Vice President JD Vance announced that the Trump administration was “temporarily” halting “certain amounts of Medicaid funding” to Minnesota, until the government learns “to be good stewards” of taxpayer money.
Vance made the revelation during a press conference on Wednesday regarding Medicare and Medicaid fraud, with Medicare & Medicaid Services Administrator Mehmet Oz. Vance spoke about how the Trump administration was going to “start very aggressively” cracking down on people and organizations “defrauding Americans.”
Oz confirmed that there would be roughly $259 million “deferred payments for Medicaid” to Minnesota.
“We’re announcing today, that 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.
Vance continued to explain that this “means” that while providers in the state have “already been paid,” the federal government was halting “federal payments that will go to the state government” until Minnesota “takes its obligations seriously” to stop the ongoing fraud.
“One of the examples of fraud that we’ve seen in Minnesota, that we verified that is just awful, is that a program that existed to ensure that autistic children had access to some after school services, has made a number of people rich,” Vance explained. “Not by providing services to needy children, but by allowing fraudsters to take money that ought-by-right go to American citizens, and to American families, and to set up sham businesses, set up sham clients, set up people who are not even autistic but claim to be autistic in order that they benefit from the money that’s out there.”
The announcement from Vance comes after a report from the City Journal in November that revealed that “federal counterterrorism sources” confirmed that the Somali community in the state was sending “millions of dollars in stolen funds” back to Somalia. The stolen funds were also reported to be ending up “in the hands of the terror group Al-Shabaab”
In many cases, the fraud has allegedly been perpetrated by members of Minnesota’s sizeable Somali community. Federal counterterrorism sources confirm that millions of dollars in stolen funds have been sent back to Somalia, where they ultimately landed in the hands of the terror group Al-Shabaab. As one confidential source put it: “The largest funder of Al-Shabaab is the Minnesota taxpayer.”
The report also noted that the state’s Medicaid Housing Stabilization Services program was initially created “with a noble goal” to help seniors and people struggling with addition, among others. However, “costs quickly spiraled out of control”:
If you were to design a welfare program to facilitate fraud, it would probably look a lot like Minnesota’s Medicaid Housing Stabilization Services program. The HSS program, the first of its kind in the country, was launched with a noble goal: to help seniors, addicts, the disabled, and the mentally ill secure housing. It was designed with “low barriers to entry” and “minimal requirements for reimbursement.” Nonetheless, before the program went live in 2020, officials pegged its annual estimated price tag at $2.6 million.
Costs quickly spiraled out of control. In 2021, the program paid out more than $21 million in claims. In the following years, annual costs shot up to $42 million, then $74 million, then $104 million. During the first six months of 2025, payouts totaled $61 million.
The announcement that certain amounts of Medicaid funding to Minnesota was being halted comes after the Department of Health and Human Services (HHS) informed the state in January “that it would withhold about $515 million in federal Medicaid matching funds going forward on a quarterly basis,” according to Axios.
