A simpler way to put this is that we spend a lot of money making sure only those judged deserving are helped.
From my perspective, the only three things I've done in my life that were more paperwork intensive than being a patient in the American healthcare system were to apply for a security clearance, buy real estate, and adopt
Being very ill in America invokes a messy, complex, internally inconsistent system that requires a lot of focus and precision at a time in most people's lives when they are least equipped to provide those things. If indeed, ever they were. Not everyone is good at paperwork. And this is me, who is not dealing with public benefits and all their myriad oversight requirements, but rather a relatively sane and generous employer and employer-sponsored private benefits plan.
So let's assume a certain number of claimants are fraudulent. That's true in every walk of life with every kind of benefit — someone will always be trying to figure out a way to get something for nothing.
What would happen if we simply let those people into the system? If, instead of spending money on compliance we spent that same money on delivery? Would net costs go up or down?
We'd certainly have a system that is much kinder and more supportive to the overwhelming majority of users, its legitimate patients. Instead of punishing the users along with the fraudsters, let's keep things simple for the people in most desperate need.
Would that cost more or less? I have no idea. But it would be the mark of a compassionate society that values life, liberty and the pursuit of happiness over punishing the undeserving and deserving alike.