Report: Drug Addiction, Overdoses and Fraud Increases in Medicaid Expansion States

by Kimberly Morin


Today, organizations that make money as drug abuse treatment centers held a breakfast for legislators to urge them to continue supporting Obamacare’s Medicaid Expansion. These organizations directly benefit from taxpayer dollars because they rely on them in order to keep their doors open.

In fact, John Burns, Director of SOS Recovery, admitted that his organization will not stay in business if taxpayers don’t keep funding health insurance for able-bodied, childless adults who can work:

A recent report released by Senator Ron Johnson (R-WI) shows those states that put Obamacare’s Medicaid Expansion into place have seen an increase in drug addiction and drug overdose deaths. The report also highlights increases in fraud:

Medicaid has contributed to the nation’s opioid epidemic by establishing a series of incentives that make it enormously profitable to abuse and sell dangerous drugs.

At least 1,072 people have been convicted or charged nationwide since 2010 for improperly using Medicaid to obtain prescription opioids, some of which were then resold on the nation’s streets. The number of criminal defendants increased 18 percent in the four years after Medicaid expanded, 2014-2017, compared to the four years prior to Medicaid expansion.

The criminal activities range from beneficiaries simply selling opioids they obtained through the Medicaid program to more attenuated health care fraud involving Medicaid reimbursement.

The cases reflect massive frauds and bizarre twists, from a $1 billion scheme to defraud Medicaid and Medicare involving numerous health care providers, to a New York doctor and oxycodone distributor who blamed her actions on an alternative personality named “Nala.”

Prosecutors are increasingly targeting suboxone—a drug that treats opioid addiction but itself can be addictive—meaning that the epidemic has reached the point where people are defrauding Medicaid using the very drugs designed to help the victims.

The case numbers are a conservative estimate, because evidence shows crime is under-reported; health care fraud in particular is rarely detected, including by government agencies; most health care fraud investigations never lead to prosecutions; and Medicaid anti-fraud efforts have fallen short.

More than 80 percent of the 298 separate Medicaid-opioids cases identified were filed in Medicaid expansion states, led by New York, Michigan, Louisiana, New Jersey, and Ohio. The number of criminal cases increased 55 percent in the first four years after Medicaid expansion, from 2014 to 2017, compared to the four-year period before expansion.

Other preliminary data suggests a connection between Medicaid expansion and opioid abuse. Drug overdose deaths per one million people are rising nearly twice as fast in expansion states as non-expansion states, while opioid-related hospital stays paid for by Medicaid massively spiked after expansion.

Medicaid spending to treat victims is escalating, especially in expansion states. Spending on a single opioid overdose medication, for example, increased an astonishing 90,205 percent between 2011 and 2016, with costs rising “most notably after 2014.”

Other federal programs are also being exploited to obtain or sell opioids.  In preliminary research, majority staff found 243 instances in recent years of opioid-related Medicare fraud.  In November 2017 alone, the Department of Veterans Affairs had 60 ongoing criminal investigations concerning diversion of opioids.   Majority staff also found instances of opioid-related fraud in the food stamp program involving dangerous drugs such as oxycodone, vicodin, hydrocodone, and morphine.

These findings should be a warning for legislators who are intent on continuing Obamacare’s Medicaid Expansion in New Hampshire. Not only is the program unaffordable for the state but there are obvious ramifications to continuing it.

Traditional Medicaid helps those who are truly in need of healthcare services. Obamacare’s Medicaid Expansion was intentionally put into place to create more dependents on taxpayers – those who are able-bodied and can work. The dollars of federal money alone that were spent to insure 51,000 people in New Hampshire was over $405 million in 2016 alone.  The program has been proven to be more costly than originally thought:

On Monday, the Insurance Department released a report it commissioned on what it cost insurers to cover claims for program participants last year. On average, health care costs for Medicaid recipients were 39 percent higher than costs for others in the individual market after adjusting for age and other factors, and if the program didn’t exist total claim costs in the individual market would be 14 percent lower.

Legislators promised to “sunset” Medicaid Expansion when the federal tax dollars dipped below 100%. They lied. They then used a “shell game” to pretend like hospitals would be paying the difference but the federal government didn’t approve of that scam. Legislators have been given an “ultimatum” by the feds to fix the issues:

Federal officials have warned New Hampshire that the funding structure underlying the state’s Medicaid expansion plan might be invalid — and they’re giving state officials until the end of next year to fix it, or risk losing future federal funding for the program.

The federal government is raising concerns over New Hampshire’s use of “donations” from hospitals and insurers to cover the state’s share of the costs of Medicaid expansion.

The end result, if Medicaid Expansion is once again reauthorized, appears to be more drug addicts, more drug overdose deaths, more Medicaid fraud and an income or sales tax for Granite Staters to pay for all of that. It doesn’t exactly leave you with a warm and fuzzy feeling does it?

Leave a Comment

  • Ed Naile

    So as the spending goes up the problems associated with drugs go down?
    Or are we just feeding the drug treatment industry?

    • Kimberly Kma Morin

      Spending goes up, drug addiction goes up, drug treatment centers go up. NO ONE is slowing down anything other than being actually productive with taxpayer $$.

      • Ed Naile

        I am 65 and have seen my share of drug problems “solved” by government programs.
        I worked with a heroin addict for a month. He used twice a day. In that month I saw how this story goes – everyone gets ruined no matter how you look at it. And government is the least likely to fix it.
        I have come to the conclusion that drug every crisis burns like a match. It goes out on its own when the fuel and oxygen is gone.
        When people involved have had enough – they move on.
        You can try all the expensive programs you want and if doing heroin or crack is “the thing” in a city or area, the “crisis” begins its own retreat.
        Save people you care about by any means possible but don’t count on a government program.

  • Gosh, let’s have a look at the history of the residential Alcohol/drug “recovery” industry, JUST in NH.
    Rent seekers
    Bootleggers and Baptists
    Some are good, at a “success rate” up to 8-9%. Some are fairly overt in their “awareness, tax funding, data gathering,referral, “important” meeting attendance, motives.
    Tip: When you start to see the six figure “salaries”, shiny tasseled loafers, and expense accounts listing “professional gathering at exotic location”, ….
    Impressive real estate holdings, VERY comfortable cars, “the latest” behavioral Science software, and closets full of “outdated” fad marketing tools are a hint as well.
    Private open duration sanitarium holding areas, with astonishing menus, well appointed accommodations, propitiatory occupational “therapy” materials and literature, ….cash only, are another subject entirely.

Previous post:

Next post: