Trump says he’s fighting Medicaid fraud, but he’s mostly focused on blue states

The Trump administration is taking aim at what it calls rampant fraud in state Medicaid programs. But by focusing almost exclusively on Democratic-led states, he has provided ammunition for critics who say he mainly wants to embarrass his political enemies rather than save taxpayers money.

In announcing earlier this month that Vice President J.D. Vance would lead the administration’s anti-fraud efforts, President Donald Trump – he said on Truth Social that Vance will focus on fraud “EVERYWHERE,” but especially in these Blue States, where IRREGULAR DEMOCRATIC POLITICIANS like those in California, Illinois, Minnesota (beware of Somalia!), Maine, New York, and many others have had a “free for all” unprecedented theft of taxpayer money.”

Four of the five states the Trump administration is targeting, at least initially, are run by Democrats: California, Maine, Minnesota AND New York. (The only Republican-led state is Florida.) However, government benefit fraud is no more common in Democratic-led states than in Republican-led states, according to federal data.

In Minnesota, which has been a particular focus of the president’s ire, Attorney General Keith Ellison said the administration’s goal is “to advance a political position and try to assign blame rather than fix the real problem we face.”

“It’s a shame we don’t have a partner. We used to have one and it didn’t matter the party affiliation of the federal government,” added Ellison, a Democrat. “We all understood that we had to protect the public dollar on behalf of low-income and economically vulnerable people.”

Without a doubt, fraud is a long-standing problem: across all its programs, the federal government loses hundreds of billions of dollars each year to fraud, according to the Government Accountability Office. Medicaid Fraud Control Units, which operate in all 50 states, recovered $2 billion in fraudulent payments and obtained 856 fraud convictions in fiscal year 2025.

The $1.3 billion that fraud units recovered in criminal cases was the highest in a decade, although most of that amount came from a single case in Virginia. This total represents just a fraction of the approximately $920 billion that states and the federal government spent on Medicaid in fiscal year 2024.

Ann Maxwell, deputy inspector general for the Office of Inspector General at the U.S. Department of Health and Human Services, said the location and scope of fraudulent activity varies from year to year.

“There are always new people coming along who are spending all their time and energy thinking about how they can defraud federal programs,” Maxwell said. “And then it shows up in another state or with another group of providers, we pay attention to it and work to eliminate it.”

Brad Pigott, a former U.S. attorney for the Southern District of Mississippi who tried health care fraud cases during his tenure, said there is no connection between geography and fraudulent activity.

“All the work to combat fraud in federal programs over decades has proven that whether a provider or beneficiary is willing to commit fraud has nothing to do with where you live or the demographics of where you live,” Pigott told Stateline. “And it has nothing to do with which political party rules in a given country.”

We’re aiming for Minnesota

In January, administration announced creation of a modern national law enforcement division within the Department of Justice. In making this decision, he cited a sprawling scandal in Minnesota involving the possible theft of billions of federal dollars.

According to a federal prosecutor, fraudsters were likely stealing since 2018 half or more of the approximately $18 billion that supported 14 Medicaid-funded child care, child nutrition, housing and autism programs in the state. The Trump administration has highlighted the fact that 82 of the 92 defendants in the Minnesota programs are Somali Americans. Trump he called the Somalis in Minnesota “garbage” and used their presence as an excuse for the administration to impose a forceful immigration crackdown in Minneapolis, even though the immense majority of Somalis are American citizens.

In February, administration he said he would refrain $259.5 million in federal Medicaid payments to Minnesota “to prevent payment of questionable claims pending the completion of further investigation.”

“We are doing what any honest and patient-centered agency would do. We have notified the state that we will return the money to them, but will withhold and release it only after proposing and implementing a comprehensive corrective action plan to address the problem,” Dr. Mehmet Oz, administrator of the federal Centers for Medicare and Medicaid Services, he said in February at the White House.

“If Minnesota doesn’t clean up its systems, the state will accrue $1 billion in deferred payments this year.”

Minnesota sued get money.

“We don’t need the federal government to tell us that fraud is wrong,” Ellison said. “We are prosecuting this case. We have prosecuted this case. We will continue to prosecute this case. I am asking the state legislature for more resources to prosecute it.”

Meanwhile, the administration has expanded its focus to other Democratic-led states.

In the early March letter to Democratic New York Governor Kathy Hochul and the accompanying social media video, Oz falsely claimed that the state’s Medicaid program covered the cost of personal care services – assistance with basic activities such as meal preparation, bathing and grooming – for 5 million people, or nearly three-quarters of the 6.9 million New Yorkers in the program.

“This level of exploitation is unheard of,” Oz said in the video. In the post, he demanded that New York “come clean about its Medicaid program.”

But last week, CMS spokesman Chris Krepich confirmed by the Associated Press that the agency made an error when examining New York’s billing codes: The actual number of New Yorkers receiving personal care services is 450,000.

Krepich said the agency still has questions about how much New York spends per beneficiary and that the Medicaid program pays too many personal care aides. Health experts say this is largely because these types of services are steep in New York and the state has moved to provide more home care.

“It’s really clear that New York has chosen, as a matter of federal regulation and policy, to provide long-term care through home care and Medicaid. That’s our right as a state,” said Michael Kinnucan, director of health policy at the Fiscal Policy Institute, a progressive think tank in New York.

“They could have gone and said, ‘Listen, we don’t think all these states should provide home care. We think it’s too steep. We want to cut it.’ They didn’t do it because it would have been extremely unpopular,” Kinnucan said. “Now I think they are trying to achieve this political goal primarily through executive action, making baseless allegations of widespread fraud.”

But Bill Hammond, a senior health policy fellow at the Empire Center, a conservative-leaning think tank in New York, agreed with CMS that per capita spending in New York is unreasonably high.

“There is a lot of reason to be suspicious about how New York is using its Medicaid money, and it has needed some kind of oversight for a long time,” Hammond said. “So I don’t want to defend every detail of how the federal government is handling this, but I still hope it will be a useful and constructive process.”

Where there is money, there is fraud

Medicaid is so immense and requires so much money that bad actors and fraudulent activities are inevitable, said Summer McKeivier, a Los Angeles attorney who represents clients accused of committing health care fraud. McKeivier, however, said the existence of fraud does not necessarily mean the program is broken or that there is widespread criminal activity.

“The problem is that I think the federal government and the state government are the biggest loan sharks we have in the world. Basically, they always want their money back,” McKeivier said. She said Medicaid is so complicated that it’s straightforward for providers to misinterpret the rules, overbill or be confused about whether certain services are covered or not.

“The real problem, the overarching problem, with both programs (Medicaid and Medicare) is that they are very complicated and constantly evolving and changing.”

McKeivier said the Trump administration’s fraud efforts put the cart before the horses because improper spending of money is not fraud until proven in court.

But Brian Blase, president of the Paragon Health Institute, a conservative political group that advises congressional Republicans, said any signs of fraud should trigger an investigation.

“The programs are huge, and because they are huge and people are spending other people’s money, they are full of waste, fraud and abuse,” Blase said. “What we’re seeing now is just the tip of the iceberg.”

Andy Schneider, a research professor at Georgetown University’s McCourt School of Public Policy, said the administration’s real goal is to reduce overall Medicaid spending – not just waste, fraud and abuse.

“You can see that cheating is an attractive political message for them,” Schneider said.

“But here the game is longer, extends beyond the midterms and regardless of the outcome of the midterms, and has to do with limiting federal payments to states under Medicaid.”

Stateline reporter Shalina Chatlani can be reached at: schatlani@stateline.org.