$250 million wasted to pay twice for 50,000 Minnesotans’ Medicaid

The Centers for Medicare and Medicaid Services (CMS) recently completed a study of 2024 enrollment data and found $14 billion wasted on Medicaid enrollees who were already covered by another public plan. 2.8 million Americans are enrolled in the Children’s Health Insurance Program (CHIP) in multiple states or simultaneously enrolled in both Medicaid/CHIP and a subsidized Affordable Care Act (ACA) Exchange plan.

Just looking at population, this would equate to about $250 million/year in Minnesota. But of course, Minnesota is anything but average when it comes to wasting Medicaid money. We spend about twice as much as the average state on Medicaid and we require almost no eligibility checking from the insurance companies who actually collect the money for Medicaid. That $250 million does not include folks who were put on more than one Medicaid plan, or those who are lying about eligibility.

A 2024 study from American Experiment found that 70% of the people who were added to Medicaid between 2019-2022 did not know they were on Medicaid. The study concluded, “it is possible billions of state and federal dollars were spent on paying Medicaid MCO premiums to private companies for people who did not need or use the coverage.” The study concluded that in 2022, nearly one-in-five Medicaid enrollees did not know they had Medicaid.

Minnesota legislators took aim at this problem this year by requiring that the managed care organizations (MCOs) that cover the care of Medicaid patients do a basic check of recipients to see that they are still alive, want Medicaid and live in the state. Rep. Jeff Backer, Sen. Steve. Drazkowski and Sen. Paul Utke introduced legislation aimed at curbing improper payments for Medicaid.

Nicknamed “I’m not a robot” the legislation simply asks the insurance companies to find the enrollee and get a minimal amount of information to prevent tax dollars going to pay for people who live out of state, already have insurance or are dead.

None of the GOP “I’m not a robot” bills made it past Gov. Walz. That lack of oversight has cost the state $150 million in fines in 2019 alone. Now federal requirements within the “Big Beautiful Bill” could make the state enact portions of “I’m not a robot” to continue to receive federal money.

Right now, Minnesotans can be enrolled in Medicaid without a social security number or an address.  Moreover, they do not have to live in the state for any period of time to be eligible, they merely may intend to reside here. Because the taxpayer pays the bill, and a bill never goes to the enrollee, it makes it easy for a person to be enrolled in more than one program without even knowing it.

“This is exactly why we fought for stronger tools in the One Big Beautiful Bill Act” said CMS Administrator Mehmet Oz, “to go after this type of waste and finally put a stop to paying twice for the same person’s health coverage.”

For additional information on this topic, please see American Experiment’s report What the Medicaid Undercount Reveals About the Medicaid ‘Unwinding’ (https://files.americanexperiment.org/wp-content/uploads/2024/05/Medicaid-Undercount-2024.pdf?v=1716563615&_gl=1135538x_gcl_au*MTYwODg0MjM0My4xNzUzMjE2Mjgz).