Americans routinely verify their identities multiple times a day—through authenticator apps, one-time codes, password resets, and Social Security number confirmations. Yet when it comes to government welfare programs that distribute trillions of taxpayer dollars, identity verification remains largely optional. That disconnect is now under scrutiny as federal audits reveal staggering levels of fraud and abuse.
Congress, federal agencies, and state governments should immediately adopt mandatory identity verification for all welfare applicants, a move that could save taxpayers nearly $30 billion over the next decade. The current system, which often relies on self-attestation and post-enrollment checks, has proven vulnerable to exploitation.
During the COVID-19 pandemic, scammers stole an estimated $400 billion from federal relief programs. Today, at least 10 cents of every dollar in food stamps is lost to waste or fraud, and Medicaid losses exceed 20 cents per dollar. Over the next ten years, Medicaid fraud alone could cost taxpayers more than $2 trillion.
Federal regulations currently require states to verify the identity of Medicaid applicants only in narrow citizenship-related cases. This leaves the door open for organized fraud rings, which have bilked the system for millions before being caught.
Audits Reveal Easy Exploitation
A recent USDA audit of food stamp programs across 29 states found nearly 250,000 individuals receiving duplicate benefits within the same state, and over 100,000 people collecting benefits in multiple states. When matched against Social Security records, 185,000 recipients were found to be deceased, and more than 440,000 recipients—collecting nearly $1 billion in benefits—had used dummy Social Security numbers like 111-11-1111 or 999-99-9999.
Separately, the Government Accountability Office ran a stress test on HealthCare.gov, submitting 20 fictitious applications for subsidized coverage. Nineteen were approved, and 18 were still active when the report was issued. The GAO also identified nearly 70,000 Social Security numbers used to access more than a year’s worth of premium tax credits in a single plan year, noting the marketplace does not prohibit multiple enrollments per SSN.
Prosecutions Highlight Scale of Abuse
The Trump administration’s Department of Justice has cracked down on several high-profile fraud schemes. In Illinois, a scheme billed $75 million in false Medicaid claims for substance abuse treatment, including for a patient who was brain dead. Funds were used to buy luxury cars, real estate, diamonds, and a 42-foot yacht named “Butt Nekkid.” Another Illinois scheme billed $67 million for behavioral health services never provided, with proceeds going to luxury purchases and brokerage accounts. In New York, a fraud ring billed $35 million for ambulance rides to fictitious addresses, funding multiple investment properties.
These cases were only caught after reaching tens of millions in losses—losses that could have been prevented with basic identity checks.
Policy Shift Needed
The Biden administration had encouraged states to accept “self-attestation” for eligibility, allowing trust-based determinations with verification only after benefits began. That approach has proven disastrous, enriching scammers while undermining public confidence in vital safety-net programs.
Identity theft affects an estimated one in five Americans, yet the solution is not to let fraud go undetected until it spirals out of control. Taxpayers are routinely required to prove who they are; welfare applicants should be held to the same standard.
As the debate over government spending intensifies, the push for mandatory identity verification is gaining momentum. For more on related accountability efforts, see this week's testimony scrutiny and the broader crisis of unchecked power.
It is time for policymakers to act. The honor system has failed, and taxpayers deserve better.
