Vice President JD Vance, seen here on January 9, 2026, announced on Wednesday that the Trump administration was suspending Medicaid payments to Minnesota over alleged fraud. File Photo by Bonnie Cash/UPI | License Photo
The Trump administration announced Wednesday it is pausing more than a quarter-billion dollars in Medicaid payments to Minnesota over alleged fraud, a move state officials called the latest act of political retribution against a Democratic-led state.
“We are going to start very aggressively in the administration cracking down on people and the organizations that are defrauding Americans,” Vice President JD Vance said Wednesday while announcing the move at a White House press conference alongside Centers for Medicare and Medicaid Services Administrator Mehmet Oz.
“So, we’re announcing today that 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 of Minnesota takes its obligations seriously to be good stewards of the American people’s tax money.”
Oz said it was the first time the federal government has taken this kind of action against a state. The amount of Medicaid funding being deferred was $259 million, based on an audit of the last months of last year.
“This quarter-billion dollar deferment is hopefully going to get on the radar screen for that state of Minnesota and make sure they are responsive to our requests,” he said.
The funds will only be released after Minnesota proposes and acts “on a comprehensive action plan to solve the problem,” he added.
“Gov. Walz has 60 days — 60 days, sir — to respond to our letter.”
Gov. Tim Walz lashed out at the Trump administration, saying the withholding of funds “has nothing to do with fraud.”
“This is a campaign of retribution. Trump is weaponizing the entirety of the federal government to punish blue states like Minnesota,” he said in a statement.
“These cuts will be devastating for veterans, families with young kids, folks with disabilities and working people across our state.”
Since returning to office in January, President Donald Trump has escalated federal scrutiny of the state led by Gov. Tim Walz, who ran on the Democratic ticket against Trump in the 2024 election. Trump’s administration has launched a criminal investigation into Walz and Minneapolis Mayor Jacob Frey, filed several federal civil lawsuits against its policies and deployed thousands of federal immigration agents to the Twin Cities for an operation during which two U.S. citizens were killed.
The Trump administration has focused on fraud in the state in recent months that it ties to the state’s Somali community amid its aggressive immigration crackdown.
In 2022, during the Biden administration, the Justice Department filed charges against 47 people, some originally from Somalia, on allegations of defrauding the government of $250 million in what federal prosecutors called the largest COVID-19 fraud scheme.
In September, the Trump administration announced charges against one person in a $14 million fraud scheme involving an autism program, and six additional defendants were charged in December.
The announcement came the same day Minnesota Attorney General Keith Ellison unveiled legislation to bolster the state’s fight against Medicaid fraud.
If passed, the bill will add an additional 18 staff to its Medicaid Fraud Control Unit, make it easier for prosecutors to go after alleged fraudsters and make other changes, he said.
It also comes after Trump anointed Vance to lead his “war on fraud.”
“He’ll get it done,” Trump said. “Find enough of that fraud and we’ll actually have a balanced budget overnight.”
During his speech, Trump also alleged that Minnesota’s Somali community has “pillaged an estimated $19 billion from the American taxpayer.”
“The Somali pirates who ransacked Minnesota remind us that there are large parts of the world and lawlessness are the norm, not the exception,” he said.
According to Minnesota statistics, nearly 1.3 million people in Minnesota are on Medicaid or MinnesotaCare.
