On July 22, 2026, the Trump administration announced it will withhold over $1 billion in federal Medicaid funds from California and Minnesota due to concerns about fraud in health programs.
● The Centers for Medicare and Medicaid Services (CMS) deferred $867.5 million in payments to California and $199 million to Minnesota.
● This decision follows financial reviews that uncovered unverifiable claims, especially in in-home care programs.
● Critics argue this federal scrutiny targets Democrat-led states known for loose management of Medicaid funds.
● Minnesota has faced increased federal scrutiny this year, linked to issues of fraud control.
● CMS Administrator Mehmet Oz emphasized that this action is meant to protect taxpayer dollars and not to penalize states.
● The Department of Health and Human Services plans to strengthen its ability to remove fraudulent providers from federal health programs permanently.
● This recent action follows a previous deferral of $1.3 billion in Medicaid funds from California announced in May.
The Trump administration's actions reflect a broader effort to combat fraud in Medicaid programs, particularly in states governed by Democrats.
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