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Entitlement fraud

This is a RUSH transcript from "The O'Reilly Factor," November 5, 2013. This copy may not be in its final form and may be updated.

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O'REILLY: "Unresolved Problems Segment" tonight, entitlement fraud by some estimates perhaps as much as 25 percent of all the tax money that federal and state governments give in entitlements to low income Americans is misused.

Recently the CBS TV station in Sacramento, California did an undercover report on food stamp fraud.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Two people both with the same idea, use Craigslist as free advertising to blatantly and illegally sell their state benefits. Our hidden cameras rolling -- a woman we'll call Lori tells our undercover producer about her brilliant idea to game the system for a quick buck.

UNIDENTIFIED FEMALE: You know everyone said I was crazy and I was like I thought people would say to me, "Oh my God that's freaking brilliant man."

UNIDENTIFIED MALE: And this guy we'll call Joe rolled up on skateboard showing us Cal fresh card he illegally put up for sale on Craigslist.

UNIDENTIFIED MALE: See, right now it still has $116 on it --

UNIDENTIFIED MALE: Rather than use that $116 bucks for food like he is supposed to, he offers to sell us the card for just $60 cash.

UNIDENTIFIED MALE: I just need the money right now I moved back in with my mom.

UNIDENTIFIED MALE: He promises to give us his pin number so we can use his card to buy groceries in any store that accepts EBT cards.

UNIDENTIFIED FEMALE: They don't check ID.

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED MALE: Joe freely admits he's done this before for family and friends. Saying don't worry we won't get caught. Lori doesn't even think what she's doing is wrong.

UNIDENTIFIED FEMALE: I feel justified in what I'm saying and what I'm doing.

UNIDENTIFIED MALE: She would use the cash for a car to get to work.

UNIDENTIFIED FEMALE: I figured it this way. They're already giving me the money, ok?

(END VIDEO CLIP)

O'REILLY: Here now with more on the fraud problem the big picture, Fox Business anchor John Stossel. So you know you could say you can make an argument while there is going to be thugs and thieves everywhere. No system is going to run perfectly. But the stats for Medicare for example are just unbelievable on how much money is being wasted.

JOHN STOSSEL, FOX BUSINESS ANCHOR: And the inspector general just came out with $29 million and drug payments to people illegally in the United States.

O'REILLY: What does that mean $29 million of drug payments?

STOSSEL: It means --

O'REILLY: Prescriptions? Bogus prescriptions.

STOSSEL: Or real prescriptions for people who weren't supposed to be reimbursed for them.

O'REILLY: Ok so people's whose income was too high to get it but they got it anyway.

STOSSEL: People are who are illegally, who are illegal aliens who are not eligible. But more relevant, $23 million for dead patients.

O'REILLY: Medicaid?

STOSSEL: Right Medicare.

O'REILLY: Medicare?

STOSSEL: $25 million more dead doctors and --

O'REILLY: What $25 million dead doctors. What does that mean?

STOSSEL: It means the doctor has this book and he says ok I treated someone for Bill O'Reilly disease and put all this in.

O'REILLY: Yes.

STOSSEL: Somebody is filling it out for the doctor who has died.

O'REILLY: So the doctor is dead.

STOSSEL: Right.

O'REILLY: Somebody is filling out forms that they have saying that he's still alive treating somebody and the money rolls in. How do they cash the check in the doctor's name?

STOSSEL: They lie about who they are.

O'REILLY: They -- so they have to have a whole ID worked up by the dead doctor and you could do that.

STOSSEL: Right you could talk with a relative of the doctor. But any of these big programs this stuff is going to happen. And HHS admits there is $60 billion. These are just millions $60 billion in fraud on Medicare.

O'REILLY: Just on Medicare?

STOSSEL: Just on Medicare.

O'REILLY: $60 billion a year.

STOSSEL: $60 billion -- fraud and waste.

O'REILLY: So if Obamacare kicks into this 30 million people getting subsidized or free you've got to assume that the same kind of situation is going to be unfolding.

STOSSEL: It's a little harder because it's insurance payments but, yes and there will be people getting fake treatments, unnecessary treatments as these programs go. At first needy people rush in and then the cheaters say hey this is a wonderful scam.

O'REILLY: Well they've got to figure out the scam. I mean they have to figure it out.

STOSSEL: It doesn't take long. And then they see their neighbors doing it. And they see yes I'm a sucker if I don't sell my stamp card.

O'REILLY: Now food stamps that exploded I mean we are up to astronomical amount Americans getting them. Is it that easy to sell your card?

STOSSEL: Apparently. And we're monitoring the situation is what they said to the CBS reporter when he asked the authorities about that.

O'REILLY: They're monitoring?

STOSSEL: They're monitoring.

O'REILLY: So if you can ride up on a skateboard and sell $116 worth of food stamps to $60 bucks a lot of people are going to take that deal.

STOSSEL: But it (inaudible) you want to cut people's food stamps? Some of the people are really needy. You don't want people to go hungry, do you?

O'REILLY: All right you are being facetious now?

STOSSEL: Not entirely because that's why it's so tough to reform these things. Lot's of -- more people cheat all the time.

O'REILLY: Right but if you go after it then you're harming the legitimate people who need them.

STOSSEL: Right.

O'REILLY: But I think there's got to be more oversight. But I do think that the -- once Obamacare kicks in the fraud is going to be massive.

John Stossel everybody.

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