Last night on CBS’s 60 Minutes, Steve Kroft investigated the $60 Billion (yes that’s billion) in Medicare fraud that takes place every year in this country. This black market is so pervasive that it has taken over cocaine as the major criminal enterprise in south Florida – think “Scarface,” but operating in your local pharmacy. The schemes are quite simple according to the FBI: rent a cheap storefront office, find or create a front man to get an occupational license, bribe a doctor or forge a prescription pad, and obtain the names and ID numbers of legitimate Medicare patients so you can bill phony charges. After submitting the form, criminals receive the Medicare reimbursements directly into their bank accounts from Uncle Sam. With such substantial fraud, you would think there would be millions of outraged victims – the problem is that the victim is the American taxpayer, who has until now known little of this underground enterprise.

This report exposed the tremendous tendency for corruption and inability of the federal government to control one program aimed at health coverage. But fraud and corruption are only part of the failed system that is Medicare – the other is basic accounting. In this morning’s Washington Post, Robert J. Samuelson compares the troubles with Medicare to the “public option,” which he calls a “mirage,” that is gaining strength in Congress. While Medicare is a monopoly, the proposed government-run health insurance plan seeks to attract investment capital to subsidize the enormous costs that it will incur (such as marketing campaigns). If this fails, which it undoubtedly would, Congress would step in to bail it out.

When asked why it has taken Medicare so long to figure out they were being scammed, Attorney General Eric Holder told CBS’s Steve Kroft, "I think lack of resources probably. And then I think people I don't think necessarily thought that something as well intentioned as Medicare and Medicaid would necessarily attract fraudsters. But I think we have to understand that it certainly has."

Good intentions, it seems, make sobering realities all the more painful.

Write to tdoheny@afphq.org