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Opioid Cash Grab: As Federal Funding Dries Up, States Turn to Settlement Money

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kffhealthnews.org – Aneri Pattani – 2025-02-25 04:00:00

Opioid Cash Grab: As Federal Funding Dries Up, States Turn to Settlement Money


At a recent Nevada legislative committee hearing, lawmakers faced off with members of the governor’s administration over how to fill gaping holes in the state’s upcoming budget.

At issue: whether opioid settlement money — paid by health care companies that were sued for fueling the opioid crisis and meant to help states abate addiction — should be funneled to two counties for a safety-net program, Temporary Assistance for Needy Families, which is aimed at helping low-income children and families.

Previous funding “will no longer be available after June 30, 2025,” the budget proposal says. By then, billions of dollars in covid-era relief from the federal government — including a set-aside for TANF, which can cover emergency aid, job training, child care, and more — is likely to have expired.

Recognizing both the need for and uptake of this assistance, Republican Gov. Joe Lombardo’s budget proposal directs $5 million in opioid settlement cash to shore up the program in the state’s most populous counties, Clark and Washoe.

The prospect of such trade-offs is smacking many states in the face as they embark on budget season.

Not only is the river of federal pandemic relief that flowed to public health, education, food assistance, child care, and more over the past few years drying up, but a deluge of actions from the Trump administration has thrown into question once-reliable federal funding for a myriad of social services and health care programs. Congressional Republicans have also threatened cuts to Medicaid, a joint federal and state health insurance program for many low-income people.

Together, these financial headwinds have left many states hunting for alternative funds to maintain crucial services.

Opioid settlement money can seem like an attractive option. More than $10 billion has landed in state and local government coffers in recent years and billions more are set to arrive over the next decade-plus.

But recovery advocates, family members who have lost loved ones to addiction, and legal experts say that money has a specific purpose: to address the ongoing addiction and overdose crisis.

Even if $5 million is a small portion of the hundreds of millions Nevada has received, some say spending it elsewhere sets a troubling precedent. Nevada Assembly Speaker Steve Yeager, a Democrat, raised this concern at the February hearing.

“There doesn’t seem to be a direct link to opioids” in the governor’s proposal directing these dollars to TANF, he said. Settlement money should not be used “to backfill budget accounts.”

Richard Whitley, director of the state’s Department of Health and Human Services, insisted at the hearing that this was an appropriate use of settlement dollars. The money flowing through TANF will help “relatives who are raising children whose parents are substance-abusing,” he said.

In addition, Elizabeth Ray, a spokesperson for the Republican governor, told KFF Health News that the money would help families at risk of losing custody of their children due to substance use, with the goal of keeping kids in their homes and “ultimately reducing the need for foster care placements.” Implementing this program through the state’s TANF system would “reduce start-up costs and implementation time,” she wrote in a statement.

But TANF is available to many families living in poverty and it was unclear how these dollars would be targeted to such a subset.

Similar budget conflicts have surfaced in Connecticut — whose Democratic governor, the CT Mirror reports, is asking lawmakers to redirect opioid settlement money to social services that were previously funded through other means, including federal dollars — and Arizona, whose legislature transferred $115 million in settlement money to the state prison system last year to help close a $1.4 billion budget deficit.

National recovery advocate Ryan Hampton expects to see more efforts like this nationwide.

“I have a very high level of fear that states are going to be tapping into these settlement dollars in every creative way they can to fill some of these budget shortfalls,” he said. “It’s a grave misuse of funds and one that is going to have dire consequences.”

Although national overdose deaths have declined recently, tens of thousands of Americans are still dying from overdoses each year. In a few states, including Nevada, such deaths increased in the 12 months leading up to September.

“The intent of these dollars is to save lives right now,” said Hampton, who is in recovery from opioid addiction and founded a Nevada-based recovery advocacy organization. He submitted a public comment opposing the Nevada governor’s budget proposal.

Hampton and other advocates worry that using opioid funds for services that, even if crucial, are only tangentially related to addiction risks a repeat of the tobacco settlement of the 1990s.

At that time, cigarette manufacturers agreed to pay state governments billions of dollars annually. Initially, states spent a chunk of that money on anti-smoking programs, said Meg Riordan, a vice president of research at the Campaign for Tobacco-Free Kids, which tracks states’ spending on tobacco prevention programs.

