Medicare

Where Does Our Federal Spending Go?

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I’m pretty well done with sifting through Federal Spending, Tax Revenue, and all that fun stuff, but I do have one more thing I’d like to share. Trust me, it will be fun (it’s full of numbers) and I’m trying to delve into how the Federal Government spends money. This seems particularly relevant when we’ve heard so much talk of how we need to cut Federal Spending (and where it should be cut) ever since Elon Musk and his team of grifters at DOGE got involved. Even as the net result of the 2025 Congressional Budget Bill is to increase Federal Spending while cutting down on Federal Revenue. It’s like Ronald Reagan and Alan Greenspan never left us, or they’re still with us in Spirit.

Personally, I think that means we need an Exorcism post haste.

This additional deep dive into Federal Revenue and Spending came about, partially in response to someone on Threads who insisted (despite all evidence to the contrary) that Donor States were still a drain on the Economy because many of them received more in Federal Funds than less populated States that couldn’t hope to contribute as much.

He clearly didn’t comprehend that words have agreed-upon meanings. No matter how much he wished it, he couldn’t arbitrarily change those definitions (not without some sort of consensus involved). It’s disingenuous at best to accuse Donor States of being a drain, when they are contributing more than they are taking. It really doesn’t matter that these states might be receiving more than others (that take more than they contribute). I continued that discussion far longer than I should have, when I simply needed to point out that he was wrong from the beginning, and wasn’t getting any less wrong the more he tried to argue his point.

That’s the problem with the way many people look at things today. They think that their sense of what is correct holds the same value as the reality of the thing, whatever that thing might be. Just because something doesn’t feel right, because it doesn’t correspond with one’s worldview, is not the same as something not being right or accurate. Some people (mostly men, it seems) think everything is up for debate and interpretation, but that simply isn’t how reality works. We don’t get to negotiate with reality the way we do with one another. One’s level of confidence in their being correct does not influence whether they are (even if it makes them seem like they must be), but there’s no convincing some people of that.

This is why, not so long ago, when more than a thousand people were polled, 12% of Men responded that they believed they could score a single point on Serena Williams in Tennis. Of course: 17% of Men also believed they could beat a Chimpanzee in a fight, 8% were confident they could defeat a Gorilla, and 6% suggested they could successfully fight a Bear. Keep in mind that these men are unarmed and the animals are neither infants nor infirm. So, there’s clearly no accounting for human stupidity, or the confidence that goes with it.

But, back to the topic at hand.

In 2023, the Donor States (those that paid out more in Federal Revenue than they received back) produced a combined surplus of $619 Billion. That was such a great surplus in Total Revenue that it offset the total amount consumed by states that received more than they paid out, with more than $105.1 Billion left to spare.

Fully 88% of that Federal Revenue came from Income and Individual Taxes (this includes Social Security and Medicare), with the remaining 10% coming from Business Taxes, Estate Taxes, and so on.

The Federal Government spent a grand total of just below $6.2 Trillion that year (which is more than the total Federal Revenue), which means Donor States provided roughly 10% of the total amount of Federal Spending in just the surplus between what they paid out vs. what they received back from that $6.2 Trillion.

It’s worth referring back to my earlier discussion of Sanctuary States to point out that 11 of the states classified as Sanctuary States, when broken down by Per Capita Revenue, generated more than they received that year. When looking solely at total amount of outgoing versus incoming Revenue at the State Level, it was seven Sanctuary States operating in the black. When we adjust our focus, in terms of total population, we’re looking at 11 Sanctuary States that paid in more than they cost the Federal Government per person. I keep bringing that up because it’s imperative to hammer in the point that people should stop trying to use Sanctuary States as a budgetary talking point as if they’re a drain on the economy. After all, the reality is quite the opposite.

It’s a simple thing to ignore context and simply accept that the Federal Government distributed a grand total of $4.56 Billion back to the various states and their residents. That’s still less than was obtained in Federal Revenue, by a little over $100 Billion. This isn’t entirely painting an accurate portrait, suggesting that the money actually went to the states. Defense Spending is included in this, which was disproportionately redistributed to wherever the largest military bases, contractors, and manufacturing facilities were located. Strangely enough, unlike the U.S. Postal Service, no one seems to expect the U.S. Armed Forces to turn over a profit, even though the U.S. Postal Service doesn’t receive direct Taxpayer funding.

