Pause $1 billion Medicaid funds for California, Minnesota

The Trump administration has paused more than $1 billion in federal Medicaid funding for California and Minnesota, citing suspected fraud and a lack of documentation from the states. Health and Human Services Secretary Robert F. Kennedy Jr. announced the suspension on Tuesday, July 21, 2026, stating the funds will be withheld until the states can prove the payments are legitimate.

The action freezes approximately $867 million for California and over $200 million for Minnesota. Officials said the decision followed a quarterly audit in which the states failed to provide sufficient documentation for claims in areas identified as high-risk for fraud. Kennedy stated that the administration has a duty to stop payments, demand answers, and follow the evidence.

At a press conference alongside Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz, Kennedy said if California Governor Gavin Newsom or Minnesota Governor Tim Walz want the funding released, they must provide basic documentation showing the services are not fraudulent. Oz elaborated on specific concerns, noting that in California, a significant portion of the suspended funds-$391 million-relates to...