But over time, states encountered budget crunches and many raided or dissolved trust funds they’d set up to protect tobacco money. Instead, they funneled the cash directly into their general funds and spent it on infrastructure projects and budget shortfalls.

“Once the funds start going somewhere else, there’s a risk that they won’t come back,” Riordan said.

Tobacco use remains a leading cause of preventable death in America.

The opioid settlements have more guardrails than the tobacco settlement did, but KFF Health News’ multiyear investigation found lax oversight and enforcement.

Nevada and Connecticut are among 13 states that have explicitly restricted the practice of supplantation, or using opioid settlement funds to replace existing funding streams.

Whitley, Nevada’s DHHS director, and the governor’s office have insisted that none of their proposed uses of settlement funds are examples of supplanting.

At the February hearing, Whitley repeatedly suggested that the budget proposal was misworded, creating a false impression. “We’ll clean that up with the language,” he said.

But he also emphasized the importance of settlement dollars as federal funding sources diminish. “As ARPA [the American Rescue Plan Act] goes away and other flexible funding goes away to address problems, this becomes one that really we have to rely on,” he said.

That perspective seems reasonable to JK Costello, director of behavioral health consulting for the Steadman Group, a company that he said is helping about a dozen local governments across the country administer the settlements.

Ideally settlement money adds to existing services, he said, but realistically, some safety-net programs, even if they don’t directly address addiction, can be a lifeline for people with opioid use disorder. If major cuts in federal spending imperil those programs, using settlement funds to save them could be worthwhile.

“Getting people into great treatment when their housing voucher is cut isn’t really that helpful,” Costello said. “Treatment isn’t going to work if they’re not able to eat or feed their kids.”

The tricky thing is that many community organizations that work directly on addiction and recovery issues are also feeling the crunch of expiring federal aid and expected federal program changes that would reduce their resources, Costello said. When everyone is strapped, deciding where limited settlement dollars can do the most good becomes increasingly challenging.

Some places presciently set aside opioid settlement funds in “emergency” or “sustainability” accounts that could be tapped for addiction services in case of declining federal aid. South Dakota has such a fund with more than $836,000, according to its 2024 opioid report. None of it has been used yet.

Kristen Pendergrass, vice president of state policy for the addiction-focused nonprofit Shatterproof, hopes states turn to rainy day funds first, before raiding settlement accounts.

Nevada has $1.23 billion in its rainy day fund, more than the national median, according to The Pew Charitable Trusts.

“It would be a slippery slope if we stop paying attention now” and allow settlement funds to be used for anything, Pendergrass said. “The money was won to remediate harms and save lives. It should be used that way.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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This article first appeared on KFF Health News and is republished here under a Creative Commons license.

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Progressives Seek Health Privacy Protections in California, But Newsom Could Balk

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kffhealthnews.org – Vanessa G. Sánchez – 2025-03-14 04:00:00

When patients walked into Planned Parenthood clinics, a consumer data company sold their precise locations to anti-abortion groups for targeted ads.

When patients picked up prescriptions for testosterone replacement therapy, law enforcement retrieved their names and addresses without a warrant.

And when a father was arrested by immigration authorities, agents allegedly accessed his personal information from a medical clinic where he received diabetes treatment.

Progressive California lawmakers have proposed a number of bills aimed at bolstering privacy protections for women, transgender people, and immigrants in response to such intrusions by anti-abortion groups, conservative states, and federal law enforcement agencies as President Donald Trump declares the nation “will be woke no longer” and flexes his executive power to roll back rights.

Democrats have supermajorities in the state legislature, but even if they pass the proposals, they may first need to lobby one of their own: Gov. Gavin Newsom, who has noticeably tempered his once harsh criticism of Trump.

Last month, the Democratic governor issued a rare veto threat against a bill that would expand the state’s sanctuary law to limit cooperation between state prisons and federal immigration agents. And Newsom recently called transgender athletes’ participation in women’s sports “deeply unfair” on his new podcast with guest Charlie Kirk, a founder of the conservative group Turning Point USA. Newsom went on to tell Kirk that he had a “hard time with” the way the right talks about transgender people.

Billions of dollars are also on the line for California. Newsom visited the White House last month seeking unconditional aid for wildfire victims in Los Angeles, and the state relies on Washington for over 60% of its Medicaid budget, which is vulnerable to significant cuts under the GOP’s budget blueprint.