So, to really dig into where Federal Spending is directed, we’re going to have to spend a little more time breaking things down. It doesn’t sound like much fun, but at least I’ll save you the time and effort of doing the math.

Only $2.4 Trillion of the total $6.2 Trillion in Federal Spending returned to the States for purposes of Medicaid, SNAP (Food Stamps), Social Security, Veterans Benefits, Transportation, and Education. That leaves $3.8 Trillion in spending left unaddressed. It’s worth noting that a large portion of the money spent through Medicaid, as well as some of what was spent on Veterans Benefits, went directly to Insurance Companies. In fact, according to the Congressional Budget Office, Federal Subsidies for Insurance Companies in 2023 totaled an estimated $1.8 Trillion (which included Medicaid, Medicare, CHIP, Affordable Care Act Marketplace Subsidies, and more). Referring to that as money that went to residents of the states in question seems disingenuous to me, but we’ll let it stand.

$658.8 Billion went toward payment of Interest on the National Debt (which totaled $34.7 Trillion as of last June), which is 17% of the previously unaccounted for $3.8 Trillion…leaving us with roughly $3.2 Trillion to track down.

Excluding Active Duty Military salaries, the Federal Government spent roughly $336 Billion on payroll for Federal Workers, which translates into approximately 10.5% of the remaining $3.2 Trillion, leaving $2.9 Trillion that we’ve not accounted for.

Foreign Aid seems to be a sticking point for several people lately, as they complain about how the money could (or should) be spent here at home. The reality is that Foreign Aid is a drop in the bucket. In 2023, Foreign Aid added up to a total of $71.9 Billion (which is less than the $74 Billion spent in 2022). I should note that this amount does not factor in sales of arms or transfers of military equipment; mostly because we typically sell materials and equipment without taking a loss. Even this exceptionally small number, compared to our total Federal Spending, turns out to be a grand total of 1.2% of that amount. Data from the United Nations indicates the U.S. still contributes 40% of all International Humanitarian Aid. That’s something we should be proud of. $14.4 Billion of that went to Ukraine in the form of direct monetary support, which (as I’m sure you notice) is not much at all when compared to total Federal Spending. It’s even appreciably less than the $15.6 Billion that went toward Foreign Disaster Relief and other Humanitarian purposes. Even though the current war in Gaza didn’t begin until October 7th of that year, we spent $3.3 Billion on Foreign Aid to Israel.

But, we still have essentially $2.9 Trillion to account for, so let’s keep going.

Defense Spending totaled $820.3 Billion that year. This amount shouldn’t be surprising, since we spent more than twice as much as the other 30 NATO Nations combined between 2014 and 2022. More than a quarter of that Spending went to the Air Force, and only slightly less went towards the Navy. Army and Marine Corps Spending combined to make up roughly another quarter of that total. This is where Active Duty Military salaries factor into the spending.

We now have just a little bit less than $2.1 Trillion to account for.

The $52 Billion we spent on Small Business Loans hardly makes a dent.

Of the $970 Billion in Discretionary Spending that wasn’t Defense-Related, only a portion of it hasn’t already been accounted for in the previous Spending that went back to the individual States. $83 Billion of that was spent on International Affairs, $74 Billion went toward Administration of Justice, $48 Billion to Natural Resources and Environmental Spending, while $40 Billion was dedicated to Science, Space, and Technology. Adding those totals to what was spent on Small Business Loans, we’re only looking at $1.9 Trillion left to go.

Only $31 Billion went toward Pell Grants for the roughly 6.5 Million college students who received them that year, so that hardly registers.

And unfortunately, it only gets more challenging to trace the money at that point.

Tax Refunds for Earned Income Credits, the Federal portion of Unemployment Compensation, and other dispersals factor into the same Mandatory Spending category as SNAP funding, which totals $448 Billion. But some of that has already been accounted for in the money we discussed being distributed to the States. Unfortunately, it’s exceedingly difficult to sift through itemized spending to discern just how much we’ve already considered in our breakdown of Federal Spending.

