Minnesota fraud: State officials say federal Medicaid cuts would hurt the most vulnerable

MN leaders on possible impact of federal cuts to state programs

Minnesota department leaders spoke about the potential impacts of federal cuts to critical programs in Minnesota. They addressed the proposed cuts to CMS-funded programs, SNAP, and other safety-net services for seniors, children, home care workers, and families across the state.

ST. PAUL, Minn. (FOX 9) - Minnesota department heads who rely on federal funding for critical services that assist seniors, children, and people with disabilities, say that the loss of federal funds would cause significant harm to vulnerable members of the state's population.  

This comes after President Donald Trump threatened to cut federal funds to Minnesota and other sanctuary states, but did not specify which specific Medicaid funds would be targeted. 

READ MORE: Trump threatens funding to Minnesota: Is it legal?

Minnesota Medicaid programs threatened 

Trump statement:

President Trump announced massive funding cuts to sanctuary states that he says will start on Feb. 1. 

"Starting Feb. 1, we’re not making any payments to sanctuary cities or states having sanctuary cities because they do everything possible to protect criminals at the expense of American citizens," Trump said. "And it breeds fraud and crime and all the other problems that come. So we’re not making any payment to anybody that supports sanctuary," he added.

Minnesota has been the target of a fraud and immigration crackdown by federal authorities after widespread fraud was uncovered within state programs. 

Minnesota leaders say Medicaid cuts will lead to deaths 

What they're saying:

Deputy Commissioner of the Department of Human Services & State Medicaid Director John Connolly said state officials worked with the Centers for Medicare and Medicaid Services to address the fraud that was running rampant in Minnesota programs. 

"We had been working on this issue, program integrity, as a top priority for well over a year, and many of the suggested changes had either been implemented or were in process," Connolly said. "And since October 2024, we had been frequently working in partnership with CMS staff to harden our processes, minimize risk, and prevent fraud. As we were implementing their suggestions over the months, CMS staff did not indicate that our work was insufficient."

The director continued by saying he was "disappointed to find out that our draft corrective action plan, submitted on New Year's Eve, was summarily rejected in an unprecedented way, with little substantive analysis of the facts, and no time for the state and federal agencies that typically partner to discuss and agree upon a corrective action plan that would be implemented." 

Andrea Hanek, an executive board member for SEUIU Healthcare and a Duluth resident, said, "They hate Minnesota so much, they're willing to let our disabled and our elderly loved ones die to punish us."

Deb Halsey, a home care worker who has worked in the industry for more than 40 years, said, "To punish our state would mean seniors and people with disabilities will die." 

The initial news release showed Governor Tim Walz was set to speak at the news conference, but he was not present.

Response to Minnesota fraud

The backstory:

The federal government has significantly increased its pressure on Minnesota programs, leading to some state services freezing new enrollment.

The Department of Homeland Security also announced renewed scrutiny of people here under refugee status.

The Trump administration also announced the end of temporary protected status for hundreds of Somali migrants in Minnesota, who will lose protections in March. 

ICE operations in Minnesota 

Dig deeper:

Thousands of ICE agents are carrying out deportations in the Twin Cities and surrounding areas.

READ MORE: ICE in Minnesota: Emergency order not issued in ICE lawsuit; students walkout

A Minneapolis woman, 37-year-old Renee Good, was fatally shot by an ICE agent in the city on Jan. 7. That agent is claiming self-defense, a claim that is being rebuked by local leaders.