“California’s leaders have not been as aggressive, out of recognition that there are many things that the state needs federal cooperation on,” said Thad Kousser, a political science professor at the University of California-San Diego.

A Newsom spokesperson declined to comment on pending legislation. He has a track record of supporting abortion, transgender, and immigrant rights.

Since taking office, Trump has granted the Elon Musk-controlled Department of Government Efficiency — created through a Trump executive order — access to previously restricted data, including medical information, raising concerns that sensitive information could be exposed without proper safeguards. 

The White House did not respond to requests for comment.

While most Americans are familiar with the Health Insurance Portability and Accountability Act, known as HIPAA, it offers only narrow protection for patients in health care settings. There’s no comprehensive federal law protecting data privacy.

Health care information has increasingly become a tool of surveillance and enforcement, and in states that have banned certain medical treatments or toughened immigration laws, vulnerable populations are at greater risk, said Suzanne Bernstein, a health privacy rights expert with the Electronic Privacy Information Center.

Progressive Democrats are concerned that personal information and people’s medical decisions could be used to monitor or criminalize patients, facilitate arrests in or near health care facilities, or jeopardize access to health care services.

They and health privacy advocates say now is the time to shore up protections for the nearly 2 million immigrants living in California without authorization, the more than 200,000 transgender adults in the state, and thousands of people — living in the state or out of state — in need of abortion care in California each year. Some of these laws could take effect immediately if signed.

“This is about making sure that people are able to access critical health care in California and to take the politics out of our hospitals and health clinics,” said state Sen. Jesse Arreguín, who hopes the governor would sign his bill to protect immigrants.

The bills are expected to be debated in Sacramento in the coming months.

Since the Supreme Court overturned the constitutional right to abortion, anti-abortion groups have purchased location information from consumer data companies to target people seeking abortion care with anti-abortion ads. And authorities in states with abortion bans have used cellphone data to enforce laws beyond their borders.

A bill introduced by state Assembly member Rebecca Bauer-Kahan, AB 45, would make geofencing, the collection of phone location by data brokers, illegal around health care facilities that provide in-person services. It would also prevent reproductive health information collected during research from being disclosed in response to out-of-state requests.

Conservative organizations said the proposal would single them out by restricting their ability to inform women about alternatives to abortion, including services offered by crisis pregnancy centers.

“I think that could very well be a First Amendment violation,” said Jonathan Keller, president of the California Family Council, a statewide anti-abortion nonprofit. “It doesn’t seem like the bill would be prohibiting or putting any restrictions on a group like Planned Parenthood if they wanted to market or target to a local high school or college.”

So far this year, lawmakers in 49 states have introduced more than 700 anti-transgender bills, seeking to ban gender-affirming care, prohibit gender identity education in schools, or restrict transgender students from participating in sports, according to the Trans Legislation Tracker, a national research organization tracking bills affecting transgender people. Transgender adults represent less than 1% of the U.S. population.

And some states with bans or restrictions on gender-affirming care have been targeting health care data. In 2023, Republican Gov. Ron DeSantis requested that Florida universities release data on the number of individuals who have been diagnosed with gender dysphoria or received treatment at campus clinics. That same year, Missouri’s Republican attorney general, Andrew Bailey, submitted 54 requests to one hospital seeking information about gender-affirming care procedures.

Trump has issued a series of executive orders to ban access to gender-affirming care for minors. Federal judges have temporarily blocked some portions of his orders.

To guard against other states that criminalize or ban gender-affirming care, California state Sen. Scott Wiener wants to expand current protections for minors to include adults.

His bill, SB 497, would require law enforcement to obtain a warrant to access state databases on gender-affirming care and make it a misdemeanor to release the data to unauthorized parties. It would also prohibit health care providers, employers, and insurers from releasing information about a person who seeks or obtains gender-affirming physical and mental health care to an agency or individual from another state.

“We want to make sure that we are as comprehensively as possible shielding trans people from hate emanating from the federal government, other states, and private parties,” Wiener said.

Keller countered that authorities in states with bans on abortion or gender-affirming care should have access to medical information as they investigate providers who could harm patients or coerce them into procedures against their will. He cited a lawsuit against Kaiser Permanente over a teenager who detransitioned after undergoing gender-affirming care. A 2015 survey found it was uncommon for people undergoing gender-affirming care to decide to permanently detransition.

