on nonprofit organisations primarily engaged in family planning or reproductive services, which would affect Planned Parenthood and other organisations that provide abortions.
Finally, at least two provisions focus on saving money. One would require, for the first time, that states impose $35 copays for many types of care. The other would limit retroactive coverage after applying for Medicaid to one month before application, down from 90 days. These provisions don’t specify how they’d root out waste, fraud and abuse.
“The ‘Medicaid savings’ in this bill are primarily from reducing programme enrolment,” Sommers said.
Our ruling
Trump said the House bill is “not changing Medicaid,” only cutting “waste, fraud and abuse”.
The legislation includes provisions that could improve the detection of beneficiaries who aren’t eligible for coverage.
But other provisions would change Medicaid to align with Trump’s ideology and Republican priorities. The bill would incentivise states to stop using their own funds to cover undocumented people in the US; it requires people to work or do other approved activities to secure benefits; and it bans Medicaid payments to nonprofits such as Planned Parenthood, which provide abortions among other services.
Other changes aim to cut expenses, including the imposition of copays and a shorter window for retroactive coverage. Those provisions don’t specify how they’d cut waste, fraud or abuse.
