The state of Minnesota filed a federal lawsuit Monday aimed at preventing the Trump administration from blocking $243 million in Medicaid payments, cautioning that healthcare services for vulnerable families could face cuts if the funding freeze proceeds.
State officials are requesting a Minneapolis federal court to grant an emergency restraining order that would stop the administration from withholding the Medicaid dollars, which serve as a crucial healthcare lifeline for Americans with limited income.
The legal action follows Vice President JD Vance’s announcement last week that the administration would “temporarily halt” certain Medicaid payments to Minnesota due to suspected fraud issues, describing it as part of an intensive effort to crack down on the misuse of taxpayer money.
Minnesota’s top legal official, Attorney General Keith Ellison, highlighted his office’s successful record in combating Medicaid fraud, noting over 300 criminal convictions and $80 million recovered in judgments and restitution payments since taking 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 stated. “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 court filing targets the Department of Health and Human Services and the Centers for Medicare and Medicaid Services, along with Dr. Mehmet Oz in his role as CMS administrator and Robert F. Kennedy Jr. serving as HHS secretary.
Federal health officials did not respond to requests for comment by late Monday evening.
According to Ellison’s office, the potential funding reduction represents approximately 7% of Minnesota’s three-month Medicaid allocation. Officials warn the state might need to drastically reduce healthcare programs for low-income residents or slash other government services if the cuts move forward.
In Minnesota, the Medicaid program operates under the name Medical Assistance and covers 1.2 million residents who lack the financial means to purchase health insurance independently. Families of four earning $42,759 or less annually may qualify for Medical Assistance benefits, according to state officials.
The legal challenge argues the administration broke due process rules by attempting to withhold hundreds of millions of dollars without demonstrating Minnesota’s failure to comply with Medicaid requirements through proper investigation and formal hearings.
State attorneys claim federal officials failed to provide Minnesota with specific information about their decision, violating federal regulations. The lawsuit references established legal principles, including one stating that while Congress can attach requirements to federal funding for states, “the conditions must be set out unambiguously.”
Minnesota’s legal filing also contends the administration violated constitutional protections by applying new requirements retroactively to the state’s Medicaid funding arrangement.
The complaint describes the funding freeze as unreasonable and arbitrary, characterizing it as part of a broader pattern of political retaliation against Minnesota.
Federal officials announced plans to suspend $259.5 million in Minnesota Medicaid payments for the final quarter of 2025, with the state’s lawsuit specifically challenging $243 million of that total amount.
