An Easy Way to Reduce Medicare Fraud

by John R. Graham

Congratulations to the FBI for busting the biggest Medicare fraud operation yet discovered. An Armenian gang defrauded Medicare of a reported $163 million. A key enabler of the fraud was the theft of 2,900 Social Security numbers, which the fraudsters used to bill Medicare for fake medical services. While Medicare fraud will never be eliminated, there is a straightforward way to dramatically reduce it — immediately. And it wouldn’t need investigation by police, either. Instead, it would rely on Medicare beneficiaries themselves.

Voucherization is the solution. Roundly condemned by President Obama, voucherizing Medicare would instantaneously put every American senior on the beat against fraud. Imagine if the Social Security Administration added the value of each senior’s Medicare benefit to his Social Security deposit, instead of keeping those dollars out of seniors’ control and under the control of third-party contractors engaged by the Centers for Medicare & Medicaid Services.

Seniors would be free to decide how to spend their Medicare dollars. Most of them would spend some on premiums for low-cost health insurance that kicked in once they’d incurred a catastrophically expensive illness or accident. They’d keep the rest of the money to spend on predictable health expenses like tests, which were reportedly the procedures most frequently abused by the fraud ring. Under such a reform it would be almost impossible for such a massive fraud to succeed, because the seniors whose Social Security numbers were stolen would be receiving the bills, instead of contractors hired by the government.

Reducing fraud would be an excellent benefit of voucherizing Medicare.