JD Vance says decision to halt Minnesota medicaid funds was part of Trump's 'war on fraud'

US Vice President JD Vance announced on Wednesday that US President Donald Trump’s administration is “temporarily halting” more than quarter-billion dollars in Medicaid reimbursements to the state of Minnesota . Vance emphasised that the move is part of Trump’s newly announced “war on fraud”.

The American vice president said that the action is being undertaken to ensure that Minnesota is “a good steward of the American people’s tax money”. The halting of funds is coming following a fraud scandal linked to residents of the Somali community in Minneapolis , which prompted the administration to send thousands of federal immigration agents into Minneapolis. The deployment of the agents eventually led to the deaths of two  US citizens and widespread protests.

“What we’re doing is 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 said at a press conference in Washington. He was joined by Mehmet Oz, administrator of the Centres for Medicare & Medicaid.

Why it matters

During the presser, Oz emphasised that it was the first time that the American government had taken such actions against a state. “It’s inconceivable that you would take advantage of these precious programs,” he said, adding that while Minnesota was first, other states would be next.

Oz also announced that the administration was imposing a six-month national moratorium on federal funding for people who need durable medical equipment. This includes prostheses and orthotics. He said that the new enrollments for federal funds for such devices would be halted due to concerns about benefit fraud.

It is pertinent to note that Medicaid, the nation’s healthcare safety net for low-income Americans, serves more than 70 million people. This includes children, pregnant women, older adults and people with disabilities. The state of Minnesota’s Medicaid and MinnesotaCare programs provide healthcare coverage for nearly 1.3 million people in the state, or roughly one in four Minnesotans.

“This has nothing to do with fraud,” Minnesota governor Tim Walz responded to Vance’s proclamation in a post on X. “The agents Trump allegedly sent to investigate fraud are shooting protesters and arresting children. His DOJ is gutting the US Attorney’s Office and crippling its ability to prosecute fraud. And every week, Trump pardons another fraudster," he added.

The Trump administration has been aggressively targeting Minnesota after a sprawling fraud scandal involving the state’s social service programs. Federal prosecutors estimated that as much as $9 billion has been stolen across schemes linked to the state’s Somali population.

In light of this, dozens of people were charged with fraud in 2022, during the Biden administration, by a team of federal prosecutors in Minnesota led by Joseph Thompson and Harry Jacobs. Thompson and Jacobs were among the federal prosecutors who resigned in January after senior Justice Department officials pressed them to open a criminal investigation into the actions of the widow of Renee Good, the Minneapolis woman shot and killed by an ICE officer.

Vance questions the integrity of the Minnesota government

During the presser, the vice president suggested that if the state was worried about the impact on services and low-income residents, it needed to cooperate with the federal government. “The main reason that we’re doing this is that we want to make sure that the people of Minnesota have access to the services that they’re entitled to,” he said.

Vance made it clear that he hopes the residents of the state will blame the state’s Democratic leaders for the withheld funding. “What I would say to the people of Minnesota is: we want to do right by you; we think you deserve better public services; we think you deserve to have the benefits that you’re actually entitled to,” Vance said. “And we encourage everybody in Minnesota, whatever their political affiliation, to work on the state government a little bit, because if we had some better cooperation, we could have commonsense immigration enforcement. We could also have less money going to fraudsters," he added.

During his State of the Union address on Tuesday, Trump singled out Minnesota as a “stunning example” of the fraud he claimed was rampant in blue states and placed Vance in charge of what he branded the administration’s “war on fraud”. The American leader went on to use disparaging language against Somali Americans, describing them as “pirates who ransacked” the state.

Ilhan Omar, a Somali-born representative from Minnesota, hit back: “That’s a lie!” Wednesday’s announcement now suggests the administration will continue to find ways to target Minnesota and other blue states.