Chicago – July 22, 2026
The Trump administration has frozen nearly $1 billion in federal Medicaid funding to California and Minnesota, accusing the two states of improperly using healthcare funds to provide coverage for undocumented immigrants. The Department of Health and Human Services said the payments were paused while officials review whether the states violated federal Medicaid rules.
Administration officials argued that taxpayer-funded healthcare programs should be reserved for citizens and individuals legally eligible for benefits. California and Minnesota denied the allegations, stating that state-funded programs for undocumented residents are financed separately from federal Medicaid dollars and comply with federal law. Both states warned that the funding freeze could disrupt healthcare services for low-income families, seniors and people with disabilities if the dispute continues. Democratic leaders criticized the decision as politically motivated and pledged to challenge it in court. The latest move adds to ongoing legal and political battles between the Trump administration and Democratic-led states over immigration, healthcare funding and federal authority.
