Trump administration begins ‘war on fraud’ by targeting Minnesota’s Medicaid funding
The Trump administration announced Wednesday it will withhold more than $250 million in Medicaid reimbursements to Minnesota as part of a broader investigation into alleged fraud in the state.
Speaking at a news conference, Vice President JD Vance said the administration is temporarily halting certain Medicaid payments to ensure Minnesota “takes its obligation seriously to be good stewards of the American people’s tax money.”
During his State of the Union address on Tuesday, President Donald Trump declared a “war on fraud.” The funding freeze adds to an ongoing clash between the administration and Democratic Gov. Tim Walz.
Walz pushes back
Since 2021, a federal investigation brought fraud charges against close to 100 people in Minnesota, many of them Somali Americans who operated day care centers and other social service agencies.
The investigation took on new life late last December after a conservative YouTube creator posted a video in which he claimed that Somali-run day cares were receiving government money but caring for no children. Trump cited the alleged fraud when he ordered thousands of federal immigration agents into the state — a surge that was matched with widespread protests, particularly after officers shot and killed two U.S. citizens in Minneapolis.
Walz dropped his bid for a third term, saying the fraud probe had become a distraction.
He responded to Vance’s announcement about withholding Medicaid funding, posting on X that the decision has “nothing to do with fraud.”
“This is a campaign of retribution,” Walz wrote. “Trump is weaponizing the entirety of the federal government to punish blue states like Minnesota. These cuts will be devastating for veterans, families with young kids, folks with disabilities and working people across our state.”
Scope of the fraud probe
The Washington Post reported in December that Joe Thompson, a federal prosecutor in Minnesota, revealed that investigators pinpointed fraud in 14 state Medicaid programs, accounting for at least half of the $18 billion that had gone to those programs since 2018.
In January, Treasury Secretary Scott Bessent announced what he called initiatives to dismantle a fraud scheme in Minnesota. It included a probe of financial records of money service businesses operating in Minnesota as well as international financial transactions. Bessent said the goal was to “accelerate prosecutions and the recovery of laundered funds…regarding fraud in federal child nutrition programs.”
Possible effects at social service level
Medicaid is a program that allows low-income individuals to access health care and social services. It is funded both by both the state and federal governments.
Randy Anderson, an addiction counselor in Minnesota told The Post he’s been warned by state officials about a potential lengthy freeze in Medicaid reimbursement funding, which could lead to significant operational changes.
Ella Rae Greene, Editor In Chief