There’s also $502 Billion that was distributed between Federal Civilian and Military Retirement Benefits, some additional Veterans’ Benefits, and offsetting costs for other previously discussed areas of Mandatory Spending such as Social Security and Medicaid. But, again, a significant portion of that Spending has already been mentioned.

Even if that was all above and beyond what had been previously accounted for, we would still have more than $900 Billion to account for, which is no small amount. And, if I’m being entirely honest, I don’t know how much more we’ve ticked away at the $1.9 Trillion we were looking at before those areas of Mandatory Spending entered the discussion. For the sake of moving this forward, we’ll go ahead and operate under the assumption that we’re looking at $900 Billion to account for.

Some of that was further distributed to States via Nonprofit Programs and Organizations that received grants. Of course, most of the funding for U.S. Nonprofits comes from sources other than the Federal Government. They received more than $550 Billion in Charitable Giving, with $101 Billion of that coming from Charitable Foundations and an estimated $412 Billion or so coming from Individual Donations or Estates. The rest more than likely came from Businesses and Corporations. Naturally, there are tax breaks involved for those entities.

I’d love to imagine our Federal Government shelling out $550 Billion or so toward Nonprofit Organizations and matching those numbers, but that’s a fantasy. The most liberal estimates indicate the Federal Government, in some capacity, spends an average of roughly $303 Billion on U.S. Nonprofits annually. But it’s difficult to find a breakdown of that Spending specifically for 2023. It probably varies significantly by year, so we’ll focus on the $303 Billion as a total, and assume none of it was already tallied in earlier categories.

This leaves us with (we’ll say) $600 Billion that I simply don’t have the Resources or the Time to track down. The best I can do from here is offer some speculation, and suggest aspects of the Federal Budget that weren’t entirely accounted for previously.

I’m sure that some of it falls through the cracks as Black Budget Items and Surveillance or Espionage Spending that doesn’t get mixed in with the usual Defense Spending, to keep it off the books. But I don’t imagine those Budgetary elements come anywhere close to $600 Billion, when the on-the-books Defense Spending is already more than $800 Billion.

We could assume some of it is Government Contract Spending that isn’t accounted for in the Defense Spending totals, Small Business Grants, and the other Funding already considered. Elon Musk’s various companies were recipients of $3 Billion of that Contract Spending, split between several different Federal Agencies, but most of that has already been accounted for.

Government Contracts devoured $759 Billion in Government Spending for 2023. $470 Billion of that was through the Department of Defense. Assuming the rest (which is surely not accurate) has not been part of the earlier Spending we’ve discussed, that would leave $289 Billion.

We would still be looking at more than $300 Billion left at the Table, which is clearly not the case, because our Deficit wouldn’t be as high as it is. The reality is that there’s definitely upwards of $300 Billion that I haven’t accounted for in my research, and that’s certainly no small amount.

Even with that ultimate failure in my capacity to dig through every Bill and piece of Legislation that slipped through Congress in 2023 (or before, because some of them include spending allotments for years to come, which is why we had the recent Recision Bill that took back funds that had previously been approved by Congress), I hope this has helped to explain where Federal Spending is directed. Sadly, I doubt the people who most need to get a firm grasp on what we’re spending (and where) are the least likely to take the time necessary to read this.

America’s Healthcare System Is Terrible…But That’s Okay…It’s Getting Worse

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The Healthcare System in this country is so totally broken. And it never ceases to amaze me that so many people either fail to see that or simply don’t care. I can only assume that the bulk of those individuals have never known or loved someone with a chronic illness or a disability of some kind, or–god forbid–something atypical in their biology.

They’ve never listened to the tearful conversations with doctors who regretfully share the news that the procedure or medication they recommended on the patient’s behalf has been declined by someone who is paid by the Insurance Company to locate any possible errors in Medical Coding, Coverage Limits, or what their Tables indicate as Appropriate Treatments.

I assume that they’ve never watched someone they care about waiting months as they jump through one hoop after another, as the actual Medical Practitioners dot every “i” and cross every “t”, per the wishes of an Insurance Provider who is just as likely to Deny the recommended treatment after all is said and done.

