RFK Jr freezes $1B to Calif, Minn, says Dems 'opened floodgates to theft'

WASHINGTON, DC: Health and Human Services Secretary Robert F Kennedy Jr announced Tuesday, July 21, that the Trump administration is withholding more than $1 billion in federal Medicaid payments from California and Minnesota, accusing the Democratic-led states of failing to safeguard taxpayer dollars against fraud. 

The funding will remain frozen until both states provide documentation verifying that the disputed Medicaid payments were lawful, Kennedy said. 

The move represents one of the administration's most aggressive actions yet against state Medicaid programs and significantly expands President Donald Trump's broader campaign to root out alleged waste, fraud and abuse across the federal government.

Kennedy freezes billion-dollar Medicaid funding

Speaking at Tuesday's announcement, Kennedy said federal Medicaid dollars would not continue flowing to California and Minnesota until officials demonstrate the payments meet federal legal requirements.

"We are not sending Medicaid dollars out the door until we have confidence that they are being spent lawfully and appropriately," Kennedy said. He added that if California Gov Gavin Newsom and Minnesota Gov Tim Walz want the funding restored to support healthcare for low-income residents, they must first "provide documentation that these payments are legitimate."

Kennedy sharply criticized Democratic leaders in both states, arguing they failed to protect federal healthcare dollars from abuse. "Instead of protecting your money, they opened the floodgates to theft," he said, blaming both the Biden administration and Democratic state officials for weakening oversight and dismantling key program integrity safeguards.

The administration has not publicly identified the specific Medicaid payments under review or disclosed how the more than $1 billion figure was calculated.

Move expands Trump fraud crackdown

The Medicaid funding freeze comes as the Trump administration intensifies its government-wide effort to combat fraud in taxpayer-funded programs. Administration officials have repeatedly argued that stronger oversight is necessary to prevent abuse and restore public confidence in federal spending.

Just last month, Acting Attorney General Todd Blanche announced charges against 455 defendants allegedly involved in $6.5 billion worth of healthcare fraud schemes, describing the operation as the largest coordinated federal and state healthcare fraud enforcement action in US history. Prosecutors alleged that many of the defendants exploited Medicare and Medicaid programs to finance luxury lifestyles and other illicit gains.