As a Certified Public Accountant in private practice, I’ve observed a troubling pattern of abuse
within Medicare and Medicaid systems that cannot be ignored. While these programs are
essential lifelines for millions of vulnerable Americans, they are increasingly being manipulated
by individuals who do not truly qualify—often by misrepresenting income or engaging in under-
the-table employment arrangements.
Systemic Abuse Through Wage Manipulation
One of the most common schemes I’ve encountered involves individuals underreporting
income through artificially low W-2 wages. Many small businesses—especially in the restaurant
and service industries—pay employees half or more of their wages in cash, “off the books,”
allowing them to appear eligible for government benefits they would otherwise not qualify for.
This isn’t isolated behavior; it’s becoming normalized in certain communities.
As a CPA, I am concerned not just about the financial impact on government programs, but
about the fundamental fairness of a system that punishes honesty and rewards manipulation.

Employer Pressure and Ethical Dilemmas in Hiring
In today’s tight labor market—especially in major cities—many employers are facing immense
pressure from job seekers who demand partial or full off-the-books compensation in order to
maintain eligibility for welfare, housing subsidies, or Medicaid benefits. In numerous cases, it
is not the employer initiating fraud, but rather the employee coercing the business owner into
an unethical arrangement under the threat of quitting or refusing to work.
This behavior creates a damaging double standard:
 Honest employers who follow labor and tax laws are penalized by being unable to
attract workers.
 Dishonest workers manipulate the system for personal gain while pressuring small
businesses into complicity.
This practice has become alarmingly common in sectors with a high percentage of low-wage,
cash-based employment—such as cleaning services, hospitality, and small retail operations.
We must make a clear distinction:
Employers who are pressured or manipulated into wage fraud should not be punished the
same way as those who willfully orchestrate fraud.

Instead, enforcement should:
 Focus on root causes of systemic abuse, such as benefit qualification loopholes.
 Recognize the economic coercion facing many employers in today's hiring environment.
 Create safe reporting mechanisms and support structures to help businesses resist
unethical demands without fear of retaliation or closure.

Politicians Acknowledge the Problem—But Take No Action
In an effort to bring about change, I’ve personally spoken with New York State senators and
assembly members. While many acknowledged the issue, their response was disheartening:
“We know it’s happening, but there’s nothing we can do.” This passive stance is part of the
problem. In reality, many elected officials are aware of the abuse—and some, through inaction
or indifference, effectively allow and even encourage it to continue.
One particularly egregious example comes from a client of mine, an urgent care physician. He
regularly sees Medicaid patients arrive at hospitals in luxury vehicles—cars that clearly suggest
a lifestyle inconsistent with reported low income. This physician has written to the governor’s
office and state senators more than 16 times to express his concern, but has never received a
single response. That silence speaks volumes about the priorities of our political system.

A Balanced, Fair Approach to Reform: This Is Not a Call to Cut Benefits for the Truly Eligible
Let me be absolutely clear: this is not a call to cut off benefits for those who are genuinely
eligible. The elderly, physically challenged, and low-income individuals who rely on Medicare
and Medicaid should never be penalized. These programs exist for their protection and should
remain strong and accessible for those in real need.
What I am calling for is a smarter, fairer, and more accountable system that:
 Stops relying solely on W-2s for income verification and begins assessing full financial
profiles, including lifestyle indicators like vehicle ownership, housing, and discretionary
spending.
 Conducts in-person interviews for applicants whose reported income doesn’t align with
their living conditions.
 Uses data-matching across state and federal agencies to identify inconsistencies
between reported income and actual financial behavior.

 Holds employers accountable who intentionally underreport wages or enable workers
to commit fraud—but also protects employers who are coerced into unethical practices
by a broken hiring environment.
 Launches awareness campaigns to help small businesses understand their rights and
responsibilities when navigating employee wage requests that conflict with tax and
labor laws.

A Proposal for Those Who’ve Paid into the System
We also need to better support those who have spent their lives working, paying into the
system, and now rely on limited fixed incomes. Seniors who depend solely on Social Security
and small pensions should not face financial burdens for basic medical care. I propose that
prescription drugs for these individuals be provided without copays, as a matter of fairness and
respect for their lifelong contributions.

Conclusion
Medicare and Medicaid are at a crossroads. Without reform, they will continue to be
undermined by fraud and abuse—while the truly deserving face growing uncertainty. The
political will to change the system must match the seriousness of the problem. It’s time for
policymakers to stop turning a blind eye and take decisive action. The health of the
system—and the integrity of public trust—depends on it.

Medicare at a Crossroads: A CPA’s Perspective on Preventing Abuse and Ensuring Integrity