Taxpayer Betrayal: $200M Lost in Medicaid Payments to the Dead

Paul Riverbank, 12/24/2025Medicaid lost $200M to the deceased—can new audit laws finally protect taxpayers and fix coverage gaps?

It isn’t a new glitch, either. Aner Sanchez, a veteran auditor within the Department of Health and Human Services, has spent the better part of a decade trying to flag and fix the problem. “Improper payments like these aren’t limited to just one corner of the map,” she explained, “they crop up almost everywhere.”

The roots of the issue run deep. Part of the difficulty is bureaucratic—the government’s master list of deaths, which goes back to 1899 and now contains more than 142 million records, has long been sheltered by privacy protections that make cross-checking arduous and slow. State Medicaid rolls often lag months behind, unable to keep pace with changes or verify deaths in real time. So, payments keep flowing, not to grieving families, but to insurance firms for individuals they can no longer possibly serve.

There is reason to believe things might improve. This year brought new legislation: states will soon have to audit their Medicaid rolls quarterly, using the federal “Death Master File” as a touchstone. Officials hope that, by 2027, the loophole will close. There’s already precedent—when the Treasury conducted a targeted test run, matching outgoing checks to the death file, the government clawed back over $31 million in a matter of months.

But Medicaid’s complications don’t stop with paperwork. Mark Cuban, usually known for his sports franchise and business ventures, took to social media with a pointed question. If some of America’s biggest employers provide such low wages that full-time staff qualify for public programs like Medicaid, aren’t taxpayers ultimately subsidizing those companies’ profits? He didn’t call for sweeping reforms but hinted at his own response: “If I knew which companies benefit most from public assistance for their workers, I’d reconsider where I spend my own money. That’s the kind of capitalism I believe in.”

Cuban never singled out corporations by name, but the evidence isn’t hard to find. Federal data repeatedly shows a pattern: large retail and fast-food chains with enormous footprints often have thousands of workers relying on Medicaid and other aid, despite being employed full-time.

All of this unfolds against a wider backdrop—one where healthcare costs have become a source of anxiety for millions. A young boy in Texas faced a $1,400 bill for a round of vaccines. A woman in Pennsylvania opened her mailbox to find a $14,000 charge for birth control. In Florida, a Medicaid recipient recovering from a heart attack confronted a hospital invoice that soared to $78,000. For many, confusion over what’s covered, whether insurance applies, or who to call in a dispute, is as stressful as the illness itself.

Navigating this patchwork isn’t for the faint of heart. Experts suggest: ask questions before treatment; double-check that coverage is current, especially after a job change; don’t take “it’s covered” for granted—ask for estimates ahead of time, and, in some cases, don’t hesitate to negotiate. Even insured patients can sometimes push back on large bills, and Medicaid recipients should not shy away from flagging errors with their state program. In a pinch, a call to a local legislator isn’t out of bounds, either.

Peel back the indignities of mistaken payments and the frustration of workers turning to public aid while companies profit, and you reach the core problem: American healthcare is just plain complicated. It’s expensive and, too often, seems unfair to the people it’s meant to help. Still, there are glimmers of hope—concrete steps like the new audit law, loud calls for corporate transparency, and a growing recognition that staying informed is half the battle. If nothing else, perhaps these incremental changes can help chip away at the confusion, and, over time, build a safety net that truly catches those who need it most.

Medicaid is supposed to be one of society’s safety nets, a program that steps in for Americans who are most in need of care. Yet, a troubling issue has been lurking beneath the surface for years. This past spring, federal investigators found that states paid out more than $200 million over just two years to managed care organizations—on behalf of patients who were no longer alive.It isn’t a new glitch, either. Aner Sanchez, a veteran auditor within the Department of Health and Human Services, has spent the better part of a decade trying to flag and fix the problem. “Improper payments like these aren’t limited to just one corner of the map,” she explained, “they crop up almost everywhere.”The roots of the issue run deep. Part of the difficulty is bureaucratic—the government’s master list of deaths, which goes back to 1899 and now contains more than 142 million records, has long been sheltered by privacy protections that make cross-checking arduous and slow. State Medicaid rolls often lag months behind, unable to keep pace with changes or verify deaths in real time. So, payments keep flowing, not to grieving families, but to insurance firms for individuals they can no longer possibly serve.There is reason to believe things might improve. This year brought new legislation: states will soon have to audit their Medicaid rolls quarterly, using the federal “Death Master File” as a touchstone. Officials hope that, by 2027, the loophole will close. There’s already precedent—when the Treasury conducted a targeted test run, matching outgoing checks to the death file, the government clawed back over $31 million in a matter of months.But Medicaid’s complications don’t stop with paperwork. Mark Cuban, usually known for his sports franchise and business ventures, took to social media with a pointed question. If some of America’s biggest employers provide such low wages that full-time staff qualify for public programs like Medicaid, aren’t taxpayers ultimately subsidizing those companies’ profits? He didn’t call for sweeping reforms but hinted at his own response: “If I knew which companies benefit most from public assistance for their workers, I’d reconsider where I spend my own money. That’s the kind of capitalism I believe in.”Cuban never singled out corporations by name, but the evidence isn’t hard to find. Federal data repeatedly shows a pattern: large retail and fast-food chains with enormous footprints often have thousands of workers relying on Medicaid and other aid, despite being employed full-time.All of this unfolds against a wider backdrop—one where healthcare costs have become a source of anxiety for millions. A young boy in Texas faced a $1,400 bill for a round of vaccines. A woman in Pennsylvania opened her mailbox to find a $14,000 charge for birth control. In Florida, a Medicaid recipient recovering from a heart attack confronted a hospital invoice that soared to $78,000. For many, confusion over what’s covered, whether insurance applies, or who to call in a dispute, is as stressful as the illness itself.Navigating this patchwork isn’t for the faint of heart. Experts suggest: ask questions before treatment; double-check that coverage is current, especially after a job change; don’t take “it’s covered” for granted—ask for estimates ahead of time, and, in some cases, don’t hesitate to negotiate. Even insured patients can sometimes push back on large bills, and Medicaid recipients should not shy away from flagging errors with their state program. In a pinch, a call to a local legislator isn’t out of bounds, either.Peel back the indignities of mistaken payments and the frustration of workers turning to public aid while companies profit, and you reach the core problem: American healthcare is just plain complicated. It’s expensive and, too often, seems unfair to the people it’s meant to help. Still, there are glimmers of hope—concrete steps like the new audit law, loud calls for corporate transparency, and a growing recognition that staying informed is half the battle. If nothing else, perhaps these incremental changes can help chip away at the confusion, and, over time, build a safety net that truly catches those who need it most.