Treasury recovered $31 million in improper payments, including health benefits for the deceased, in just five months after gaining access to death records—yet billions more may lurk in fragmented government systems.
Story Snapshot
- Treasury’s Do Not Pay system clawed back $31 million from payments to dead people since early 2025.
- New laws mandate quarterly Death Master File checks for Medicaid enrollees starting 2027.
- Senate passed permanent data-sharing bill on September 26, 2025, to end payments across all federal programs.
- States face federal funding cuts for failing to remove deceased from Medicaid rolls.
- Systems failures, not fraud, drive most errors due to delayed death reporting and poor data coordination.
Death Master File Tracks Deceased but Sharing Lagged
Social Security Administration built the Death Master File in the 1970s from reports by funeral homes, states, families, and hospitals. This database lists over 90 million death records. Federal agencies relied on it unevenly due to privacy laws blocking full access. Medicare and Medicaid claims continued post-death because systems stayed siloed. GAO reports from the 2000s flagged billions in improper payments to deceased beneficiaries across programs.
States managed Medicaid enrollment through local vital records, missing out-of-state deaths. ACA subsidies flowed unchecked without cross-matches. COVID stimulus checks to dead people in 2020 exposed the flaws, spurring bipartisan action. Congress saw taxpayer dollars wasted on ghosts in entitlement systems.
Congress Forces Data Sharing with Do Not Pay System
Senator John Kennedy’s 2024 Stopping Improper Payments to Deceased People Act temporarily let SSA share the Death Master File with Treasury’s Do Not Pay system. Agencies now screen payments against death data before disbursement. Treasury announced $31 million recovered in the first five months of 2025, proving the system’s power. This targeted health benefits, Social Security, and more.
Why is the government paying for dead people’s health insurance? https://t.co/XP9ecldGkA
— TheHillOpinion (@TheHillOpinion) December 12, 2025
Senator Kennedy highlighted these wins, aligning with conservative demands to protect taxpayer funds. Common sense dictates no payments to the dead, yet bureaucracy resisted change. The temporary fix saved an estimated $330 million through 2026, building momentum for permanence.
2025 Budget Law Targets Medicaid Enrollment Errors
July 2025 budget reconciliation law enacted Section 71104, requiring states to check the Death Master File quarterly for Medicaid enrollees starting January 1, 2027. States must disenroll deceased individuals promptly. From 2028, quarterly checks extend to providers. HHS will cut federal matching funds for improper payments after October 1, 2029.
These steps address enrollment inertia where dead people lingered on rolls. CBO projects minimal spending impact from death checks alone, unlike broader eligibility tightenings projected to save $63 billion but uninsured 700,000 more. Fiscal conservatives praise the discipline; it enforces accountability without overreach on the living.
Senate Secures Permanent Fix for All Federal Payments
On September 26, 2025, the Senate passed the Ending Improper Payments to Deceased People Act, sponsored by Senators Wyden, Kennedy, and Peters. This permanently amends the Social Security Act, allowing full Death Master File access via Do Not Pay for every federal agency. Cosponsors like Hassan, Ernst, and Warner bridged parties for taxpayer protection.
The bill expands cross-checks, preventing Medicare claims, pensions, and subsidies post-death. Early recoveries validate the approach. Critics fear aggressive checks might drop living enrollees, but facts show systems errors dwarf fraud. Permanent reform aligns with American values of stewardship and efficiency.
Stakeholders Align on Program Integrity
CMS oversees Medicaid implementation, pressuring states with funding penalties. Treasury runs Do Not Pay, now turbocharged. SSA provides death data securely. States bear IT costs but gain incentives to clean rolls. Congress, led by fiscal hawks like Kennedy, drives change. These reforms promise sustained savings without gutting coverage for the eligible.
Implementation timelines ensure steady progress: enrollee checks in 2027, providers in 2028, penalties in 2029. Treasury’s $31 million haul foreshadows broader wins. Common sense prevails—government must stop subsidizing the deceased to honor living taxpayers.
Sources:
Health Provisions in the 2025 Federal Budget Reconciliation Law
