Last year, Medicare sent out $60 billion in the wrong amount, to the wrong person, or for the wrong reason, and that’s just one chunk of an iceberg of federal funds that are going where they’re not supposed to go.
The Government Accountability Office announced in July that Medicare is one of the programs at “high risk” for what officials call “improper payments,” because of the program’s size, complexity and “susceptibility to mismanagement.”
The U.S. government estimates that it sent out $144 billion of “improper payments” across all agencies in 2016, up from $137 billion in 2015.
Some of the losses can’t even be calculated. The Centers for Medicare and Medicaid Services (CMS) said it will be 2022 before it can estimate the improper payments related to the advance premium tax credit under the Affordable Care Act, which CMS assessed last year was “susceptible to significant improper payments.” The GAO found that when individuals applied for the credit, no one verified their identity, address or eligibility.
The Social Security Administration paid $171 million to people who claimed benefits under two Social Security numbers, according to an audit by the agency’s inspector general, and in 13,000 cases, the SSA continued paying benefits to people it knew were dead.
The money really flies out the door at the Internal Revenue Service, which sends out tax refund checks to people who qualify for “refundable” tax credits whether they paid any taxes or not. An audit found “improper payments” of $16.8 billion for the Earned Income Tax Credit in 2016, an error rate of 24 percent. The IRS also found that the EITC was claimed by 49,000 people who had Social Security numbers but were not authorized to work in the U.S.
Another $7.2 billion in wrongful payments went out to people claiming the Additional Child Tax Credit, and $1.1 billion was lost to improper payments for a tax credit for higher education.
The GAO estimates that between 2003…