ARI SHAPIRO, HOST:
Elon Musk's Department of Government Efficiency is quickly expanding its reach through the federal government. It recently accessed systems at the Centers for Medicare and Medicaid Services. Musk and his team are now looking at key payment and contracting systems for Medicare and Medicaid - that was first reported by The Wall Street Journal. On X, Musk posted, he believes that, quote, "big money fraud is happening."
In a moment, we'll get to the impact of DOGE operating at CMS. First, a quick reminder of what these programs actually do. Medicare insures older people. Medicaid offers insurance to low-income people and those with disabilities. Together, these two programs serve tens of millions of people. They consume a huge part of federal and state budgets. To explain how the Department of Government Efficiency might impact those services, we've invited two former senior government officials. Kathleen Sebelius was Health and Human Services secretary under President Obama, and Mark McClellan was Medicare and Medicaid Services administrator under President George W. Bush. Thank you so much for joining us to both of you.
MARK MCCLELLAN: Great to be with you, Ari.
KATHLEEN SEBELIUS: Good to be with you.
SHAPIRO: How big a part of the overall U.S. health care system are these programs?
MCCLELLAN: Well, it's less than half of the population, but roughly half and maybe a little bit more of expenditures because the people in these programs have some of the more serious health care needs - higher rates of chronic diseases that go along with being from low-income and maybe historically underserved backgrounds, higher rates of chronic diseases that go along with aging and the risk factors for many conditions like cancer and other health problems that go up with age.
SEBELIUS: And, Ari, I think it's important that maybe listeners understand that Medicare has a much higher cost per person because of the age of the population. Medicaid is actually one of the most, if you will, by cost, efficient programs for women and children. About half of the births in the United States are paid for by Medicaid.
SHAPIRO: So Kathleen, when you saw Elon Musk post on X that Medicare and Medicaid were where the big money, in his words, fraud is happening, did that ring true to you? Was that a big concern of yours when you ran HHS?
SEBELIUS: Fraud, waste and abuse have always been a focus of the federal agencies. One of the things that happened with the Obama administration was really ramping up the kind of fraud rooting-out activities that we did in coordination with the Department of Justice. The notion that this is somehow an undiscovered area that people who are not at all familiar with the programs or the way they operate are going to suddenly be able to identify and root out is just flat out wrong.
SHAPIRO: Mark, how did you react to seeing that post from Elon Musk?
MCCLELLAN: Well, I totally agree with Kathleen that this is an ongoing battle. So I think that the real question for DOGE is, can they find a way to get these inappropriate programs out while, by the way, Ari, at the same time, keeping President Trump's promise that he is not going to cut or disrupt Medicare benefits?
SHAPIRO: Do you fear that this mission to eliminate waste and fraud could be a pretext for making broader sweeping changes to Medicare and Medicaid that are not actually motivated by waste and fraud and don't actually address waste and fraud?
MCCLELLAN: The reason that I'd like to take them at their word, Ari, is that the staff at CMS, under...
SHAPIRO: CMS, the Centers for Medicare and Medicaid Services, got it.
MCCLELLAN: Centers for Medicare and Medicaid Services that oversees these programs - they are in place now. So Dr. Mehmet Oz - Dr. Oz has been nominated to be the next administrator. He's still waiting for a confirmation hearing, so he's not there. But in contrast to some of the other public health agencies at HHS, there's a whole team of people who are in politically appointed deputy roles working with the career staff who have a lot of experience with CMS and the private sector on working with Medicare and Medicaid programs. The CMS team has also brought in some long-experienced career professionals, including people who were there on the career staff working with me, including the new chief operating officer at CMS, who has a tremendous amount of nonpartisan experience in finding ways to address fraud, waste and abuse in Medicare and Medicaid programs.
SHAPIRO: So just so I understand, in other parts of the government, from the Treasury Department to the Justice Department, we have seen career officials and nonpartisan civil servants either fired and replaced or encouraged to leave. You're saying the opposite appears to be true at the Centers for Medicare and Medicaid Services?
MCCLELLAN: I think something distinct is happening here, in that, you know, the DOGE team, as I understand it, didn't just show up but is working directly, following some of the guidance and the experience of the career staff and the political leadership to find the effective ways of addressing fraud and abuse, and hopefully to modernize some of the data systems there, too.
SHAPIRO: Kathleen, do you give them the benefit of the doubt? Do you trust them to take a nuanced data-driven approach?
SEBELIUS: Well, I'm encouraged by what Mark is saying about what his knowledge is about people who are coming into the agency. But the proposals, Ari, that are out by, I would say, Republicans in Congress are very much aimed, particularly in the Medicaid program, at cutting benefits. They are not about fraud, waste and abuse. You can't really, I would suggest, get the kind of money that has been promised by DOGE. Even if you greatly ramp up fraud, waste and abuse, you really have to go to the core of the benefits of these programs. And that is where I'm very wary of what the proposals are coming forward.
SHAPIRO: So bottom line, if people who depend on these programs want to know, is my coverage safe? Can I continue to count on the services that I have counted on in the past? We don't know where this is going to go. What should people be watching?
SEBELIUS: Well, I would say for now, until they are notified otherwise, assume the services that you signed up for, if you've just gone through Medicare open enrollment or if you are a member of your state's Medicaid program, the services - your provider, your drugs - will continue to be provided and use them. I think it's very important at the state level, particularly, that legislators in red and blue states understand that if Congress begins to change Medicaid rules, payments about Medicaid programs, it will blow up every state budget in this country. Medicaid is one of the most important parts of every state's budget. They rely heavily on a shared partnership with the federal government. And if those rules begin to change, everything else is at risk - economic development, the ability to fund education, the tax system. And states will be left in the really unfortunate position of having to pick and choose who gets to keep their coverage and who doesn't.
SHAPIRO: That is former Health and Human Services Secretary Kathleen Sebelius, a Democrat. And former Medicare and Medicaid Services Administrator Mark McClellan, a Republican. Thank you both for joining us today.
SEBELIUS: Thanks for having us.
MCCLELLAN: Thanks, Ari.
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