Minnesota Loses Bid to Block Trump’s Hold on Medicaid Funds

The Trump administration can proceed with withholding over $200 million in Medicaid funds from Minnesota after a federal judge denied a request from the state to block the effort.

Judge Eric C. Tostrud’s order late Monday leaves in place plans by the US Department of Health and Human Services to defer $243 million in Medicaid payments from Minnesota. The state sued the HHS in March and immediately asked the court to take emergency action, accusing the Trump administration of weaponizing Medicaid as “political punishment.”

“Minnesota has identified reasonable legal concerns regarding the deferral’s nature and scope and the federal government’s motivations for initiating it. It is possible the record may support these concerns in the future. Today it does not,” Tostrud wrote.

Minnesota in its lawsuit said the Trump administration illegally deferred the funds without providing grounds for the “noncompliance” that triggered the move.

The state has been battling with the administration over fraud as well as immigration enforcement.

“In addition to the Immigration and Customs Enforcement ‘Surge’ —which terrorized Minnesotans for weeks on the feeble pretense that noncitizens were to blame for Medicaid fraud in the State—the Trump Administration is now improperly withholding hundreds of millions of Medicaid dollars from the State,” Minnesota said in its motion for a temporary restraining order.

Tostrud’s Monday order shoots down Minnesota’s attempt to secure a temporary order and expedited preliminary injunction.

In the order, Tostrud said some of Minnesota’s asserted legal theories are novel and not supported by the law. He also said that while “Minnesota credibly complains that the federal government’s deferral is historically unprecedented in its size and timing,” the record shows “the deferral likely complies with the controlling federal regulations.”

The case is Minnesota v. Oz, D. Minn., No. 0:26-cv-01701, 4/6/26.