Medical fraud busts reveal part of the story of homelessness in LA

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The $2 billion medical fraud bust by federal investigators in California this week lifted the lid on one of the great scandals of the homelessness crisis.

Namely: Scam artists have been luring drug addicts to California from around the country to attend “rehab” facilities that don’t actually provide treatment.

The scammers bill insurance — private or public — until the policies’ coverage runs out. Then they shove the addicts out onto the street.

That was one of the horrific and corrupt schemes uncovered this week in the federal raids and indictments. But it has been going on for many years in California.

Already, in 2017, the local media had caught onto the fact that some local rehab centers were exploiting addicts to earn cash, without helping their patients.

Obamacare actually made the exploitation easier, because the local marketplace, Covered California, made it easy for people who have just arrived in the state to sign up for insurance.

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That turned Southern California into the “Rehab Riviera.” Except there wasn’t a lot of rehab going on.

There are other reasons for the shocking rise of homelessness. And plenty of addicts have hit the streets in California without going through a phony rehab program first.

But the fact that this phenomenon has continued — almost in the open — for a decade or more is a disgrace.

It points to the problem of a large welfare state. California creates extremely generous benefits, so it attracts poor people, who make use of them.

It also attracts crooks and fraudsters who learn to use the system to enrich themselves. And the more money the government spends, the more entrenched the problem becomes. 

Some of those arrested in the medical fraud bust are accused of luring addicts to California with gifts and promises of easy drugs, making their addiction worse.

The reason LA and California generally have struggled to reduce homelessness is that our leaders have been reluctant to address these problems.

It’s easier to pretend the problem is just a lack of cheap housing, and to believe that throwing money at the problem will solve it. 

What we really need is courage — the courage to confront those who are making billons of dollars out of other people’s misery.

This week’s arrests cannot be the last. We need to uproot the fraud and corruption in the “Rehab Riviera” and stop the exploitation of addicts that keeps people on the streets.