Minnesota sues to block Trump administration's withholding of Medicaid
funds
[March 03, 2026]
By AUDREY McAVOY
Minnesota on Monday sued President Donald Trump's administration in an
attempt to stop it from withholding $243 million in Medicaid spending,
warning it may have to cut health care for low-income families if the
funding is held back.
The lawsuit asked a U.S. court in Minneapolis to issue a temporary
restraining order to block the withholding for Medicaid, which is the
health care safety net for low-income Americans.
The move came after Vice President JD Vance said last week the
administration would “temporarily halt” some Medicaid funding to
Minnesota over fraud concerns, as part of what he described as an
aggressive crackdown on misuse of public funds.
Minnesota Attorney General Keith Ellison said his office has a strong
track record of fighting Medicaid fraud and has won more than 300
convictions and $80 million in judgments and restitutions during his
time in office.
“Trump’s attempts to look like he’s fighting fraud only punish the
people and families who most need the high-quality, affordable
healthcare that all Minnesotans deserve,” Ellison said in a statement.
"As long as I am attorney general, I will do everything in my power to
defend our tax dollars, both from fraudsters and from the Trump
administration’s cruelty.”
The lawsuit names the Department of Health and Human Services and the
Centers for Medicare and Medicaid Services as well as Dr. Mehmet Oz, in
his official capacity as CMS administrator, and Robert F. Kennedy Jr. in
his official capacity as HHS secretary.
The Department of Health and Human Services, which includes CMS, didn't
immediately return messages seeking comment late Monday.
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The threatened cuts amount to roughly 7% of Minnesota’s quarterly
Medicaid funding, Ellison's office said in a news release. Minnesota
could be required to significantly cut health care services for
low-income families or other government services if the cuts take
effect, it said.
Medicaid, which is known as Medical Assistance in Minnesota,
provides health insurance to 1.2 million Minnesotans who would
otherwise be unable to afford it. A family of four may qualify for
Medical Assistance with an income at or under $42,759, the attorney
general's office said.
The lawsuit said the administration violated due process procedures
because it was taking hundreds of millions of dollars without
proving Minnesota's noncompliance with Medicaid regulations through
discovery and an evidentiary hearing.
It alleged the administration failed to provide Minnesota with
details about its decision, in violation of federal law. It cited
legal precedents, including one that said Congress may impose
conditions on states’ acceptance of federal funds, but “'the
conditions must be set out unambiguously.'"
Minnesota's complaint further charged the administration violated
the Constitution because the withholding imposed retroactive
conditions on Minnesota's Medicaid funding.
It said withholding the funds was arbitrary, capricious and part of
a pattern of political punishment of Minnesota.
The administration said it would hold off on paying $259.5 million
to Minnesota for Medicaid spending in the fourth quarter of 2025.
Minnesota's lawsuit challenges the withholding of $243 million of
this money.
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