The Trump administration is withholding an additional $1 billion in Medicaid funds from California and Minnesota due to suspected fraud in their public health insurance programs. This marks the second time the federal government has targeted these two states, led by Democratic governors, for such concerns.

California faces a hold of over $867 million, while Minnesota has over $200 million withheld. Federal officials cited claims for care provided to deceased enrollees and unusually high billing by healthcare providers as indicators of potential fraud, stating these issues were particularly severe in these states. Previously, Minnesota had approximately $250 million withheld since February, and California had $1.3 billion withheld since May.

Officials like Robert F. Kennedy Jr. stated that the states need to provide basic documentation of legitimate services for the funds to be released. However, California Governor Gavin Newsom and Minnesota Governor Tim Walz criticized the move as politically motivated, with Governor Walz asserting it punishes vulnerable populations. A federal judge previously deemed the administration's actions "historically unprecedented" but did not intervene. The withheld funds represent a small fraction of each state's overall Medicaid budget.