Surely, they’ve never watched someone give up, too exhausted to keep fighting Denial after Denial, of something several Medical Professionals have confirmed they need or that would improve their Quality of Life

After all, how could anyone who has witnessed or experienced things like that be of the mind that our Healthcare System isn’t bad enough as it stands, and needs to be made worse? That’s precisely what the Trump Administration and Congressional Republicans have opted for. As it turns out, they didn’t need to do anything at all, because things were on the way to getting worse without any assistance.

Not only are we looking at huge numbers of people removed from Medicaid and Medicare, combined with rising costs for Health Insurance obtained through the Affordable Care Act Marketplace, thanks to the new Congressional Budget Bill…but, according to a new study, more than half of American Employers are planning to pass rising costs of Health Insurance on to Employees.

Even if you’re lucky enough not to see a bigger bite taken from your paycheck, you might be one of the fortunate many who can expect to see higher Deductibles and/or Out-of-Pocket Maximums. Of course, there’s no guarantee you won’t see those increased costs even if you’re also experiencing higher Premiums.

Apparently, this is because the Employer-Paid portion of Health Insurance is expected to increase by 6% next year, after a 4.5% increase last year. Naturally, the Employee is the one who should shoulder that cost.

And the Insurance Companies are blaming it on increased Healthcare Costs (ignoring the rampaging elephant in the room, that the existence of Insurance Companies is a major driver behind those increased costs). Of course, they’re also pointing the finger at the popularity of expensive GLP-1 medications used for weight loss. Naturally, as should surprise literally no one, fewer Insurance Companies will be covering GLP-1 drugs next year. And, to maintain their year-over-year Profit Margins, they’re likely to stop covering a lot of things people have come to expect and depend on. So, as we should have learned from “Shrinkflation” in virtually every other industry, we look forward to paying more for less.

And all of this comes about as a new report indicates one in three Americans live in a “Healthcare Desert” where people lack access to vital services such as Pharmacies, Trauma Care, and Primary Care Physicians.

That’s not altogether shocking. After all, roughly 150 rural hospitals have closed their doors in the last 20 years…and the odds are good that more will be following suit. It’s still horrible to imagine that an estimated 28 Million Americans live more than 30 minutes from the nearest hospital, and that about 50 Million live more than an hour from a Trauma Center. This is only going to get worse as a byproduct of the Congressional Budget Bill, because $10 Billion a year (to be distributed between all 50 States) for rural hospitals isn’t going to go half as far as GOP Senators think…or at least not as far as they suspect their supporters are stupid enough to believe it will. I opted to amend that because I’m sure the Senators knew exactly what they were doing, and they simply didn’t care.

As the cost of Healthcare goes up, the ability to access it is going down.

I’d sincerely like to hear someone answer the same question proponents of Single-Payer Healthcare are always being badgered with.

“How can we afford this?”

The Truth About Medicaid, Medicare, & Other Fraud: It’s Not What You Think

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It has always seemed obvious to me that if people want to know where Medicare and Medicaid Fraud come from, they need to stop looking for illegal recipients. It isn’t as simple as some might think to defraud programs like SNAP, Social Security, Medicare, and Medicaid by filling out an application with false information.

I don’t know why it bears mentioning, but neither Medicaid nor Medicare provides Beneficiaries with cash. They operate as a substitute for Health Insurance. That might come as a surprise for those of you who have never needed to use one of these programs. So, even if someone successfully applies via Fraud, they aren’t lining their pockets at the expense of Taxpayers.

Even if someone manages to obtain Medicare or Medicaid coverage through fraudulent means, what happens then? In the worst-case scenario, they would obtain medical treatment that they otherwise could not have received. Let’s assume it’s the most expensive surgical procedure from 2024, which is a Heart Transplant. At the most expensive rate, that would cost Medicare or Medicaid $1.3 Million, assuming it would cover the surgery in the first place. It would require more than 38,000 people receiving fraudulently obtained Heart Transplants to equal the $50 Billion House Speaker Mike Johnson claimed was lost to Fraud, Waste, and Abuse of Medicaid each year. If that seems absurd to you, you’re absolutely correct.

