Dr. Oz: Billions in Entitlement Fraud in Blue States Is ‘a Feature, Not a Flaw’

WASHINGTON — Dr. Mehmet Oz, President Donald Trump’s senior adviser on Medicare and Medicaid, said in a wide-ranging interview with Just the News that the massive scale of fraud uncovered in Democrat-led states appears to be an intentional feature of how some state governments operate rather than simple incompetence.

“I do think it’s a feature for some of these states,” Oz told Just the News on Thursday night. He pointed to ongoing federal investigations that have exposed systemic waste, fraud, and abuse in programs like Medicaid and Medicare, particularly in states such as California, New York, and others run by Democrats.

Oz, who leads the Centers for Medicare & Medicaid Services (CMS), noted that the agency alone loses roughly $100 billion annually to fraud. Eliminating that loss, he said, would effectively double the life expectancy of the Medicare trust fund.

“If we just fix that, just give you an affordability context, it will double the life expectancy of the Medicare trust fund,” Oz explained. “So if you’re out there working your tail off, hoping one day Medicare will be there for you to catch you in your older years, it’ll double the life expectancy of that program.”

This week, Oz announced that CMS had shut down 800 hospice centers suspected of operating as empty, fraudulent shells. “It highlights the reality that the fraud had actually created such a deep corruption, such a deep rot in the system, that when someone finally began to take action, they all scurried like rats into the corners,” he said. “They never thought anybody would come after them.”

Oz highlighted New York as a prime example of how political incentives may encourage fraud. He noted that the state’s No. 1 job is now “personal care service attendant” — roles that pay people, often family members or neighbors, to perform basic tasks such as carrying groceries, cooking, or driving to doctor appointments that families traditionally handle themselves.

“These are unlicensed people in undocumented, unsupervised settings, providing services that we’re paying for,” Oz said. “Five hundred thousand people are doing these jobs now. Number one jobs program in the state.”

He added that the arrangement benefits state politicians facing declining employment numbers: “When the governor of New York is seeing declining employment, and they can get people employed by the federal government in the disguise of personal care services, it’s a winner. They don’t have to pay unemployment. They get to take taxes on the money that these guys are getting paid.”

Big Labor also benefits, Oz noted, because unions have been allowed to organize these workers. “Everybody’s getting money through Medicaid,” he said.

Oz further pointed to foreign fraud networks exploiting the system, including organized crime groups such as the Russian mafia. He cited one recent case in which perpetrators stole $58 million in taxpayer funds, bought gold bullion, and attempted to flee the country.

The comments come as the Trump administration, led in part by Vice President JD Vance, has taken aggressive steps to combat fraud. Earlier this week, the administration temporarily withheld $1.3 billion in Medicaid payments to California over fraud concerns.

Oz stressed that Republicans have long suspected fraud of this magnitude while Democrats appear embarrassed by the revelations. “Republicans always suspected there was fraud of this magnitude. Democrats feel embarrassed that it’s gotten this bad, and they don’t know what happened to all the money they thought they were helping people with. So it’s a great issue for us to drive home,” he said.