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JD Vance announced on Wednesday that the Trump administration would “temporarily halt” more than a quarter-billion dollars in Medicaid reimbursements to the state of Minnesota, escalating Donald Trump’s newly announced “war on fraud”.
Vance said the action was to ensure Minnesota was “a good steward of the American people’s tax money”, part of its crackdown on the state following a fraud scandal linked to residents of the Somali community in Minneapolis, which prompted the administration to send thousands of federal immigration agents into Minneapolis and that resulted in the deaths of two US citizens and widespread protests.
“What we’re doing is we are 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,” the vice-president said at a press conference in Washington, where he was joined by Mehmet Oz, administrator of the Centers for Medicare & Medicaid.
Oz said it was the first time the government had taken such an action against a state. “It’s unponderable that you would take advantage of these precious programs,” he said, adding that while Minnesota was first, other states would be next.
Oz also announced that the administration was imposing a six-month national moratorium on federal funding for people who need durable medical equipment, including prostheses and orthotics. New enrollments for federal funds for such devices would be halted due to concerns about benefit fraud, he said.
Medicaid, the nation’s healthcare safety net for low-income Americans, serves more than 70 million people, including children, pregnant women, older adults and people with disabilities. Minnesota’s Medicaid and MinnesotaCare programs provide healthcare coverage for nearly 1.3 million people in the state, or roughly one in four Minnesotans.
“This has nothing to do with fraud,” Minnesota governor Tim Walz, a Democrat, responded on X. “The agents Trump allegedly sent to investigate fraud are shooting protesters and arresting children. His DOJ is gutting the US Attorney’s Office and crippling their ability to prosecute fraud. And every week Trump pardons another fraudster.”
The Trump administration has aggressively targeted Minnesota after a sprawling fraud scandal involving the state’s social service programs. Federal prosecutors estimate as much as $9bn has been stolen across schemes linked to the state’s Somali population. Dozens of people were charged with fraud in 2022, during the Biden administration, by a team of federal prosecutors in Minnesota led by Joseph Thompson and Harry Jacobs.
Thompson and Jacobs were among the federal prosecutors who resigned in January after senior justice department officials pressed them to open a criminal investigation into the actions of the widow of Renee Good, the Minneapolis woman shot and killed by an ICE officer.
Vance suggested that if the state was worried about the impact on services and low-income residents, it needed to cooperate with the federal government.
“The main reason that we’re doing this is that we want to make sure that the people of Minnesota have access to the services that they’re entitled to,” he said.
The Republican vice-president, who is likely to run for president in two years, also made it clear that he hopes residents of the state will blame the state’s Democratic leaders for the withheld funding.
“What I would say to the people of Minnesota is: we want to do right by you; we think you deserve better public services; we think you deserve to have the benefits that you’re actually entitled to,” Vance said. “And we encourage everybody in Minnesota, whatever their political affiliation, to work on the state government a little bit, because if we had some better cooperation we could have commonsense immigration enforcement. We could also have less money going to fraudsters.”
During the State of the Union address on Tuesday, Trump singled out Minnesota as a “stunning example” of the fraud he claimed was rampant in blue states and placed Vance in charge of what he branded the administration’s “war on fraud”.
Using xenophobic language, he disparaged Somali Americans as “pirates who ransacked” the state. Ilhan Omar, a Somali-born representative from Minnesota, shouted back: “That’s a lie!”
Wednesday’s announcement suggests the administration will continue to find ways to target Minnesota and other blue states.
Last month, Oz visited Los Angeles and filmed a video alleging, without evidence, that the “Russian-Armenian” mafia was behind a large-scale hospice and healthcare fraud scheme. The social media post set off a days-long public quarrel that culminated in the state filing a civil rights complaint against Oz, whose parents emigrated to the US from Turkey.
