Oregon state Rep. Dwayne Yunker began asking questions after discovering that the state used tax dollars to bring developmentally disabled clients to a strip club this past summer. Yunker, a Republican lawmaker in a heavily Democratic state with a Democrat supermajority in the legislature, has since exposed this and other controversial Medicaid spending in Oregon—expenditures that have little or nothing to do with medical or health issues.
On Monday, Yunker will travel to Washington to meet with members of Congress and Trump administration officials to discuss investigating how his state—and likely others—are using Medicaid funds. Medicaid is a joint federal-state program intended to provide health care coverage for the poor and disabled.
The Oregon Department of Human Services informed Yunker in mid-August that denying the strip club outing could jeopardize federal Medicaid funding, he told The Daily Signal. The agency specifically referenced a federal law requiring state Medicaid programs to help disabled people integrate into the community.
“The adult day care [program] has taken developmentally disabled clients to strip clubs and bars,” Yunker said. “They say they are integrating them with the community. But we are not talking about taking them to a park or the museum.”
Yunker supports the Trump administration’s proposed Medicaid reforms under the One Big Beautiful Bill Act, which include work requirements to receive benefits.
In an August 18 letter to Dr. Mehmet Oz, administrator for the federal Centers for Medicare & Medicaid Services (CMS), Yunker noted that the strip club issue was just one example of many concerns with Oregon’s Medicaid program. He highlighted that $2.3 million in Medicaid funds were paid over the past year to an organization housing a Venezuelan gang member charged with kidnapping, torture, and attempted murder. Furthermore, Medicaid reimbursements had covered “sex change” operations on minors.
Regarding the strip club outing, Caprice Knapp, principal deputy director of CMS’s Centers for Medicaid & CHIP Services, responded in a September 19 letter to Yunker, stating that “nothing in this or any other Medicaid regulation sanctions or requires taxpayer funding to be used for activities like those you uncovered in Oregon.”
Knapp explained that CMS staff held discussions with the Oregon Health Authority and the Oregon Department of Human Services. “On that call, they were able to confirm that this voluntary activity in the community was not part of an individual’s person-centered service plan and the provider did not bill Medicaid for this activity,” she wrote. “These state agencies also understand that the HCBS [Medicaid home- and community-based services] regulation was inappropriately characterized as requiring the activities you highlighted. Based on this discussion, my staff is comfortable that this issue has been resolved.”
The Oregon Department of Human Services did not respond to phone and email inquiries for this story.
Yunker said such problems are not confined to Oregon. “Oregon, California, and Washington are almost the same; each state is trying to one-up the other with how much of other people’s money they can spend,” he said. “What you’re seeing in New York City has been happening out west for a long time. They just don’t always call it socialism.”
“This isn’t just a one-off scandal,” said Tony Woodlief, senior executive vice president with the State Policy Network, a network of conservative and libertarian state-based think tanks. “The real problem is that Americans are too often misled about what federal law actually requires.”
“State bureaucrats sometimes hide behind Washington as an excuse to push their own agendas past elected leaders,” Woodlief told The Daily Signal. “Other times, federal ideologues issue unauthorized directives that twist the law to advance policies no one voted for. Either way, unelected bureaucrats—not the people—end up in charge.”
Woodlief added that this issue goes beyond Medicaid programs in state governments. “Thank goodness for champions like Rep. Yunker who are willing to ask the hard questions and hold the system accountable.”
Two years ago, Oregon announced it would allow illegal immigrants to access Medicaid benefits, stating: “As of July 1, 2023, people of all ages who meet income and other criteria qualify for full OHP [Oregon Medicaid] benefits and other services and supports, no matter their immigration status.” The Medicaid funds paying for illegal immigrants come from state Medicaid dollars, not federal dollars.
The state also notes publicly that Medicaid dollars can be used for temporary rental assistance as well as nutrition assistance.
In August, Oregon Gov. Tina Kotek, a Democrat, criticized Republicans’ federal Medicaid reforms, warning they would leave Americans and Oregonians “sicker, hungrier, and less prosperous.”
“I am going to work with Oregon lawmakers and community partners to do all that we can to stand up for Oregonians and get through this needless, callous hardship,” Kotek said.
In his letter to Dr. Oz, Yunker wrote: “The real hardship is what my constituents endure under Oregon’s broken Medicaid program.”
“We’ve barely scratched the surface of the broken Medicaid system,” he added.
https://www.dailysignal.com/2025/11/02/strip-clubs-sex-changes-rental-aid-lawmaker-found-medicaid-spending-shocked/
