'War on fraud': White House to withhold $259 million on medicaid funds from Minnesota

US Vice President JD Vance on Wednesday announced a freeze on $259 million in Medicaid payments to Minnesota, escalating tensions with the Democratic-led state a day after President Donald Trump appointed him to lead a “war on fraud.”

“We have decided to temporarily halt certain amounts of Medicaid funding that are going to the state of Minnesota,” Vance told a news conference, referring to the US health insurance programme for low-income Americans.




Mehmet Oz, now administrator for the Centers for Medicare and Medicaid Services, said the federal government would freeze $259 million in payments to the state.

The move follows repeated claims by the Trump administration that public benefits fraud is widespread in Minnesota, allegations it has linked to the state’s Somali community. Trump also criticised Somali immigrants in his State of the Union address on Tuesday, when he announced that Vance would take on the new fraud oversight role.

Minnesota has the largest Somali community in the United States. The funding freeze is almost certain to face legal challenges, as have previous efforts by the Trump administration to withhold federal funds from states.

The administration has also clashed with Minnesota over immigration enforcement. In January, federal agents shot dead two Americans during an immigration crackdown in the state.

Vance’s appointment to lead the anti-fraud effort comes amid speculation that the 41-year-old could emerge as a frontrunner for the 2028 Republican presidential nomination. However, the assignment places him in a line of US vice presidents tasked with politically sensitive portfolios. His predecessor, Kamala Harris, faced challenges after then-president Joe Biden asked her to address the root causes of migration from Central America.