Just before the August congressional break, I was asked to testify before a forum on Medicare fraud that was chaired by Sen. Mel Martinez (R-Fla.) and Sen. John Cornyn (R-Texas).  Sen. Martinez introduced S. 3164, the Seniors and Taxpayers Obligation Protection Act (STOP) of 2008, a bill that does several things to address the continuing problem of out-of-control fraud in the Medicare program.

In the testimony, I addressed two of the several reform measures in the legislation: having the Department of Health and Human Services (HHS) replace the Social Security number as the Medicare identifier with another number, and developing a tracking system that would help trace where and to whom medical equipment is dispersed and if the supplier is legitimate before they receive payment from Medicare.

There have been a series of articles written about identity theft and DME fraud in the Medicare program that are enough to make your hair curl.  A June 22 New York Times story by Robert Pear pointed out that officials at the Social Security Administration are concerned about identity theft and have called for all Social Security numbers to be removed from Medicare cards.  After all, how many times have we been told not to carry our Social Security number in our wallets?  Yet, Medicare recipients are asked to carry their Medicare card at all times, which contain their Social Security numbers.  HHS is resisting the proposed change, claiming it will cost too much, but other agencies such as the Veterans Administration and the Department of Defense are dropping or have dropped Social Security numbers from their health cards.

During August, reporter Jay Weaver of the Miami Herald ran a series of disturbing articles on the rampant Medicare fraud in south Florida.  Two areas where corruption is extensive: false claims for HIV-drug infusion and the distribution of medical supplies, such as wheel chairs and oxygen equipment, which amount to at least $2.5 billion a year in fraudulent claims in the south Florida area alone.

According to the Congressional Budget Office, Medicare is expected to cover an estimated 44.6 million beneficiaries at a total cost of $456 billion in fiscal 2008.  That amounts to taxpayers paying more than $1 billion a day just on Medicare, never mind the other entitlements such as Social Security and Medicaid.  So, while CAGW agrees with Sen. Martinez’s proposal to protect Medicare and make sure tax dollars are wisely spent, I emphasized the fact that unless Medicare is fundamentally restructured and reformed, much of what they have proposed will only serve as a temporary band-aid to saving tax dollars.

The nation is on an unsustainable trajectory of increased government spending.  Entitlements costs threaten our ability to maintain our high standard of living or compete successfully in the world.  If entitlements are not addressed, our children and grandchildren will be left with a crushing economic burden and unlike prior generations, they will be worse off then their parents.