Taxpayers have funded health insurance for ghosts, deceased Americans lingering on Medicaid rolls until a new law finally slams the door on this wasteful absurdity.
Story Snapshot
- Government paid Medicaid for dead people due to outdated records and rare death checks.
- 2025 Reconciliation Law mandates quarterly SSA Death Master File reviews starting 2027.
- Bipartisan effort recovered $31 million in improper payments via data sharing pilot.
- CBO estimates zero budgetary impact, yet symbolizes fiscal responsibility amid trillion-dollar cuts.
- States must comply or risk federal funds, targeting enrollment and provider errors.
Roots of Payments to the Deceased
Social Security Administration maintains the Death Master File since the 1980s, capturing 90% of U.S. deaths. Federal agencies operated in silos, limiting data sharing. Medicaid states conducted infrequent checks, often annually or less. Pandemic-era continuous enrollment from 2021-2023 swelled rolls without verifications. Audits flagged billions in improper payments across programs, including health insurance mismatches between state and federal systems.
Senator Kennedy Ignites Reform
Senator John Kennedy (R-LA) passed the bipartisan Stopping Improper Payments to Deceased People Act in 2024. This enabled temporary sharing of SSA’s Death Master File with Treasury’s Do Not Pay system. Within five months of 2025, it recovered $31 million in erroneous payments, including health-related ones. Kennedy’s pilot proved data matching works without harming living beneficiaries. Common sense demands permanence after such success.
2025 Law Locks in Medicaid Fixes
Section 71104 of the 2025 Federal Budget Reconciliation Law requires states to quarterly review the Death Master File for Medicaid enrollees, effective January 1, 2027. Provider checks follow on January 1, 2028. Senators Ron Wyden (D-OR), Kennedy, and Gary Peters (D-MI) advanced the permanent data-sharing bill, passing the Senate on September 26, 2025. HHS and CMS enforce compliance, with $75 million federal aid for eligibility tools.
Bipartisan Push Meets Negligible Savings
Congressional Budget Office scores zero budgetary impact over 10 years, deeming the issue minor against Medicaid’s vast spending. Treasury’s pilot saved $31 million government-wide, yet Medicaid’s slice remains small. States bear implementation costs but avoid larger federal penalties. This provision stands apart from $63 billion cuts via six-month redeterminations. Fiscal hawks celebrate the win on waste, aligning with conservative values of accountability.
Why is the government paying for dead people’s health insurance? https://t.co/XP9ecldGkA
— TheHillOpinion (@TheHillOpinion) December 12, 2025
Administrative checks prevent recurrence without coverage losses for the living. GAO reports highlighted over $100 million annual Medicaid overpayments to deceased before reforms. Bipartisan sponsors like Ashley Moody (R-FL) and Joni Ernst (R-IA) emphasize taxpayer protection. No major opponents emerged, given the provision’s low controversy.
Implications for Taxpayers and States
Short-term, states face quarterly verification burdens amid Republican-led $1 trillion health spending trims, including work requirements. Long-term, integrated data sets precedent for ACA marketplaces and CHIP. Taxpayers gain symbolic relief from “ghost” enrollees, though savings pale next to broader inefficiencies. UPenn analysis notes frequent checks risk churn for living enrollees, but this targets only the deceased—pure common-sense hygiene.
Reform bolsters trust in government stewardship. States prepare implementation without reported delays as of late 2025. Peters called it a “vital step” against wrongful payments. Amid surging healthcare costs, ending payments to the dead restores basic fiscal integrity.
Sources:
https://www.kff.org/medicaid/health-provisions-in-the-2025-federal-budget-reconciliation-law/
