The Trump administration just cut off $259 million in Medicaid payments to Minnesota, claiming it’s about fighting fraud—even though Trump’s own $19 billion fraud figure for the state lacks evidence.
Vice President JD Vance, freshly assigned to lead Trump’s “war on fraud,” announced the suspension Wednesday alongside Mehmet Oz, who now runs the Centers for Medicare & Medicaid Services. The move withholds federal reimbursements Minnesota is owed, money the state has already spent on healthcare for veterans, families with kids, people with disabilities, and working Minnesotans.
“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 obligation seriously to be good stewards of the American people’s tax money,” Vance said.
Governor Tim Walz—who was the Democratic vice presidential nominee in 2024 and remains a favorite punching bag for the White House—didn’t mince words in his response.
This has nothing to do with fraud.
— Governor Tim Walz (@GovTimWalz) February 25, 2026
The agents Trump allegedly sent to investigate fraud are shooting protesters and arresting children. His DOJ is gutting the U.S. Attorney’s Office and crippling their ability to prosecute fraud. And every week Trump pardons another fraudster. https://t.co/DKRDgBykRu
“This has nothing to do with fraud,” Walz wrote on Twitter. “The agents Trump allegedly sent to investigate fraud are shooting protesters and arresting children. His DOJ is gutting the U.S. Attorney’s Office and crippling their ability to prosecute fraud. And every week Trump pardons another fraudster.”
The actual numbers tell a different story than Trump’s State of the Union claims. The Justice Department has charged 98 people in Minnesota—85 of them Somali—with $1 billion in fraud related to day care centers. That’s a lot of money, but it’s roughly 5% of the $19 billion Trump attributed to Minnesota and its Somali community during his speech Tuesday night.
Oz said Minnesota has 60 days to submit a “comprehensive corrective action plan” or face up to $1 billion in deferred payments this year. He dismissed concerns about people losing access to care, suggesting Minnesotans should “call your governor” and pointing to the state’s rainy-day fund.
When NBC News asked whether the administration actually has the legal authority to withhold funds Congress already appropriated, Vance said he was “quite confident” they do. His reasoning: “We’re the ones who spend this money.”
That’s a creative interpretation of how federal spending works.
Vance was notably vague about how much money this “war on fraud” might actually recover. “We know that it’s billions and billions of dollars that should go to American citizens,” he said. He also couldn’t commit to a timeline beyond saying the administration would “run at this” for the next year, but it “won’t stop after a year.”
The timing is convenient. Walz ran against Vance for vice president. Minnesota is a Democratic stronghold. And Trump’s State of the Union singled out other blue states—California, Maine, Massachusetts—as future targets.
Vance heads to Wisconsin Thursday for post-State of the Union remarks, continuing his role as the administration’s traveling salesman while building his portfolio for 2028.