Latest: Trump Administration Pauses $259 Million in Minnesota Medicaid Funding
The Trump administration announced the latest federal action to halt $259 million in Medicaid payments to Minnesota, citing alleged fraud in the state’s social services system. The move, made public a day after the president tasked Vice President JD Vance with waging a “war on fraud, ” places a 60-day deadline on state officials to craft a corrective plan before funds can be restored.
Latest: Vice President JD Vance Announcement
Vice President JD Vance said Wednesday that the $259 million in federal Medicaid payments will be paused "until the state government takes its obligations seriously to stop the fraud that’s being perpetrated against the American taxpayer. " He framed the pause as aimed at protecting access for eligible Minnesotans and said the main reason for the action was to ensure residents "have access to the services that they’re entitled to. " The administration characterized the funding as federal dollars that help provide health insurance for low-income people.
Dr. Mehmet Oz on Minnesota Medicaid 'scammers' and corrective plan
Dr. Mehmet Oz, administrator for the Centers for Medicare and Medicaid Services, said officials had identified what he called "scammers" who "hijacked … a certain part of the Minnesota Medicaid system, " and indicated more actions may follow. Oz suggested the government will release the frozen funds only after Minnesota proposes "a comprehensive corrective action plan to solve the problem, " and he set a 60-day window for Gov. Tim Walz, D-Minn., to respond. Oz also said the top fraudulent biller in the state "submitted 450 days where they claim they were working more than 24 hours a day, " though the administration did not provide corroborating documentation of that claim on Wednesday.
Federal prosecutions show more than $1 billion in social services fraud
Federal prosecutors have confirmed large-scale social services fraud in Minnesota, resulting in convictions of dozens of people for stealing more than $1 billion in funds meant for food, housing and services for people with disabilities. Many of those convicted were identified as Somali. Officials noted that those prosecutions involved programs outside the specific Medicaid allegations cited by administrators on Wednesday, and the administration did not present detailed evidence on the alleged large-scale Medicaid fraud that Dr. Oz described.
Earlier freezes: $185 million in child care funds and $10 billion across five states
The Medicaid pause follows earlier federal actions targeting Minnesota. In December, federal officials froze $185 million in child care funds directed to the state. Last month, the administration announced it was freezing $10 billion in social services funding across five Democratic-led states, a group that includes Minnesota. Officials signaled that similar measures could be announced for other states in the near term, mentioning Florida, New York and California as potential future actions.
KFF data on Minnesota Medicaid enrollment and state impact
KFF data show Medicaid covers nearly 1. 2 million kids and adults in Minnesota. More than half of those enrollees are nursing home residents, and more than three-quarters of enrollees in the state are working full time. Officials emphasized that the pause is intended to target program leadership and management rather than the people served by Medicaid; Dr. Oz said, "This is not a problem with the people of Minnesota. It's a problem with the leadership of Minnesota and other states who do not take Medicaid preservation seriously. " He also asserted that "these schemes disproportionately involve immigrant communities, " while noting generally that undocumented people are not eligible to enroll in Medicaid.
Vance referenced a program he said claimed to offer after-school services to autistic children but did not provide identifying details about that program. The administration’s public statements on Wednesday included several specific allegations and prior prosecution figures, but officials did not release supporting documentation for the newly asserted Medicaid billing fraud. In a post on X on Wednesda, unclear in the provided context.
What makes this notable is the combination of an immediate funding freeze of $259 million, a 60-day corrective-action deadline for Gov. Tim Walz and prior freezes of $185 million and $10 billion in related programs—steps that together create pressure on state leadership to respond quickly or risk prolonged disruption to services for roughly 1. 2 million Minnesotans who rely on Medicaid.
