The Trump administration is signaling it might halt billions of dollars in federal health payments to multiple states over claims of fraud, mirroring moves federal officials made against Minnesota.
The specific target is Medicaid, the public health insurance program. The Trump administration recently warned it could withhold more than $2 billion in payments for Minnesota and claw back nearly $250 million from 2025. The threats might disappear after new oversight plans from the state were approved. However, KFF Health News reporting suggested the threats still heighten concerns about harming patients who rely on Medicaid.
Sumukha Terakanambi, a Lakeville resident with muscular dystrophy and public policy consultant with the Minnesota Council on Disability, said the federal push is misdirected.
"Of course we support going after fraud, but this overly aggressive action is missing the point," Terakanambi asserted. "It’s not punishing fraudsters. It’s punishing the people."
Other health policy experts said punitive measures against states are often ineffective in addressing fraud. Meanwhile, fraud prosecutions have stalled in Minnesota following an exodus of U.S. attorneys here in light of the Trump administration’s immigration crackdown.
Despite the concerns, Centers for Medicare and Medicaid Services head Mehmet Oz said funding threats in Minnesota could be applied elsewhere, alleging high-dollar public benefit fraud in California, Florida, Maine and New York.
The Trump administration's accelerated push to withhold funds and heavily scrutinize Medicaid oversight comes after the Biden administration had already begun looking into activity in Minnesota. There have been many state-level investigations. A Centers for Medicare and Medicaid Services spokesperson said the federal agency does not take funding actions lightly.
Terakanambi warned it is not difficult to see how a host of broader federal actions could put services in jeopardy.
"People will die," Terakanambi contended. "People will lose critical supports and will no longer be able to participate in their community the way they want to."
Many states are looking to reduce or even eliminate funding for home care services over much smaller budget shortfalls. Further cuts are anticipated following congressional Republicans’ "One Big Beautiful Bill Act" signed into law last year. It's expected to reduce federal Medicaid spending by more than $900 billion over the next decade.
This story was produced with original reporting by Bram Sable-Smith for KFF Health News.
Source: Public News Service
