The Trump administration's order to freeze nearly all federal grants, initially appearing to include Medicaid funding, caused widespread panic and confusion in the health sector. While the White House later clarified that mandatory programs like Medicaid were exempt, the abrupt halt to funding access through critical online portals raised serious concerns about the immediate impacts on various health programs.
KFF Health NewsJan 28 2025 States and the nation's health industry were thrown into disarray after the Trump administration ordered Monday that the government freeze nearly all federal grants at 5 p.m. ET Tuesday, a sweeping directive that at least initially appeared to include funding for Medicaid, the state-federal health insurance program that covers more than 70 million Americans.
Around midday Tuesday, as state health officials pressed the federal government for clarity, the White House Office of Management and Budget — which issued the Monday memo — put out new guidance clarifying that "mandatory programs like Medicaid" were not included in the freeze. Separate from the freeze, congressional Republicans are discussing cutting the nearly $900 billion program, arguing costs have ballooned with enrollment, notably including the program's expansion to cover more low-income adults. Lawmakers are also eyeing ways to save money for Trump's other legislative priorities — in particular, extending the tax cuts from his first term that expire at the end of this year.
The original freeze order came in the form of a vaguely worded two-page memo from the Office of Management and Budget to all federal agencies directing them to "temporarily pause all activities related to obligation or disbursement of all Federal financial assistance." Democrats in Congress expressed outrage at the Trump administration for pausing federal funding not only to Medicaid but also to numerous other programs, including the Supplemental Nutrition Assistance Program, also known as food stamps, the WIC nutrition program for pregnant and postpartum women and infants, and school meal programs for low-income students.
HEALTHCARE MEDICAID FEDERAL FUNDING TRUMP ADMINISTRATION CONGRESS
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