American taxpayers lost between $233 billion to $521 billion to fraudsters just between 2018 and 2022, according to estimates from the Government Accountability Office cited in a new commentary published May 29, 2026, by the Heritage Foundation. Written by Robert E. Moffit, a senior research fellow specializing in Medicare policy, the commentary examines the Trump administration's crackdown on massive fraud in government health programs, with Medicare emerging as a prime target for domestic and international criminal organizations.

The fraud reaches across multiple federal programs, with congressional investigators reporting that COVID-19 fraud in the unemployment insurance program alone hit $191 billion, much of it tied to transnational criminal groups. Medicare itself, a $1.1 trillion program serving seniors and disabled citizens, loses about $60 billion yearly to waste, fraud, and abuse—equivalent to $858 per beneficiary, according to House Ways and Means Committee Chairman Jason Smith. Federal funds passed through state agencies totaled $1.2 trillion in 2025 alone. California and Minnesota are identified as clear hotbeds of fraud. Within Medicare's Durable Medical Equipment program, fraudsters secured over $4 billion in payments for undelivered urinary catheters in one case alone. Medicare Administrator Dr. Mehmet Oz stopped payments to 450 suspicious hospice organizations in California, where Los Angeles County hosts 1,800 hospice organizations—with 89 of them sharing an address in just one building. In California's home health sector, agencies grew from 655 to 1,800 since 2024, with total payments reaching $1.7 billion. In New York, just one doctor billed Medicare $600 million in home health payments between 2020 and 2024, according to Rep. Claudia Tenney.

The report emphasizes that "every dollar lost to fraud is a dollar lost to health and welfare benefits for eligible people," meaning fraudsters directly harm patients dependent on these programs. Chris Deery, a fraud investigator for Independence Blue Cross of Pennsylvania, told the House Ways and Means Committee that "the structure of the fee-for-service Medicare system makes it inherently vulnerable to fraud" because it pays claims upfront and only attempts to recover payments afterward. Shelia Clark, president of the California Hospice and Palliative Care Association, told Congress that "California is the clearest current case study of what happens when oversight weaknesses are exploited at scale," pointing to explosive provider growth, excessive clustering of hospices, and patterns inconsistent with ordinary clinical reality that should have prompted earlier intervention.

Traditional fee-for-service Medicare proves especially vulnerable because fraudsters exploit its payment-first, verify-later model. The General Accounting Office labels it a "complex, high-risk program," noting that fraud schemes often focus on durable medical equipment, with criminals using stolen Medicare beneficiary identifiers to submit fraudulent claims for unneeded or never-provided services. These networks typically establish temporary dummy corporations or shell companies to submit reimbursement requests, utilizing stolen patient identifiers and falsifying medical documentation. The fraud concentrates geographically in South Florida and Southern California. In Medicare's home health program, which pays approximately $16 billion to 10,000 agencies serving 2.8 million beneficiaries, schemes include billing for undelivered services, issuing fake certifications, falsifying medical records, and kickback arrangements. In fiscal year 2015, the Office of Inspector General at Health and Human Services categorized more than half of Medicare spending on the program as "improper payment."

The Trump administration has made the crackdown a top priority, with Vice President JD Vance coordinating efforts across federal agencies and Assistant Attorney General Colin McDonald heading the newly created National Fraud Enforcement Division. The administration has secured $15 billion in taxpayer savings while charging over 300 people with criminal fraud, according to Chairman Smith. In 2025, the Trump administration launched the Fraud Defense Operations Center, giving the Center for Medicare and Medicaid Services analytic tools to identify fraud and halt payments in real time. The agency also created the "Crush" program to tighten vendor eligibility and block questionable operators from Medicare participation. But Moffit warns that without strong bipartisan cooperation from state and local officials, the president's task will be even tougher—and fighting fraud shouldn't be a partisan issue.