Federal authorities have decertified Hawaii as eligible to receive Medicaid funding because the Democrat-run state government refuses to provide proper resources to address fraud.
Federal Trade Commission Chairman Andrew Ferguson made the bombshell announcement on Thursday as part of a series of administration fraud crackdown revelations. “The Trump administration is going to take seriously the obligation that you have an effective Medicaid fraud control unit in your state. Everyone is being out noticed and today, Hawaii is being decertified for abject failure to enforce state and federal law to prohibit fraud in Hawaii,” Ferguson said.
He continued, “The reason this is important is because one of the requirements for getting Medicaid money for your state is to have an effective Medicaid fraud control unit. And if you don't have one, it can jeopardize the state’s access to Medicaid money generally.”
BREAKING: The Trump administration is putting every state on notice in a massive crackdown on Medicaid fraud.
— Fox News (@FoxNews) June 4, 2026
FTC Chairman Andrew Ferguson just announced that Hawaii has been officially decertified for failing to enforce the law and address the fraud problem plaguing the state.… pic.twitter.com/lndR5wzt12
Hopefully we see the Trump administration follow through with such measures not only in Hawaii, but in many other Democrat states. Until and unless they actually lose money, the woke politicians will continue to refuse any sort of reform.
In fact, some Democrat states like California, Washington, and Illinois are very proud to provide taxpayer-funded healthcare to illegal aliens, which is why, last July, a coalition of 20 states sued the Department of Homeland Security and the Health and Human Services Department for trying to identify and eliminate illegal aliens from Medicaid benefits while providing data to deportation officials. The last thing politicians in many Democrat states want is to find out how many fraudsters there are on Medicaid. They love fraud.
Related: Justice Department Charges Fraudsters Who Stole $50 Million in Ohio
Since Ferguson specifically called out Hawaii, it is worth noting that one of the fraud cases the U.S. Department of Justice (DOJ) highlighted recently was regarding a former Hawaiian official who bartered off housing contracts to people who never built the required housing, all in exchange for kickbacks. While this was not a healthcare case, it is part of the comprehensive federal investigation into fraud.
Alan Scott Rudo, who now lives in Cathedral City, Calif., was involved in a conspiracy to use his job as housing specialist at the Hawaii County Office of Housing and Community Development (OHCD) as a shortcut to wealth, according to the DOJ on May 29. The “affordable housing” agreements were worth $11 million, and multiple contractors were so eager to secure them that they were willing to arrange a bribe scheme with Rudo. And after they came to a criminal agreement agreeable to all parties, the contractors then did not build a single unit of housing. “Affordable housing” is always a contradiction in terms when it means government is using taxpayer money to build it, but this is just one example of how easy it is in Hawaii to defraud taxpayers.
It will be interesting to see if the DOJ releases any numbers on the suspected extent of Medicaid fraud in Hawaii.
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