Vice-President JD Vance announced on Wednesday that the Trump administration would temporarily withhold more than a quarter-billion dollars in Medicaid reimbursements from Minnesota, escalating what he called a ‘war on fraud’. The move aims to ensure the state is a ‘good steward’ of federal funds, following a fraud scandal linked to the Somali community in Minneapolis.
Joined by Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, Vance said the payments would be suspended until Minnesota addresses fraud. Oz called it the first action of its kind against a state and warned others would follow. He also announced a six-month national moratorium on federal funding for durable medical equipment, citing benefit fraud concerns.
Minnesota Governor Tim Walz criticised the decision, writing on X: ‘This has nothing to do with fraud. The agents Trump allegedly sent to investigate fraud are shooting protesters and arresting children.’ He accused the administration of undermining fraud prosecution efforts.
The administration has targeted Minnesota after prosecutors estimated up to $9bn was stolen in schemes linked to the Somali population. Dozens were charged in 2022 under the Biden administration, but the Trump administration has pressed for further action, leading to resignations of federal prosecutors.
Vance urged Minnesota residents to press their state government for cooperation, saying: ‘We want to do right by you; we think you deserve better public services.’ The announcement follows President Trump’s State of the Union address, where he singled out Minnesota and used xenophobic language against Somali Americans.
