Throughout his campaign, Vivek Ramaswamy has repeatedly called on the prosecution of Medicaid fraud to secure him “billions” to pay for his agenda. This week, he added more weight onto the back of prosecuting Medicaid fraud when he pointed to it as a way to pay for his 90-day suspension of the state gas tax. I think it is important for Ohioans to understand exactly why Ramaswamy’s (over)reliance on prosecuting Medicaid fraud to secure him “billions” is problematic. There are smarter, more reliable ways to fund the elimination of the state income tax and other key priorities. Part of any solution, however, rests with freezing state spending, as it has been on a rampage since John Kasich became governor.
Yesterday, I posted the below on X as background on the debate over paying for the proposed gas tax suspension.
Very important facts re “Medicaid fraud” paying for much of Vivek Ramaswamy’s agenda:
(1) Proving Medicaid fraud after the fact is hard. For example, proving son didn’t do home health care work for mom would take extraordinary work & cost money to investigate/prove/try;
(2) Recovering funds already spent isn’t easy. Even if (1) done, money likely spent or sent overseas. Good luck recovering;
(3) Even if you can recover OR stop future Medicaid fraud, keep in mind federal government pays 90% of expansion costs & 65% of general Medicaid costs, so if recover or stop $1 billion in fraud, feds get or save $0.65-$0.90 of every dollar leaving just $0.10-$0.35 for Ohio OR $100,000,000-$350,000,000, which in $46,000,000,000 annual budget is 0.22%-0.76% of annual budget--less than 1% of entire budget. That isn’t much;
(4) Medicaid fraud savings won’t cover gas tax suspension & only cover 3.5% of state income tax repeal ($10,000,000,000 in tax revenue/year)--certainly won’t cover both;
(5) Only serious way to truly find money is repeal Medicaid expansion entirely--saves Ohio $8.7 billion/year; and
(6) Still have the problem in (3), but gets far more money than mythical “Medicaid fraud”--not saying there isn’t, just saying recovering or stopping it hard, already done by Ohio AG or JD Vance task force, or savings always more than promised. For decades, politicians have hung their hats on “waste, fraud, & abuse,” yet rarely find it & if do find it, never meets promised jackpot. It is an easy promise too many voters have been fooled by for too long & allows politicians to skip over making tough choices like repealing costly programs or limiting spending.
You get what I’m saying here, folks? To get “billions” out of prosecuting Medicaid fraud, you’d have to do what heretofore has never been done in any state in the history of Medicaid vis-a-vis prosecuting past fraud OR, given the very small state share of Medicaid, you’d have to find at least $20 billion in Medicaid expansion fraud (Ohio gets 10% back) or $6 billion in regular Medicaid fraud (Ohio gets 35% back).
If Ramaswamy and the supermajority Republican Ohio General Assembly want to give Ohioans financial relief now, they should do as I say above by cutting the state income tax rate by a quarter-to-half-a-percent retroactive to January 1, 2026, and give Ohioans who’ve made less than $26,050 this year a $250-to-500 rebate check. Ramaswamy says he wants to eliminate the state income tax. Why not start now? Suspending the state gas tax won’t amount to much at the kitchen table of suffering Ohioans. As part of any serious plan, however, state spending needs to be frozen and Kasich’s ill-advised Medicaid expansion under Obamacare must be repealed. If you don’t stop state spending increases and don’t eliminate Medicaid expansion which is driving 50% of annual spending, mathematically you cannot eliminate the state income tax. Ever.
