Medicaid Paid Out Over $400 Million for Dead People in ONE Year Under Joe Biden

A fresh audit from the Department of Health and Human Services’ Office of Inspector General exposes yet another layer of mismanagement in the Medicaid system. Between July 2021 and June 2022, states handed over $408.5 million in capitation payments to managed care organizations for enrollees who had already passed away. That’s taxpayer money flowing to insurers for “covering” people no longer among the living, with federal funds accounting for $263.3 million of the total.

The inspectors zeroed in on a sample of 100 such payments, finding 99 of them improper. States had clawed back only 50 before the review, leaving an estimated $207.5 million unrecovered nationwide—$138.6 million from the federal share alone.

“We found that Medicaid agencies made unallowable capitation payments after enrollees’ deaths for 99 of the 100 sample capitation payments,” the report states. “However, for 50 of those unallowable capitation payments, we found that Medicaid agencies recovered the overpayments before we provided them with the sample capitation payments for their review.”

Similar audits stretching back to 2016 have uncovered $289 million in such payments across various states, according to the HHS inspector general’s cumulative findings. A 2023 review of 14 states revealed $249 million doled out from 2009 to 2019 for deceased beneficiaries, with some payments continuing for years after death. Michigan alone wasted $39.9 million, while New York topped the list at $70.9 million, per a November 2025 analysis by the Foundation for Government Accountability.

Certain states prove it’s avoidable. Connecticut, Maine, Mississippi, Nebraska, South Dakota, and Wyoming reported zero such payments in the period, thanks to basic safeguards like routine death record checks. Yet 35 other states let the dollars slip away, pointing to a systemic failure in oversight. Insurers pocket monthly fees without question, while bureaucrats drag their feet on updates.

The problem echoes broader waste in federal programs. The Government Accountability Office pegged Medicaid’s improper payments at $31.1 billion for fiscal year 2024—about 5% of total spending. Across the government, improper payments hit $162 billion that year, concentrated in health care, unemployment, and tax credits. Dead recipients are just one symptom; duplicate enrollments across states added $1.6 billion in potential overpayments in six states alone, per a GAO report from November 2025.

A provision in last year’s reconciliation bill offers a potential fix, mandating quarterly consultations with the Social Security Death Master File starting in January 2027. This common-sense step could stem the flow, but it raises questions about why it took federal intervention to force states into action. For years, some have ignored available tools, allowing funds meant for the needy to vanish into bureaucratic black holes.

Critics see this as emblematic of a welfare system bloated by entrenched interests. Managed care firms thrive on capitation models that reward inertia over accountability, collecting premiums long after beneficiaries are gone. In Colorado, a 2025 state audit found $7.3 million paid for dead Medicaid members, prompting calls for tighter controls like those in the new Medicare and Medicaid Fraud Prevention Act introduced by Rep. Gabe Evans.

With reforms on the horizon, there’s hope for plugging these gaps. But real change requires vigilance beyond reports—holding agencies and contractors responsible, and ensuring programs serve the living without lining pockets at public expense.