Health and Human Services Secretary Robert F. Kennedy Jr. has announced the federal government is withholding over $1 billion in Medicaid funding from California and Minnesota, accusing both Democratic-led states of widespread fraud. The move freezes roughly $867 million for California and about $200 million for Minnesota until state officials can prove the legitimacy of disputed claims.
Kennedy slammed the Biden administration and Democratic governors for what he called a failure to safeguard taxpayer dollars. “Instead of protecting your money, they open the floodgates to theft,” he said. “They dismantle basic program integrity and oversight.”
CMS Administrator Dr. Mehmet Oz defended the funding freeze, labeling California and Minnesota as “signature and significant outliers” in Medicaid fraud. But the administration’s focus on blue states has drawn scrutiny, especially given federal enforcement data showing fraud is hardly a partisan issue.
Texas has consistently ranked among states with the highest raw dollar amounts of Medicaid fraud, according to Justice Department records. Florida also routinely appears near the top. Meanwhile, Republican-led Ohio is in the midst of one of the nation’s largest Medicaid fraud crackdowns. Just this month, federal and state prosecutors announced charges tied to healthcare fraud schemes totaling tens of millions of dollars. Ohio’s attorney general unveiled six new Medicaid fraud indictments involving doctors and home health providers accused of falsifying records, billing for services never rendered, or claiming impossible work schedules exceeding 24 hours in a day.
Those Ohio indictments were part of the Justice Department’s 2026 National Health Care Fraud Takedown, which charged 455 defendants across 45 states and territories in alleged schemes totaling more than $6.5 billion. Critics argue that if the goal is truly to root out fraud, the crackdown should follow the evidence—not the electoral map.
“No one is arguing that fraudulent claims should be paid,” wrote Lindsey Granger, a NewsNation contributor and co-host of The Hill’s “Rising,” in an edited transcription of her on-air commentary. “But if we’re going to wage a national war on Medicaid fraud, it has to actually be national. That means Texas. That means Florida. That means Ohio.”
The withheld funds are not just a blow to state budgets. Hospitals, clinics, nursing homes, and ultimately patients bear the brunt. Minnesota has already seen $243 million in Medicaid funding frozen since February, while California has had $1.3 billion withheld since May. Tuesday’s announcement adds another $1 billion to that total. States rely on these federal dollars to fund healthcare for low-income families, seniors, children, and people with disabilities. Delayed payments can strain hospital budgets—especially in rural areas—slow provider reimbursements, and force states into difficult budget decisions while investigations drag on.
Granger also pointed out a glaring inconsistency: President Trump has pardoned individuals convicted of massive healthcare fraud, including Florida nursing home mogul Philip Esformes, who was found guilty of stealing $1.3 billion from Medicare and Medicaid. “Maybe RFK Jr. can tell the president he should stop pardoning folks like that,” she said.
The selective enforcement raises questions about the administration’s commitment to a truly national anti-fraud effort. As Trump holds back $1B in Medicaid payments to California and Minnesota, the spotlight remains on blue states, while GOP-led states with similar fraud patterns escape similar scrutiny. For now, the freeze stands, leaving state officials and healthcare providers scrambling to adjust.
