Trump Administration Withholds $259 Million in Medicaid Funds from Minnesota

The Trump administration announced on February 25, 2026, that it is temporarily withholding $259 million in federal Medicaid reimbursements from Minnesota over allegations of widespread fraud and mismanagement in the state's program. Vice President JD Vance, who chairs a White House anti-fraud task force, and Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, made the disclosure during a press conference at the Eisenhower Executive Office Building in Washington.

The decision halts federal payments to the state while providers have already received compensation from state funds, giving Minnesota 60 days to address the concerns. Federal officials cited improper payments and insufficient oversight as key issues, including schemes where individuals allegedly created sham businesses and enrolled ineligible clients, such as falsely claiming children had autism to access after-school services. "We're stopping the federal payments that will go to the state government until the state government takes its obligations seriously to stop the fraud that's being perpetrated against the American taxpayer," Vance said.

Oz highlighted specific examples uncovered by...