The Trump administration continues to weaponize Medicaid to punish Blue States under the phony cover of hunting for “waste, fraud, and abuse.” Trump named J.D. Vance ‘fraud czar’ – and the veep has wasted no time withholding billions of dollars in Medicaid funds from Democratic-run states.
Last week, Vance announced he’s holding back $1.3 billion in Medicaid reimbursements to California over allegations of “fraud.” There obviously is no love lost between the Trump administration and Governor Gavin Newsom’s state.
Earlier this year, Vance teamed up with Medicaid chief Mehemet Oz and froze $280 million in payments to Minnesota, after a beef with Governor Tim Walz in the wake of ICE abuses in Minneapolis.
“This is political retribution, plain and simple. Medicaid is the biggest hammer that the Trump administration can use to hurt states they don’t like,” says our senior health policy expert, Anne Montgomery. “We are seeing Medicaid get treated less like a public health program – and more like a lever of partisan punishment.”
While some 6% of Medicaid payments to health care providers and suppliers have been deemed “improper,” most of those are genuine mistakes that can be tracked and corrected. Actual malfeasance – “fraud” and “abuse”– is very rare.
“Waste, fraud, and abuse is a red herring for cutting services and benefits.” – Anne Montgomery, NCPSSM Senior Health Policy Expert
If anything, the Trump administration ITSELF is guilty of “abuse” by withholding funds that are supposed to go toward health care for lower income people – and for seniors needing long-term care. (Medicaid covers some 60% of long term care services and supports in the U.S.)
Medicaid covers more than 60% of long term care services and supports (iStockphoto)
Of course, this also is an ideological battle. Trump and his Republican co-dependents disdain the Medicaid program (and, by extension, the people who depend on it). Any federal program that does not service the wealthy and major corporate interests — or enrich the Trump family and their cronies — falls into the same category in Trump’s eyes. The Trump/GOP “Big, Ugly Bill” notoriously cut more than $1 trillion from Medicaid and nutrition assistance for lower income people to help pay for a huge tax cut mainly for the rich.
Cutting Medicaid (and undoing the Great Society in general) has been a long-held dream of the political right. It wasn’t that long ago that former Republican House Speaker and 2012 VP candidate Paul Ryan mused, “We’ve been dreaming of slashing Medicaid since my (college) kegger days.” Just last month, Trump actually called for the end of the federal health coverage for seniors and low income people:::
“It’s not possible for us to take care of Medicaid (and) Medicare… You can’t do it on a federal level. We have to take care of one thing: military protection.” – Donald Trump, 4/1/26
In a system as large as Medicaid, improper payments are inevitable, and many of them stem from administrative mistakes, paperwork problems, or other errors, not systemic fraud. That is why oversight bodies like the Government Accountability Office (GAO) and inspectors general exist, and are able to make recommendations that push these programs to be more effective and efficient. Reporting from the Kaiser Family Foundation (KFF) outlines how GAO actually identifies “improper payments.” Spoiler alert: it’s completely at odds with cutting services.
The Trump administration has not provided California a clear corrective process here for alleged “waste, fraud, and abuse.” Instead, it has been hit with a massive financial threat first, then told to accept the administration’s accusations as sufficient explanation. That is not what good governance looks like.
The bogus Trump/Vance campaign against Medicaid ‘fraud’ hurts real people who depend on the program for health care
Unfortunately, the Trump/Vance retribution road show rolls on. Last week, Vance traveled to Maine, where he used his role as “fraud czar” for nakedly partisan purposes — in a state with crucial House and Senate races that will help shape the balance of power in Washington.
“Let’s kick (Democratic Governor and one-time Senate candidate) Janet Mills to the curb and send former GOP Governor Paul LePage (to the U.S. House) to fight the fraudsters and protect all of you,” Vance told a crowd in Bangor. Vance also expressed his support for incumbent GOP Senator Susan Collins. (Governor Mills subsequently dropped out of the Democratic Senate primary race.)
Which state comes next? Well, it’s fair to assume it won’t be a Republican one. As Anne Montgomery observes, “I don’t imagine they’re going to go after Red states like this.”
Trump’s real aim appears to be a mix of punishment and leverage. He’s escalating a personal and political war with Gavin Newsom, retaliating for redistricting in the Golden State that could help Democrats this election year, and forcing compliance with Trump’s warped priorities on the state’s health system.
Of course, the idea of Trump pursuing fraud is like the fox investigating the chickens. The president is the biggest fraudster in public office today (see Trump University, among other shady Trump schemes).
The hypocrisy is stunning. While the administration pursues ephemeral ‘fraud’ in Medicaid, Trump has pardoned more than 80 white collar criminals convicted of money laundering, bank fraud and wire fraud, among other charges. Meanwhile, the Trump family has pocketed nearly $2 billion – TWO BILLION DOLLARS – in “cash and gifts” since the 2024 election, while the Department of Justice and Republicans in congress turn a blind eye.
The hypocrisy would be funny if it weren’t doing so much damage. When it comes to the Trump administration and fraud, the call is coming from inside the house.