Republicans are searching for ways to eliminate “fraud, waste, and abuse” in Medicaid, the federal-state entitlement created to provide health coverage for low-income, pregnant, homeless, and disabled people.

It’s long past time. According to a new report from the Paragon Health Institute’s Brian Blase and the Economic Policy Innovation Center’s Rachel Greszler, Medicaid doled out roughly $1.1 trillion in improper payments over the past decade — double the official estimate from the Centers for Medicare and Medicaid Services. 

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Only structural reforms will fix Medicaid over the long haul. But in the short term, cracking down on improper payments could save the federal government hundreds of billions and help preserve the entitlement for those who need it most.

States run their own Medicaid programs using state and federal dollars. The federal government pays between 50% and 77% of the cost of coverage for legacy enrollees and 90% of those who became eligible under Obamacare’s expansion of the program. Each year, the federal government audits one-third of state records to ensure benefits are properly distributed. Those audits revealed $543 billion in improper payments between 2015 and 2024, according to government data. 

But Blase and Greszler argue the true improper payment amount was twice as high. That’s because the Obama and Biden administrations failed to conduct their audits properly. In fact, their administrations “did not even check if the individuals that states enrolled in Medicaid — and on whose behalf payments were made — were even eligible for Medicaid.” 

As a result, their audits yielded suspiciously low improper payment rates. In 2016, under President Obama, Medicaid’s improper payment rate was only 11%. Under President Biden, Medicaid reported even lower rates — 8.58% in 2023 and just 5.09% last year. 

But the Trump administration dug up higher improper payment rates after conducting complete audits — including eligibility reviews – in 2019 and 2020. “In those cycles,” Blase and Greszler write, “the improper payment rates among the states CMS measured were 26.2% and 27.5%, respectively.” 

In other words, both times the federal government correctly audited state Medicaid programs, states were spending one in four dollars improperly.

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Blase and Greszler use this data to estimate the likely improper payment rates under Obama and Biden. “Applying a 25 percent improper payment rate across the $4.3 trillion of federal Medicaid spending between 2015 and 2024 yields roughly $1.1 trillion in federal Medicaid improper payments over the past decade,” they write.

House Republicans are currently hunting for $880 billion in savings over the next 10 years, mostly likely from Medicaid. Simply policing improper payments could yield much of those savings.

Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It (Encounter 2025). Follow her on X @sallypipes.