The federal government has been quietly paying health benefits for people long after they die, and the real scandal is how long Washington knew about it and looked the other way.
Story Snapshot
- Billions in “improper payments” include health coverage and claims for people already dead
- Congress is finally forcing agencies and states to check federal death files on a tight schedule
- A new bipartisan bill would hard‑wire death‑record checks into every federal payment system
- Cracking down on waste risks cutting off some living Americans if data and safeguards fall short
How dead people end up with live health insurance
Federal and state systems still treat some dead Americans as if they were alive because no one reliably connects the dots between a person’s death and the many databases that pay their benefits. Medicaid rolls in the states, Medicare’s systems, and other federal ledgers often run on old software, siloed records, and infrequent eligibility checks. When the Social Security Administration updates its Death Master File, that fact does not automatically ripple through the maze of health programs that spend your tax dollars.
Watchdogs have documented the same pattern for years: a person dies, the family notifies some office, but the health program covering them or paying their doctor never gets the memo. Managed care plans keep receiving monthly capitation payments for “enrollees” who are buried. Fee‑for‑service programs still pay claims for services allegedly rendered after the date of death. These are tagged as “improper payments,” but until recently there were few hard requirements to hunt them down aggressively.
The new legal push to stop post‑death payments
Congress finally started tightening the screws when it saw how much low‑hanging fruit was sitting in plain sight. A temporary law pushed by Senator John Kennedy let the Social Security Administration share its Death Master File directly with the Treasury Department’s “Do Not Pay” system. In only five months, Treasury reported recovering $31 million in fraud and improper payments across programs once it could screen checks against real death data in something close to real time.
Those early savings helped drive a broader reform wave. In July 2025, a major federal budget reconciliation law rewrote big pieces of Medicaid, including how states must handle deaths. States will soon be required to review the Master Death File at least every quarter to make sure deceased individuals do not remain enrolled in Medicaid, and to run similar quarterly checks on Medicaid providers so agencies stop paying claims to doctors or suppliers who have died. Congress also ordered new financial penalties that will cut federal matching funds to states when audits uncover payments for ineligible people or overpayments for eligible ones.
Why is the government paying for dead people’s health insurance? https://t.co/XP9ecldGkA
— TheHillOpinion (@TheHillOpinion) December 12, 2025
When “cracking down on waste” hits real patients
On paper, many conservatives see this as common sense: you should not send taxpayer money to dead people, and states that do so repeatedly should lose some federal funding. The Congressional Budget Office estimates that the stricter Medicaid error rules, including tougher treatment of “insufficient information,” will trim federal spending by about $8 billion over a decade. But that same set of provisions is expected to leave about 100,000 more people uninsured by 2034, because borderline or hard‑to‑verify cases often get swept out with the genuinely ineligible.
That trade‑off exposes the tension at the heart of every “waste, fraud, and abuse” crusade. Aggressive use of death files and documentation checks reduces spending and deters scammers. Still, it also increases the chances that a low‑income senior, a disabled adult, or a family dealing with messy records gets flagged incorrectly. The 2025 shutdown fight underscored how easily coverage and services can be disrupted for law‑abiding people even as Washington insists it is only targeting abuse.
The permanent death‑file fix and what it signals about priorities
The Senate’s Wyden, Kennedy, Peters “Ending Improper Payments to Deceased People Act” aims to lock in the most straightforward part of this cleanup: permanent authority for SSA to feed its Death Master File into the Do Not Pay system, and for Treasury to share those death matches with any agency that cuts checks. Kennedy’s earlier temporary reform was projected to save at least $330 million from 2024 to 2026, and its backers argue that permanent integration should multiply those gains.
From a common‑sense, fiscally conservative perspective, that direction is hard to argue with. Taxpayers should not bankroll health coverage or provider payments tied to people who clearly no longer exist, and Congress has a duty to give agencies the tools and authority to shut that spigot off. The real test will be whether the same lawmakers who proudly trumpet savings from death‑file crackdowns also invest in the data quality, appeal rights, and human review needed to make sure “improper payments” reductions come from the dead rather than from the living Americans already struggling to hang on to their health insurance.
Sources:
KFF – Health Provisions in the 2025 Federal Budget Reconciliation Law
Compassion & Choices – How the 2025 Government Shutdown Affects Your End-of-Life Care
