Why can't we have nice things like decent health insurance? The Minnesota Medicaid fraud scandal is so large, so all-encompassing, that believing it's a question of keeping Somali immigrants out of the country misses the point by a mile.
If it hadn't been Somalis, it would have been someone else. The reason is that the money was there for the stealing. The state was encouraging theft by creating incredibly stupid, lax policies that any halfwit with a calculator could figure out and exploit. Foreigners happened to be first in line, but good old-fashioned white Americans are taking advantage of government-run health insurance programs to the tune of tens of billions of dollars.
"Assistant U.S. Attorney Joe Thompson revealed in an indictment that since 2018, at least half of the roughly $18 billion in federal funds meant to support a collection of state-run programs had been used fraudulently," reports Reason.com.
"The magnitude cannot be overstated," Thompson said in December. "What we see in Minnesota is not a handful of bad actors committing crimes. It's staggering, industrial-scale fraud." And it happened on [Gov. Tim] Walz's watch."
Nine billion dollars. One state. One government health insurance program.
Donald Trump decided to make the fraud issue one of ethnicity. Indeed, 78 of the 86 individuals so far charged in the scheme were of Somali ancestry.
But that's an incredibly shallow way to approach the problem. Individuals have no problem stealing tens or hundreds of thousands of dollars. Organized fraudsters can steal millions. Overseas organized crime outfits can steal billions.
Why doesn't the government care?
The government agencies charged with administering these programs are trapped by congressional mandates to make the programs easily accessible for as many people who are eligible as possible. At the same time, those same agencies are charged with caring for the taxpayer's purse.
Guess which side wins out?
Shortly before the scandal began to make national headlines, the Government Accountability Office (GAO) released a report on fraud in the Affordable Care Act, otherwise known as Obamacare. The report focused on the program's "premium tax credit," essentially a federal subsidy for buying heavily regulated health insurance through government-run online marketplaces. For 2024 and 2025, GAO investigators created fictitious accounts and used them to apply for the tax credit. Of the 24 fake accounts created, 22 were approved for and received subsidies, costing the government more than $10,000 a month.
That figure is just a fraction of the true scale of the likely fraud the GAO report estimates in the program: The report found $21 billion in "unreconciled" premium tax credits. Not all of that amount is certain to be fraudulent, but given the ease of fraud, much of it likely is.
The GAO report found that "fraud risks have persisted since we first reported on this" in 2014. Given the incredible laxness of oversight, it's more than likely that the problem has gotten worse by orders of magnitude.
Notably, the subsidies were the subject of 2025's most heated health care debate—a government shutdown in which Democrats demanded that a temporary expansion of the subsidies put in place during the pandemic be made permanent. As House Budget Committee Chairman Jodey Arrington (R–Texas) remarked, the report "exposed the rampant fraud plaguing Democrats' expanded Obamacare subsidies, which have effectively no eligibility checks, anti-fraud controls, or other basic program integrity measures in place, resulting in billions of wasted tax dollars and increased health care costs."
While Democrats weep for all the families without health insurance because of the meany Republicans who want to get a handle on the runaway fraud, gangs of fraudsters here and abroad lick their chops and enrich themselves and their organizations by taking advantage of the government's inability to reconcile granting ease of access to programs for those in need with the constitutional requirement to be good stewards of the public purse.
There has got to be a better system for delivering services to people who need them without losing 25%-50% to fraud. Until Congress gets serious about the fraud problem, we'll continue to bleed tax dollars, transferring huge amounts to criminals and fraudsters.
