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Vice President JD Vance announced Wednesday that the Trump administration is temporarily halting Medicaid funding to the state of Minnesota, giving Democratic Minnesota Gov. Tim Walz 60 days to clean up how the state doles out funding.
“We have decided to temporarily halt certain amounts of Medicaid funding that are going to the state of Minnesota in order to ensure that the state of Minnesota takes its obligations seriously to be good stewards of the American people’s tax money,” Vance said Wednesday in a press event attended by Administrator for the Centers for Medicare & Medicaid Services Mehmet Oz.
The announcement comes after President Donald Trump railed against fraud in the Gopher State Tuesday evening in his State of the Union address. Minnesota has been rocked by alleged fraud surrounding social programs and welfare programs stretching back to the COVID-19 pandemic that investigators estimate could top $9 billion.
Trump pointed to his vice president as leading the administration’s “war on fraud” amid his State of the Union remarks.
Vice President JD Vance, alongside Medicare and Medicaid Administrator Mehmet Oz, speaks about combatting fraud Feb. 25, 2026. (Oliver Contreras / AFP via Getty Images)
Vance explained Wednesday that “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 continued that officials have verified that a program in Minnesota intended to provide after-school care to autistic children actually benefited fraudsters.
“A lot of people are getting rich off the generosity of American taxpayers,” Vance said. “But more fundamentally, and more importantly than that, it means that there are kids in Minnesota who deserve these services, who need these services, and they’re not going to those kids. They’re going to fraudsters in Minneapolis. That is unacceptable. And that’s the sort of thing that we’re cutting off with this action today.”
Sen. Joni Ernst named Gov. Tim Walz the recipient of her monthly “Squeal Award” for the sweeping Minnesota fraud scandal. (Jim Vondruska/Getty Images)
Oz added that it is that the pause marks “the largest action against fraud that we’ve ever taken” at the Centers for Medicare & Medicaid Services, before launching into how the administration is deferring funds to the state.
HEAVILY-REDACTED AUDIT FINDS MINNESOTA MEDICAID HAD WIDESPREAD VULNERABILITIES
“It’s going to be $259 million of deferred payments for Medicaid to Minnesota, which we’re announcing as I speak, to Governor Walz and his team,” Oz said. “That’s based on an audit of the last three months of 2025. Restated: a quarter billion dollars is not going to be paid this month to Minnesota for its Medicaid claims.”
“We have notified the state and said that we will give them the money, but we’re going to hold it and only release it after they propose and act on a comprehensive corrective action plan to solve the problem,” Oz said. “If Minnesota fails to clean up the systems, the state will rack up $1 billion of deferred payments this year.”
Walz has 60 days to respond to a letter Oz and the administration sent to Walz on the matter, Oz said.
Fox News Digital reached out to Walz’s office Wednesday afternoon for comment and has yet to receive a reply.
Oz continued that he believes Walz will take the matter seriously, and noted fraud is not exclusive to Minnesota, but also other states.
Centers for Medicare and Medicaid Services Administrator Mehmet Oz attends a press conference at the U.S. Department of Justice in Washington, D.C., on June 30. (Kevin Dietsch/Getty Images)
“These schemes disproportionately involve immigrant communities,” Oz continued. “They’re insulated, they’re able to … organize efforts, and sometimes they don’t understand what’s going on.”
Vance added that the administration does not want to make this move, but it is needed due to Minnesota being “careless with federal tax dollars.”
“All we need the governor and the administration of Minnesota to do is something quite simple, which is to show that before you give Medicaid funds to somebody, you’re taking seriously whether they provided the services that they say that they’re providing,” the vice president said, calling the fraud a “disgrace.”
MINNESOTA DEMOCRATS DEMAND REPARATIONS FROM ICE AFTER LOSING $18 BILLION TO SOMALI FRAUD
Trump spotlighted the fraud in his State of the Union address Tuesday, underscoring that while Minnesota has taken the spotlight, schemes run deep in other states as well.
President Donald Trump warned during his State of the Union speech about Iran’s nuclear program. (Kenny Holston/The New York Times via AP)
“When it comes to the corruption that is plundering — it really, it’s plundering America — there’s been no more stunning example than Minnesota, where members of the Somali community have pillaged an estimated $19 billion from the American taxpayer,” Trump said. “Oh, we have all the information.”
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“And in actuality, the number is much higher than that, and California, Massachusetts, Maine and many other states are even worse. This is the kind of corruption that shreds the fabric of a nation, and we are working on it like you wouldn’t believe,” he continued, before naming Vance as the administration leader taking on fraud.
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