“The only way that you’re able to uncover that level of widespread malpractice and malfeasance is if these health care records are able to be accessed,” Keller said.

The California Family Council plans to oppose both bills.

Earlier this year, Trump rescinded a long-standing policy of not making immigration arrests near hospitals, schools, or churches. The decision has providers fearful that Immigration and Customs Enforcement agents will disrupt their work at health facilities and prompt immigrants to skip medical care — for themselves or, of particular concern, their children.

Anticipating the move, California’s Democratic attorney general, Rob Bonta, issued guidance in December advising health care providers how best to respond if ICE comes to their doorstep. But while private entities are encouraged to follow these policies, only state-run facilities are required to adopt them.

“Some health care providers have implemented them, but not everyone has,” Arreguín said.

Arreguín’s SB 81 would require all health care facilities, including hospitals and community-based clinics, to follow state guidance to limit cooperation with immigration authorities. It would also prohibit providers from granting access to private areas or places where a patient is actively receiving treatment or care, unless there’s a warrant.

Another immigration bill, AB 421, would limit the sharing of local law enforcement information if agents plan to make an arrest within a one-mile radius of a hospital or medical office, a child care or day care facility, a religious institution, or a place of worship. California law enforcement has some discretion to share information with immigration agents when an individual has been convicted of a serious crime or felony.

Kousser said immigration is more complicated for California politicians than health privacy. Although a February poll by the Public Policy Institute of California found that 7 in 10 Californians think immigrants are a benefit to the state, Kousser said that lawmakers, especially those who won by narrow margins in contested districts, still have to make tough political choices.

Senate Republican leader Brian Jones, who represents a predominantly Democratic district in San Diego, is proposing to change California’s sanctuary policies to require law enforcement to share information with ICE when a person has been convicted of a serious crime.

“When these violent felons are released from local custody, they go right back into the communities that they came from to re-victimize those same immigrant communities,” Jones said.

But Jones acknowledged the need for nuance when it comes to health privacy.

“Look, the bottom line for me on this immigration reform in America is it needs to be humanitarian and it needs to make sense,” Jones said. “And so, if there are areas that we need to protect folks, it might make sense.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

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California Borrows $3.4 Billion for Medicaid Overrun as Congress Eyes Steep Cuts

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kffhealthnews.org – Christine Mai-Duc – 2025-03-13 15:10:00

California’s Medicaid program has borrowed $3.4 billion from the state’s general fund — and will likely need even more — to cover ballooning health expenses for 15 million residents with low incomes and disabilities.

The state Department of Finance disclosed the loan to lawmakers in a letter late Wednesday, noting funds were needed to make critical payments to health care providers in Medi-Cal, the state’s version of Medicaid. In recent months, Gov. Gavin Newsom’s administration has warned of skyrocketing health care costs, including higher prescription drug prices and increased enrollment by newly eligible seniors and immigrants without legal status.

Finance spokesperson H.D. Palmer said the loan will cover Medi-Cal obligations through the end of the month. He declined to specify the total of the program’s potential shortfall. However, a document circulated by state Senate leaders warns that additional funding may be needed to cover expenses through June 30, the end of the fiscal year.

The cost overrun adds a new layer of difficulty for Democrats who control the legislature and are already grappling with congressional budget plans that could slash Medicaid funding, which accounts for 60% of Medi-Cal’s $174.6 billion budget. President Donald Trump and Republican lawmakers have also criticized California Democrats for covering residents regardless of their immigration status.

Newsom spokesperson Izzy Gardon downplayed the loan. “Rising Medicaid costs are a national challenge, affecting both red and blue states alike,” Gardon said. “This is not unique to California.”

Health officials last year said the state would spend roughly $6.4 billion in the 2024-25 fiscal year to cover immigrants without legal status, which the Democratic governor has hailed as a key step toward his goal of providing “universal coverage” for Californians. In recent testimony, however, finance staff told legislators that health benefits extended to all income-eligible immigrants without legal status are projected to cost roughly $9.5 billion, of which $8.4 billion will come from the general fund.

Republicans called for fresh scrutiny of the state’s decision to cover residents without legal status. “This program is out of control,” Senate Minority Leader Brian Jones posted on the social platform X. “We are demanding a full hearing and a full cost analysis so the public knows exactly where their tax dollars are going.”

Patient advocates objected to Republicans singling out the expansion for immigrants.

