One in Three Minnesota Kids on Medicaid: Why are we paying for middle-class Medicaid and how much goes to fraud?

One in three Minnesota children now receives coverage through Medical Assistance, the state’s Medicaid program. This is not a sign of policy success or expanded compassion. It is a clear warning that Minnesota has drifted from promoting stable families, economic self-sufficiency, and a functional healthcare market.

In Minnesota, individuals can receive income-dependent taxpayer subsidies for their healthcare even if they make four times the federal poverty guidelines. Most parents see it as a responsibility that comes with raising a family. Yet over 40% of Medicaid recipients are now kids.

If you are married with three kids, you must make over $106,370/year to get your kids off Medicaid. Oh, you inherited a $750,000 house and $2 million? Your kids are still on Medicaid. There is (of course)  no longer an asset limit for Medicaid in the Learing Center State.

In an effort to “cover every kid,” Medicaid expanded in Minnesota to not only cover poor children and their parents, but kids of middle-class moms and dads. That’s not good for the doctors or the patients. It’s bad for kids because they have to hunt to find doctors who are willing to treat Medicaid patients and bad for docs because payments for Medicaid services are reimbursed below the cost of delivering care. The Minnesota Medical Association recently published data showing Medicaid payments are now 30% of private pay.  If you lose money on every transaction, you can’t make it up on volume, so we have moved kids from private health insurance to Medicaid and created care deserts in the process.

Fraud and improper payments pour billions of dollars down a rat hole in Minnesota and Medicaid is the single biggest source. In addition to the rampant Medicaid fraud that may have cost $9 billion in Minnesota since 2018, that may not be half of it. American Experiment showed how between 8-20% of Medicaid enrollees may simply be checks going to insurance companies to pay for people who have another policy, live in another state, or be dead. Because of increased address moves of Medicaid enrollees, kids are more likely to be over-counted in these numbers. American Experiment supports basic eligibility checks and payment withholds to make sure the money is going to care.

Minnesota should be proud of how many people no longer need the government to pay for their health care, not the number that still do. Hospitals and doctor groups should stand up for their patients by standing up to the political bullies who coerce them into supporting an ever expanding number of Minnesotans dependent on the government for health care.

When Minnesota bowed to the political pressure and “free” money to expand Medicaid (with the support of hospitals and docs) we stupidly agreed to a formula that paid three times as much in subsidy to a 25 year old to move into mom’s basement and be on Medicaid as a kid in a wheelchair. Does that seem fair?

For more information on this topic, please see these sources:

  1. Minnesota Compass. “Medicaid in Minnesota: The who, what, where, why, and how.” June 30, 2025. https://www.mncompass.org/data-insights/articles/medicaid-minnesota-who-what-where-why-and-how
  2. KFF. “Medicaid in Minnesota” Fact Sheet. May 2025. https://files.kff.org/attachment/fact-sheet-medicaid-state-MN
  3. USAFacts. “Minnesota and Medicaid: What the data says.” March 4, 2026. https://usafacts.org/articles/minnesota-and-medicaid-what-the-data-says/
  4. Minnesota Department of Human Services. Medical Assistance Survey: Barriers to Care (report on 2022 survey data). 2024. https://mn.gov/dhs/assets/ma-survey-barriers-to-care-03-24_tcm1053-615605.pdf
  5. Office of Juvenile Justice and Delinquency Prevention (OJJDP). “Poverty status of children by family structure.” Statistical Briefing Book (2021 data with ongoing relevance). https://ojjdp.ojp.gov/statistical-briefing-book/population/faqs/qa01203
  6. MNsure. “2025-26 Income Level Guidelines for Financial Help.” https://www.mnsure.org/financial-help/income-guidelines/
  7. Minnesota Department of Human Services. “By the numbers / Medicaid Matters.” https://mn.gov/dhs/medicaid-matters/by-the-numbers/