Shocking Report Reveals Rampant Welfare Fraud in Arkansas

The Government Accountability Office routinely warns that states’ welfare programs are at high risk for waste, fraud, and abuse. A new report, released Wednesday by Arkansas’ Medicaid task force, brings these warnings to life.

The report highlights four key vulnerabilities in the state’s Medicaid program, a program originally designed to help truly vulnerable Arkansans. But it’s now clearer than ever that tens of thousands of other Arkansans – and even non-Arkansans – are benefiting immensely from the generosity of taxpayers, stealing limited resources from the truly needy.

Tens of thousands of Medicaid enrollees have out-of-state addresses.

According to the report, nearly 43,000 Arkansas Medicaid enrollees have addresses outside of the Natural State. Most of those addresses appear to be from neighboring states, none of which expanded Medicaid through ObamaCare as Arkansas did in 2014.

Rather than becoming a “good jobs magnet” as ObamaCare supporters had promised, the state is quickly turning into a Medicaid magnet – and not just for its neighbors.

In fact, several thousand Medicaid enrollees reside in states as far away as Florida, California, and Michigan. And nearly all of them had out-of-state addresses before they were authorized to receive Medicaid in Arkansas. Worse yet, the report identified 7,000 enrollees who appear to have never lived in the state.

Tens of thousands of enrollees have suspicious identities.

Arkansas isn’t just providing Medicaid to people in other states. It’s also providing welfare to identity thieves.

According to the state’s consultants, tens of thousands of enrollees also have “high-risk identities.” These individuals have identities that have been linked to multiple people, have Social Security numbers that are not found anywhere else in public records, and even have SSNs that were issued by the federal government before the enrollee was ever born.

Hundreds of enrollees died before they were ever authorized to receive Medicaid.

Arkansas is also granting Medicaid benefits to hundreds of enrollees who, according to public records, are already dead. More than half of these deceased enrollees actually died more than two years before signing up for Medicaid.

It’s not as if these individuals were enrolled in Medicaid, but later died and were never removed from the program. These individuals didn’t even sign up until two or more years after they died. That means either there are hundreds of zombies enrolling in Medicaid or fraudsters are deliberately assuming their identities in order to scam the system.

Thousands of enrollees have property values over $100,000.

The initial audit identified more than 12,000 enrollees who owned property worth more than $100,000. Although possessing property is not itself an indication of fraud, it can often serve as a warning sign that enrollees with significant assets have more income than they have reported.

This warning sign is especially important for recent purchases, which could indicate a recent change in income. The auditors singled out two enrollees in particular who had recently purchased expensive properties in Florida and New Jersey, worth $419,000 and $750,000 respectively.

Every dollar spent on ineligible enrollees is a dollar stolen from the truly needy.

Welfare fraud doesn’t just waste taxpayers’ hard-earned money. It also steals limited resources from truly needy patients. It steals resources from children likeChloe Jones, a young Arkansan who’s been forced to engage in years of costly litigation, fighting for her right to life-saving medication that the state denied her in order to save money. Meanwhile, taxpayers are footing the bill for folks who are buying luxury homes in Florida and New Jersey? It’s almost too much to believe.

There are thousands of people just like Chloe who are depending on these programs to survive. There are thousands more on waiting lists for needed services. Every dollar spent on the fraudster is a dollar that can’t be spent helping these truly needy Americans.

Thankfully, states can curb this epidemic. Enhanced screening at the front door, coupled with periodic checkups and prosecution of those found to be defrauding taxpayers, can greatly reduce the type of fraud Arkansas is currently uncovering. These reforms have witnessed broad, bipartisan support from Illinois to Pennsylvania to Massachusetts. And they’ve produced tremendous results.

In the end, states that pursue these types of reforms will save taxpayer dollars, and that’s critical. But more importantly, resources will be freed up for people like Chloe. Isn’t that something we can all support?

This story originally appeared at on October 7, 2015.


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