Ryan Ellis, president of the Center for a Free Economy, said Minnesota’s outsourced welfare system allowed nonprofit fraud in SNAP, daycare, and healthcare programs through fake centers that allegedly stole billions. He noted the One Big Beautiful Bill Act’s work requirements and eligibility checks are now addressing the issue.
“What you’re seeing in Minnesota involves SNAP (food stamps), daycare centers, and some healthcare programs as well,” said Ellis on the Health Policy Podcast. “The One Big Beautiful Bill Act, passed by Congress in late June or early July, finally put in place basic common-sense welfare reform restrictions that we have long called for. In Minnesota, the system was outsourced repeatedly until local nonprofits or non-government organizations became corrupted and captive to the populations they serve, skimming money off the top. They set up phony distribution centers for food and daycare, stealing billions of dollars from these government programs—either for personal enrichment or possibly to send back to home countries.”
Ellis made these comments during an appearance on the Health Policy Podcast, where he described how limited oversight in Minnesota’s delegated welfare administration allowed corruption in federal programs such as healthcare, SNAP, and daycare. He highlighted provisions in the One Big Beautiful Bill Act aimed at verifying eligibility and preventing fraud.
According to reports, Minnesota’s Feeding Our Future network allegedly defrauded more than $250 million from federal child nutrition programs through fake meal sites and shell companies. A separate Medicaid fraud case involving autism daycares reportedly diverted hundreds of millions via improper billing and kickbacks, exploiting weak state oversight of nonprofit administrators.
Nationally, improper payments in Medicaid exceeded $100 billion in recent fiscal years due to eligibility errors, provider fraud, and insufficient verification. SNAP improper payments totaled about $11 billion annually, often resulting from over-issuances and unreported changes. Federal reforms include work requirements and routine eligibility checks to reduce losses.
Ellis serves as president of the Center for a Free Economy, focusing on tax and economic policy advocacy. He previously worked as a tax lobbyist and consultant, contributing to conservative coalitions on fiscal issues. Ellis is an IRS Enrolled Agent and has written for outlets including National Review and The Wall Street Journal on tax reform and free-market policies.
