Policymakers considering the creation of a health insurance “public option,” or even an expansion of Medicare, should remember that government health programs already wear a bullseye when it comes to fraud and abuse. According to a report on CNN.com, organized crime has found a cash cow in Medicare and Medicaid.

The Washington Post reports on the curious case of David W. Wilmot, a D.C. lobbyist who also earns $300,000 a year as the head of a troubled nonprofit group that’s funded by Medicaid. D.C. officials have asked a judge to put two of the nonprofit’s group homes in receivership and halt all referrals to its eleven facilities because of “systemic” problems.

In 1798, President John Adams signed a law that required the owners of American ships to withhold 20 cents a month for each crewman’s pay and to forward the money to customs offices in various ports. Customs officers were required to forward the money to the secretary of the Treasury, who would use the money to pay the hospital bills of ailing sailors. The funding also supported a network of marine hospitals.

Sometimes it’s hard to figure out which is more infuriating for taxpayers: illegal fraud in a government program, or legal abuse of that program. The State of New York recently took $140 million in federal “stimulus” money and handed it out with no strings attached to people on welfare for the ostensible purpose of back-to-school needs.