Just last week, CVS Health’s Omnicare (pharmacy services for long-term care & senior living communities) was found guilty of fraudulently billing the U.S. Government for invalid Medicare, Medicaid, and Tricare Prescriptions and ordered to pay $948.8 Million in penalties & damages. A massive $406.8 Million of that was for Damages, which were tripled as per the False Claims Act.

All of this came about because a Whistleblower brought attention to more than three million false claims between 2010 and 2018.

In 2021, the average Medicare Spending per Beneficiary was only a little over $15,000. To put that in perspective, it means the Fraud committed by CVS translated into the equivalent of the total annual spending for just under 9,000 Beneficiaries, or just under 1,000 Beneficiaries each year for which CVS was found Guilty of the illegal billing.

And this is just the Fraud from one Corporation. I can assure you that they are not alone.

One thing that people need to understand is that Improper Medicaid payments are not the same as Fraud. It’s a challenge for some people to wrap their heads around that distinction because certain individuals have played fast and loose with conflating the two things…because it suits their agenda.

According to the Centers for Medicare & Medicaid Services, Improper Payments made up only 5.09% of the total payments made by Medicaid in 2024. Of that 5.09%, roughly 80% (or 4.07% of the Total) were caused by missing documentation that would determine whether a payment was correct or incorrect, and payments that went to the right Providers in the right amounts, but that may not have complied with some regulations or statutes. In all of those cases, if the paperwork had been correct, they wouldn’t even factor into these numbers, because the payments wouldn’t have been classified as Improper or because they wouldn’t have been issued in the first place.

It’s the remaining 20% of that 5.09% where we find people who weren’t eligible for Medicaid. But it is also where we locate the individuals who were eligible but received a service that wasn’t covered.

So, while all of these 5.09% of Improper Payments count as Monetary Loss, they do not constitute Fraud. All of the Fraud falls into the minuscule 1.02% of the Total Payments.

Yes, we should be combating Fraud, but it’s not the Beneficiaries of Medicaid and Medicare who are the criminals, guilty of committing the vast majority of Fraud; it’s Ambulance Services, Pharmacies, Nursing Homes, and other Providers who have utilized creative bookkeeping and manipulation of the system. The victims are the Beneficiaries, Legitimate Providers, and Taxpayers alike.

Fighting Fraud doesn’t involve cutting funding for Medicaid, and it won’t have any impact on the rate of Improper Payments, because the Beneficiaries were never the primary Source of them.

What I hate more than anything is that this is ultimately yet another dog whistle for anti-immigration proponents. I’m not going to use Undocumented as a descriptor here, because we’ve all heard the plan, shared far and wide wherever cameras are rolling, that the Trump Administration intends to strip Documented Status from Immigrants, including those who are Citizens. It was never about doing it the right way; it was about being the right ethnic makeup, which is why there was so much support from people who believe in “The Great Replacement” myth.

Across the years 2021, 2022, and 2023, Wyoming and South Carolina were the two states with the highest rates of Improper Medicaid Payments (at 20.7 and 20.5% respectively), with Delaware, Connecticut, and Idaho following close behind. As you might notice, none of these five states are among the most populated, and none of them are near the top of the list of states with the largest immigrant populations.

California, New York, New Jersey, Florida, and Nevada are the states with the largest immigrant populations, yet they all fell below a rate of 9% during those three years.

So, people need to stop pretending this is even remotely connected with our Border Policy or Immigration Statistics, because there isn’t even a Correlation to mistake for Causality.

House and Senate Republicans upheld their promise not to tamper with Medicare as far as work and age Eligibility Requirements were concerned when drafting the 2025 Congressional Budget Bill. However, Eligibility for certain Immigrant groups will be impacted, as some Non-Citizens who were previously Eligible as Permanent Residents of the U.S. for at least five consecutive years will lose coverage 18 months after the Legislation is passed.

Medicaid, however, was far from off-limits to Congressional Republicans…and where they have tampered with Medicaid and other health coverage through the ACA, it could have dramatic and widespread impacts on healthcare systems across the nation.

