Medicaid Funding Paused for CA, MN

The US Department of Health and Human Services has paused over $1 billion in Medicaid funding to California and Minnesota, as part of a crackdown on alleged Medicaid fraud, with Health Secretary Robert F Kennedy Jr speaking about the issue in Minneapolis, Minnesota, on May 21, 2026, as reported by The Guardian. This move is part of a larger effort to combat healthcare fraud, which has also led to the arrest of individuals such as Khalid Satary, who was apprehended in connection with a $547 million Medicare fraud scheme, and is similar to other recent actions, including the halt of Medicaid payments and the US charges against 324 individuals in a $14.6 billion healthcare fraud crackdown. The pause in funding is also related to the Medicaid fraud issue, which has been ongoing, and is part of a broader problem of SNAP benefits lost to fraud. According to Kennedy, officials relied on AI to identify potential fraud, and the pause includes more than $867m for California and about $200m for Minnesota, with most of the suspected fraud in California being in in-home services. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services (CMS), stated that payments had been used to "pad the pockets of criminals" and that the government has identified potential areas at high risk of fraud, but claimed that states have not yet been able to document fully and acceptably to the federal government claims that are unresolved and claims that smell like fraud. Vice-President JD Vance had previously threatened to withhold funding to states if they did not cooperate with a new fraud taskforce, and the health department is expanding its exclusion authority to override states and remove "bad actors" from federal healthcare programs.