Trump backtracks on federal funding pause after Medicaid chaos
A day after releasing a memo ordering a freeze on funds flowing to federal programs and grants, the Trump administration has rescinded the order, which was set to go into effect Tuesday evening.
The change in plan comes after a federal judge halted the order on Constitutional grounds, pending judicial review. It isn’t entirely clear what services would have been disrupted by a funding pause, but the scope of the memo seemed to include disaster relief, research grants, education funding and possibly healthcare.
“Federal agencies must temporarily pause all activities related to obligation or disbursement of all federal financial assistance,” the order instructed, listing Medicare and Social Security as exceptions, along with “assistance provided directly to individuals.”
The White House later clarified the pause was not meant to apply to any services where the public is a direct beneficiary, including Medicaid and food stamps. However, the memo only specifically excluded Social Security and Medicare.
Moments after issuing the command, Medicaid portals across the country were reportedly inaccessible, leaving providers and hospitals unable to access payment services.
The White House has since blamed that disruption on an “outage” and denied there was any intent to pull state Medicaid funds. Additionally, press secretary Karoline Leavitt said payment systems were not impacted by the outage or the freeze on federal funds.
"We have confirmed no payments have been affected—they are still being processed and sent. We expect the portal will be back online shortly," Leavitt said in a post on Twitter/X.
By Wednesday morning, state Medicaid portals appeared to be functioning normally. HealthExec has reached out to the Centers for Medicare & Medicaid Services (CMS) for clarity on what exactly happened but has yet to receive a reply.
This is a developing story.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.