Minnesota files lawsuit to block Trump administration from withholding $243 million in Medicaid funds

The state of Minnesota on Monday filed a lawsuit against President Donald Trump’s administration in an attempt to stop it from withholding $243 million in Medicaid spending, warning that it may have to cut health care for low-income families if funding is frozen.

He watches: Trump administration halts Minnesota Medicaid funding over fraud allegations

The lawsuit asked a U.S. court in Minneapolis to issue a temporary restraining order to prevent the withholding of Medicaid, the health care safety net for low-income Americans.

The move came after Vice President J.D. Vance said last week that the administration would “temporarily suspend” some Medicaid funding for Minnesota over fraud concerns, as part of what he described as a crackdown on the misuse of public funds.

Minnesota Attorney General Keith Ellison said his office has a strong track record in combating Medicaid fraud, and has won more than 300 convictions and $80 million in verdicts and awards during his time in office.

“Trump’s attempts to appear to be fighting fraud only serves to punish the people and families who desperately need the high-quality, affordable health care 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 cruelty of the Trump administration,” he added.

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 Director of CMS, and Robert F. Kennedy Jr., in his official capacity as Secretary of the Department of Health and Human Services.

The Department of Health and Human Services, which includes CMS, did not immediately return messages seeking comment late Monday.

The threatened cuts amount to nearly 7% of Minnesota’s quarterly Medicaid funding, Ellison’s office said in a news release. Minnesota may be required to significantly cut health care services for low-income families or other government services if the cuts take effect, she said.

Medicaid, known as Medicaid in Minnesota, provides health insurance to about 1.2 million Minnesotans who otherwise wouldn’t be able to afford it. A family of four may qualify for Medicaid with an income of at or below $42,759, the Attorney General’s Office said.

The lawsuit said the department violated due process procedures because it took hundreds of millions of dollars without proving Minnesota’s noncompliance with Medicaid regulations through discovery and an evidentiary hearing.

It alleged that the administration failed to provide Minnesota with details about its decision, in violation of federal law. She cited legal precedent, including one that said Congress may impose conditions on states accepting federal funds, but “the conditions must be unambiguously specified.”

Minnesota’s complaint also accused the administration of violating the Constitution because the block imposed retroactive conditions on Medicaid funding in Minnesota.

She said the withholding of funds was arbitrary, capricious and part of a pattern of political punishment in Minnesota.

The administration said it will defer 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 that money.