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Trump Administration Halts Medicaid Funding to Minnesota Over Fraud Concerns
Vice President JD Vance announced Wednesday that the Trump administration is temporarily suspending certain Medicaid payments to Minnesota, giving Democratic Governor Tim Walz 60 days to address what officials describe as widespread fraud in the state’s healthcare program.
“We have decided to temporarily halt certain amounts of Medicaid funding that are going to the state of Minnesota in order to ensure that the state takes its obligations seriously to be good stewards of the American people’s tax money,” Vance said at a press event alongside Mehmet Oz, administrator for the Centers for Medicare & Medicaid Services (CMS).
The announcement follows President Donald Trump’s direct criticism of fraud in Minnesota during his State of the Union address Tuesday evening. The administration and Congress have increasingly focused on alleged misuse of federal funds in Minnesota since December 2025, when details of fraud in social welfare programs dating back to the COVID-19 pandemic first gained national attention. Investigators estimate the total fraud could exceed $9 billion.
According to Oz, the action represents “the largest action against fraud” ever taken by CMS. The agency is deferring $259 million in Medicaid payments to Minnesota based on an audit of the last quarter of 2025.
“Restated, a quarter billion dollars is not going to be paid this month to Minnesota for its Medicaid claims,” Oz explained. “We will give them the money, but we’re going to hold it and only release it after they propose and act on a comprehensive corrective action plan to solve the problem.”
If Minnesota fails to implement adequate reforms, Oz warned that deferred payments could accumulate to $1 billion this year. The state now has 60 days to respond to a formal letter from CMS outlining the required actions.
Vance highlighted a particularly troubling example of mismanagement: a program intended to provide after-school care for autistic children that reportedly benefited fraudsters instead of its intended recipients.
“A lot of people are getting rich off the generosity of American taxpayers,” Vance said. “But more fundamentally, it means that there are kids in Minnesota who deserve these services, who need these services, and they’re not going to those kids. They’re going to fraudsters in Minneapolis. That is unacceptable.”
While Fox News Digital reached out to Governor Walz’s office for comment but received no reply by press time, Oz expressed confidence that the state would address the issues seriously. He also noted that fraud problems are not unique to Minnesota.
“These schemes disproportionately involve immigrant communities,” Oz said. “They’re insulated, they’re able to organize efforts, and sometimes they don’t understand what’s going on.”
The action represents a significant escalation in the administration’s self-described “war on fraud,” which Trump highlighted during his State of the Union address. During the speech, the president specifically mentioned that “members of the Somali community have pillaged an estimated $19 billion from the American taxpayer” in Minnesota.
Trump went further, claiming that “California, Massachusetts, Maine and many other states are even worse,” and named Vice President Vance as the administration’s point person on combating fraud.
The suspension of Medicaid funding signals the administration’s aggressive approach to tackling alleged misuse of federal dollars. Vance emphasized that the action was reluctant but necessary due to Minnesota being “careless with federal tax dollars.”
“All we need the governor and the administration of Minnesota to do is something quite simple, which is to show that before you give Medicaid funds to somebody, you’re taking seriously whether they provided the services that they say that they’re providing,” Vance said, calling the alleged fraud a “disgrace.”
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9 Comments
Interesting development on the fraud crackdown in Minnesota. I wonder if the 60-day deadline will lead to meaningful reforms or just be a political show. It’s important to ensure taxpayer funds are used properly, but the details will be key here.
Fraud and mismanagement of public funds are serious issues that need to be addressed. However, I’m a bit skeptical of the administration’s tactics here. A 60-day deadline seems rushed, and I worry about the impact on healthcare access if not handled carefully.
It’s alarming to hear about such large-scale fraud allegations. While I’m glad the administration is cracking down, I hope they pursue a fair and constructive process that prioritizes fixing the problems rather than political grandstanding.
This seems like a high-stakes showdown between the federal government and Minnesota. I’ll be watching closely to see if the 60-day deadline leads to real systemic changes or just a temporary Band-Aid. Transparency and accountability should be the top priorities.
It’s disappointing to see such widespread fraud allegations in Minnesota’s social welfare programs. Misuse of public funds erodes trust and hurts the vulnerable people these programs are meant to serve. I hope the state can get this sorted out efficiently.
This puts Minnesota in a tough spot. They need to prove they can properly manage Medicaid funds, but sudden loss of funding could create real healthcare access issues. Hopefully there’s room for compromise while still driving necessary changes.
This is a complex issue without easy answers. On one hand, fraud is unacceptable and taxpayers deserve assurance their money is being used properly. But disrupting Medicaid funding could have severe consequences for vulnerable Minnesotans. I’ll be following this closely to see how it unfolds.
Halting federal Medicaid funding seems like a drastic step, but the administration clearly feels the state has not done enough to address the fraud concerns. This could create real hardship if not resolved quickly. I’ll be watching to see how Governor Walz responds.
$9 billion in alleged fraud is a staggering amount. I hope the state can get to the bottom of this and implement stronger controls to prevent misuse of Medicaid funds going forward. Tough measures may be needed, but they need to be fair and effective.