On July 22, 2026, the United States Department of Health and Human Services (HHS) announced that it would temporarily suspend approximately $1 billion in federal Medicaid funding to California and Minnesota. Secretary Robert F. Kennedy, Jr. stated that the reason for this suspension is due to “allegations of fraud and violations”.
This measure is temporary and not a permanent cut. It will not impact benefits or eligibility. Kennedy emphasized during a press conference with Dr. Mehmet Oz, Director of the Centers for Medicare and Medicaid Services (CMS), that in order for these states to receive the funds, they need to provide documentation proving the legitimacy of the payments.
The HHS mentioned that CMS will delay disbursing around $8.675 billion in federal Medicaid funds to California and approximately $1.99 billion to Minnesota.
Vice President Vance, Health Secretary Kennedy, and CMS Director Oz are leading an “uncompromising” campaign against fraud. Oz stated during the press conference, “Today, we urge California and Minnesota to work hand in hand with our federal government to ensure that Medicaid funds are used for those truly in need and facing real issues, enabling them to receive genuine medical services.”
“In the past two fiscal years… California’s spending on ‘in-home services’ has increased by 24%, while the national average is around 12%. This means that California’s expenditure growth rate is twice the national average. This doesn’t make sense,” Oz remarked.
Kennedy mentioned that the government suspects many of California’s suspicious expenditures are related to “in-home services”. The delayed funding for Minnesota involves 14 high-risk areas. The state’s own legislative audit agency identified these areas as weak points susceptible to fraud.
Minnesota Governor Tim Walz refuted this action, labeling it as political retaliation against the state. He expressed that the federal government’s punishment is targeting children, the elderly, and individuals with disabilities, not fraudsters.
California Governor Gavin Newsom criticized the move on social media platform X, stating that this is a repetition of old political stunts and California is being targeted for political reasons.
Kennedy also announced plans to expand the exclusion powers of CMS and HHS inspectors general, enabling them to remove “bad actors” from federal healthcare programs and potentially permanently ban them from participation.
(Some information in this article was referenced from Reuters.)