“Health care costs are influenced by many factors including prescription drugs, hospital costs, and more,” said Rachel Linn Gish, a spokesperson for Health Access California, a consumer health advocacy group.

According to a fall update from the Department of Health Care Services, Medi-Cal spending grew due to higher-than-expected enrollment of seniors, fewer Californians losing Medi-Cal coverage than anticipated, and increased pharmaceutical spending, as well as expanding coverage of immigrants. For instance, the state is spending $1.1 billion more on residents who were expected to lose coverage after the covid-19 pandemic, and an additional $2.7 billion more than anticipated to cover unauthorized residents.

Assembly Speaker Robert Rivas said he’s committed to maintaining the state’s expansions of Medi-Cal services.

“There are tough choices ahead, and Assembly Democrats will closely examine any proposal from the Governor,” he said in a statement. “But let’s be clear: We will not roll over and leave our immigrants behind.”

Senate leaders said they were looking closely at the state’s estimated costs and caseloads and would recommend cost containment measures as part of their budget proposal in the coming weeks.

Scott Graves, budget director at the California Budget & Policy Center, said it’s not unusual for the state government to make adjustments when spending doesn’t line up with projections.

Last year, for instance, the state borrowed $1.75 billion against its general fund when revenues from a state provider tax were delayed. Prior to that, Department of Finance officials said, California took out a similar loan in 2018 for $830 million.

“The reality is all of these are just estimates, especially with a very complicated program like Medi-Cal,” Graves said, noting that $3.4 billion is roughly 2% of the state’s overall Medi-Cal budget. “It seems like we’re on the verge of making a mountain out of a molehill.”

Mike Genest, who served as finance director under Republican Gov. Arnold Schwarzenegger, agreed that adjustments can be routine. But he said the magnitude of Medi-Cal’s current overrun was not.

“For this to happen in the middle of the year — we’re only in March — I mean, that’s pretty astounding,” Genest said.

California Democrats continue to characterize Trump and congressional Republicans as the biggest threat, pointing to the House budget plan to shrink Medicaid spending by as much as $880 billion. They say cuts of that magnitude would leave millions of residents uninsured, reducing access to preventive care and driving up costlier emergency room services.

They cautioned that some short-term cost increases could be driven by newly eligible residents seeking long-delayed care, which could level off in coming years. However, some acknowledge difficult decisions ahead.

“We definitely have to ensure that those who are our most vulnerable — our kids, those with chronic conditions — continue to have some sort of coverage,” said Democratic Sen. Akilah Weber Pierson, a San Diego County physician. “The question is, what will that look like? To be quite honest with you, at this point, I don’t know.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. 

[Clarification: This article was revised at 5 p.m. ET on March 13, 2025, to clarify projected costs of extending Medi-Cal benefits to immigrants without legal status.]

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Can House Republicans Cut $880 Billion Without Slashing Medicaid? It’s Likely Impossible.

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kffhealthnews.org – Madison Czopek, PolitiFact and Amy Sherman, PolitiFact – 2025-03-13 10:50:00

The prospect of deep Medicaid cuts has become a flashpoint in Congress, with leaders of both parties accusing their counterparts of lying.

House Democratic leader Hakeem Jeffries said Feb. 27 that a Republican budget measure would “set in motion the largest cut to Medicaid in American history,” and that Republicans are hiding the consequences.

“The Republicans are lying to the American people about Medicaid,” Jeffries said. “I can’t say it any other way. Republicans are lying. Prove me wrong.”

Republicans said Democrats were distorting the Republican budget. Rep. Steve Scalise (R-La.) said, “The word ‘Medicaid’ is not even in this bill.” House Speaker Mike Johnson said on CNN that Republicans don’t want to cut Medicaid, “and the Democrats have been lying about it.”

Republicans are looking for massive budget savings to meet their goal of fully extending President Donald Trump’s 2017 tax cuts. This is a separate process from Congress’ need to pass a continuing resolution to keep the government running by March 14 or face a federal government shutdown.

Here’s what we know so far about potential Medicaid cuts.

The House GOP Budget Plan Seeks $880 Billion in Cuts

Medicaid serves about 1 in 5 Americans. The health care program for low-income people is paid for by the federal government and partly by states. Louisiana, home to Johnson and Scalise, has one of the highest state proportions of Medicaid enrollees.

