First a brief description covering the difference between Medicare and Medicaid. Medicare is for the old and disabled, regardless of income. Medicaid is for the poor. Medicare has its rates set by the Feds and is paid directly out of Federal coffers. Medicaid also has its rates set by the Feds, but the payments come from the States (or from cities, with States making a contribution.)

If a Doctor is defrauding the system, he's usually doing it one of three ways:

  1. He really sees the patient and provides a service...but he bills for a higher level of service or more services than he actually delivered.
  2. He invents patients and bills for service that never was given.
  3. Kickback schemes.  

Sometimes it is the patient defrauding the system...and the doctor knows nothing about it. The most common occurrence is when someone with coverage (and a card) lends his card to somebody else and that somebody else gets treated.

No matter what the fraud, however, these benefits are paid out of Federal or State budgets, and THOSE are funded by taxes.

Who pays the taxes? YOU DO.