Trump administration withheld $259 million in Medicaid payments from Minnesota over alleged fraud
Minnesota Governor Tim Walz accused administration of political retribution against Democratic states
Administration announced nationwide six-month moratorium on durable medical equipment suppliers
Trump created new position to lead 'war on fraud' targeting federal programs
📖 Full Retelling
The Trump administration announced in Washington on February 25, 2026, that it is withholding $259 million in Medicaid payments from Minnesota, alleging the state allowed the theft of federal funds intended for social-welfare programs, with Vice President JD Vance and Dr. Mehmet Oz citing a COVID-19 pandemic scandal where $250 million was allegedly defrauded from a federally funded child nutrition program. The officials made the announcement during a joint press conference where they criticized Minnesota Governor Tim Walz's administration for not doing enough to combat fraud, with Oz stating the funds would be held until the state proposes a comprehensive corrective action plan within 60 days. Vance declared that federal payments would continue to be withheld until 'the state government takes its obligations seriously.'
Governor Walz immediately responded on social media, accusing the administration of attempting to punish Democratic-run states. 'This has nothing to do with fraud,' he posted on X. 'This is a campaign of retribution. Trump is weaponizing the entirety of the federal government to punish blue states like Minnesota.' The Democratic governor warned that the funding halt would be devastating for families, veterans, and people with disabilities in his state. The Trump administration has used fraud allegations in Minnesota as justification for its immigration crackdown in the state, during which federal agents shot and killed two U.S. citizens, and for freezing funds meant for social programs.
The officials also announced a six-month nationwide moratorium blocking durable medical equipment suppliers from enrolling in Medicaid, claiming such suppliers have become a source of fraud. Oz cited an estimate from the non-profit Kaiser Family Foundation that $300 billion a year is spent nationwide on healthcare that is 'fraudulent, abusive or wasteful,' with the federal portion around $100 billion. He indicated the administration would soon announce additional actions targeting other states, specifically mentioning issues with healthcare fraud in southern Florida, California, and New York. President Trump has tapped Vice President Vance to spearhead an administration 'war on fraud' and created the new role of assistant attorney general for national fraud enforcement to lead the Justice Department's investigation and prosecution of fraud affecting federal programs.
🏷️ Themes
Healthcare Fraud, Federal-State Relations, Political Retaliation
Minnesota is a state in the Upper Midwestern region of the United States. It is bordered by the Canadian provinces of Manitoba and Ontario to the north and east and by the U.S. states of Wisconsin to the east, Iowa to the south, and North Dakota and South Dakota to the west. The northeast corner has...
In the United States, federal assistance, also known as federal aid, federal benefits, or federal funds, is defined as any federal program, project, service, or activity provided by the federal government that directly assists domestic governments, organizations, or individuals in the areas of educa...
Medicaid is a government program in the United States that provides health insurance for adults and children with limited income and resources. The program is partially funded and primarily managed by state governments, which also have wide latitude in determining eligibility and benefits, but the f...
In law, fraud is intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to thwart the fraud or recover monetary compensation) or criminal law (e.g., a fraud perpetrato...
try{ var _=i o; . if(!_||_&&typeof _==="object"&&_.expiry Nvidia, Salesforce earnings; U.S.-Iran nuclear talks - what’s moving markets Nvidia shares edge up as cash return questions remain despite revenue outlook beat Nvidia’s results beat estimates, but Wall Street wants more cash return Nasdaq ends more than 1% higher as Nvidia rises pre-earnings, tech extends rebound (South Africa Philippines Nigeria) US halts some Medicaid payments to Minnesota, alleging fraud By Reuters Politics Published 02/25/2026, 04:58 PM Updated 02/26/2026, 04:48 AM US halts some Medicaid payments to Minnesota, alleging fraud 0 By Andrea Shalal and Ryan Patrick Jones WASHINGTON, Feb 25 - The Trump administration is withholding more than a quarter of a million dollars of Medicaid funding from Minnesota, saying the state allowed the theft of federal funds intended for social-welfare programs in the state. U.S. Vice President JD Vance and Dr. Mehmet Oz, who oversees the Medicaid healthcare program for low-income households, announced the temporary halt at a joint press conference on Wednesday, where they criticized Minnesota Governor Tim Walz’s administration for not doing enough to combat fraud. "We are stopping the federal payments that will go to the state government until the state government takes its obligations seriously," Vance said. Walz fired back on social media, accusing the administration of attempting to punish Democratic-run states. "This has nothing to do with fraud," he said in a post on X. "This is a campaign of retribution. Trump is weaponizing the entirety of the federal government to punish blue states like Minnesota." Republican President Donald Trump’s administration has used fraud allegations in Minnesota as part of its justification for a months-long immigration crackdown in the state, during which federal agents shot and killed two U.S. citizens, and for freezing funds meant for social programs. Administration officials have pointed to a scandal that began during the...