The House Republican budget plan adopted Feb. 25 opens the door to slashing Medicaid, even though it doesn’t name the program. The plan directs the House Energy and Commerce Committee to find ways to cut the deficit by at least $880 billion over the next decade.

The committee has jurisdiction over Medicaid, Medicare, and the Children’s Health Insurance Program, in addition to much smaller programs. CHIP offers low-cost health coverage to children in families that earn too much money to qualify for Medicaid.

Republicans ruled out cuts to Medicare, the health insurance program for seniors that leaders cut at their political peril. Medicare is about 15% of the federal budget, and Medicaid is about 8.6%.

When Medicare is set aside, Medicaid accounts for 93% of the funding under the committee’s jurisdiction, the nonpartisan Congressional Budget Office found in a March 5 analysis. That means it is impossible for the committee to find enough cuts that don’t affect Medicaid.

“It’s a fantasy to imply that federal Medicaid assistance won’t be cut very deeply,” said Allison Orris, an expert on Medicaid policy at the Center on Budget and Policy Priorities, a left-leaning think tank.

After Medicaid, the next-largest program under the committee’s jurisdiction is CHIP. Lawmakers don’t appear to be planning to wipe out CHIP, but even if they did, they would be only a “fraction of the way there,” said Joan Alker, an expert on Medicaid and CHIP at Georgetown University.

If Medicare cuts are off the table, the only way to achieve $880 billion in savings is through big Medicaid cuts, said Larry Levitt, executive vice president for health policy at KFF, the health policy research, polling, and news organization that includes KFF Health News.

Andy Schneider, a professor at Georgetown University who served in the Obama administration as a senior adviser at the Centers for Medicare & Medicaid Services, said even if the committee eliminated all those “other” programs entirely it could achieve only $381 billion in savings — about 43% of the target.

“In short, if they don’t want to cut Medicaid [or CHIP], and they don’t want to cut Medicare, the goal of cutting $880 billion is impossible,” Schneider said.

The $880 billion cut is not a done deal. House Republicans were able to pass their budget package, but Senate Republicans are taking a different approach, without proposing such significant cuts.

Any finalized budget blueprint would need Senate Republicans’ buy-in. Sen. Josh Hawley (R-Mo.) is among Republicans who have spoken against potential cuts; he told HuffPost, “I would not do severe cuts to Medicaid.”

The numbers are starting points that may lead to negotiation among at least Republicans, said Joseph Antos, a health care expert at the conservative American Enterprise Institute. “We are a long way from final legislation, so it’s not possible to predict how much any program will be cut,” he said.

“If the bill also includes extending the [Trump 2017] tax cuts, we are probably months away from seeing real language,” Antos said.

Once the House and Senate have reached an agreement on language and the resolution passes both chambers, the committees will work on detailed cuts. To enact such cuts, both chambers would need to approve a separate bill and receive Trump’s signature.

Why Eliminating Fraud Doesn’t Solve the Problem

Republican leaders have deflected concerns about Medicaid cuts by talking about a different target: Medicaid fraud.

“I’m not going to touch Social Security, Medicare, Medicaid. Now, we’re going to get fraud out of there,” Trump told Fox News’ Maria Bartiromo on March 9, in keeping with his campaign rhetoric that he would protect those programs.

At the same time, Trump on his Truth Social platform praised the House resolution that would make cuts highly likely: “The House Resolution implements my FULL America First Agenda, EVERYTHING, not just parts of it!”

Would eliminating fraud solve the Medicaid problem? No.

On CNN, Johnson said cutting fraud, waste, and abuse would result in “part of the savings to accomplish this mission.” He said the government loses $50 billion a year in Medicaid payments “just in fraud alone.”

Johnson conflated “fraud” with “improper payments.” The Government Accountability Office, the nonpartisan investigative arm that examines the use of public funds, found about $50 billion in improper payments in Medicaid and the same amount in Medicare in fiscal 2023.

Those improper payments were made in an incorrect amount (overpayment or underpayment), should not have been made at all, or had missing or insufficient documentation. But that doesn’t mean that there was $50 billion in Medicaid fraud, which would involve obtaining something through willful misrepresentation.

The system used to identify improper payments is not designed to measure fraud, so we don’t know what percentage of improper payments were losses due to fraud, said Schneider, the former Obama administration health adviser.

Plus, it’s a drop in the overall bucket of the potential $880 billion in cuts.

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