Medicaid is funded through a combination of Federal and State Taxes, with roughly 70% of that funding coming from the Federal Budget. States often derive a significant amount of their funding through Provider Taxes, which are taxes paid by Health Care Providers (hospitals, nursing homes, and the like). The House version of the Congressional Budget Bill would have prohibited States from creating new Provider Taxes or increasing the current percentages paid by Providers, which are capped at 6%. The Senate version, however, gradually decreases that percentage to 3.5% by 2031, but only for the 40 States (and the District of Columbia) that employed Medicaid Expansion under the Affordable Care Act, leaving exceptions in place for nursing homes and intermediate care facilities.

This will dramatically decrease the amount of matching funds paid by Federal Taxes, creating a bit of a double-whammy on States that are being penalized for adopting Medicaid Expansion.

The concern here is that States will almost certainly have to make dramatic cuts to Medicaid as a result of the lost revenue, further cutting the number of people covered or the amount paid to Providers.

Of course, there’s also the addition of out-of-pocket expenses for Medicaid enrollees, as a $35 co-pay will be required for some services (again, only in States with expanded Medicaid) for individuals with an annual income of more than $15,650 (Federal Poverty Level). The Senate did add allowances for States to charge an even greater co-pay for Emergency Room visits for Non-Emergencies. The silver lining is that the co-pay policy doesn’t apply to primary care, mental health, or substance abuse services.

Access to insurance coverage through the Affordable Care Act marketplace is about to become more challenging as well. It will also be more expensive as enhanced subsidies are scheduled to expire at the end of 2025, which could result in some costs for ACA insurance coverage increasing by an average of 75%. I don’t know how many people can afford to see their Insurance Premiums go up by 75%, but I would be irate if it were happening to me.

Hundreds of thousands of Lawfully Present Immigrants are likely to lose insurance coverage through the ACA, because additional subsidies that keep those costs down will also be expiring.

All of this is devastating at a time when hospitals and medical facilities across the country are already facing massive budget shortfalls. Part of that comes from Medicaid and Medicare payments not being sufficient to keep pace with rising operating costs. Those skyrocketing operating costs are partially derived from administrative expenses produced by Insurance Companies, due to prior authorizations and the appeals associated with denials.

According to a report from the American Hospital Association last September, administrative costs alone accounted for more than 40% of the average hospital’s total expenses. Not only does the Commercial Insurance Industry delay and often deny necessary care for patients, but it also dramatically increases the costs for Providers to operate in the first place, which leads to increased costs for the rest of us. Of course, the Industry is thriving as a whole, with many Insurance Companies seeing record profits year after year.

You may notice some disdain for Insurance Providers, and that’s something I’m entirely conscious of. I’ve experienced frustration regarding the predatory practices of the for-profit Insurance Industry while researching their standards, profit margins, and actions.

What we’re likely to see if the House and Senate Republicans have their way, in addition to fewer people being covered by Medicaid (and health insurance in general), is staffing cuts at Providers or (in the worst case) closures. This is most likely to happen in areas where the population is lowest, impacting rural Providers more than those in urban areas…though the impacts would still be massive there as well.

Because of this, Senators added a $50 Billion fund ($10 Billion annually) to the Congressional Budget Bill, insulating rural hospitals from some of the worst impacts. The House version of the bill would have allowed rural hospitals that closed between 2014 and 2021 to reopen under the Rural Emergency Hospital designation, which allows Medicare to provide them with a potential lifeline. This could have been good, since 146 hospitals in rural counties closed between 2005 and 2023. The Senate, unfortunately, included no provision to reopen those hospitals under the retroactive designation.

So, there are some small bits of good mixed in with the bad aspects of that portion of the new budget, but none of those “good” things would be quite as necessary if it weren’t for all of the “bad” aspects of the Congressional Budget Bill. And altogether too much of that “bad” is tied up in transparent bigotry directed toward Immigrants, and the false claims that they are responsible for Fraud in the Medicaid and Medicare systems, along with the other things people often refer to as “entitlements.” Of course, while focusing on Legislation to further disenfranchise already disenfranchised people, the same Lawmakers are providing additional handouts to Corporations, the actual sources of Fraud, Waste, and Corruption.