On Jan. 27, the White House announced a plan to pause federal grants and loans as President Donald Trump’s administration begins an across-the-board ideological review of its spending.
Administration officials said the decision was necessary to ensure that all funding complies with Trump’s executive orders, which are intended to undo progressive steps on transgender rights, environmental justice and diversity, equity and inclusion, or DEI, efforts.
The wording of the original memo was vague about the programs it would impact. The administration sent out clarifying memos to explicitly say that federal assistance to individuals would not be affected, including Social Security, Medicare, food stamps, student loans and scholarships.
The White House planned to enforce the pause Tuesday afternoon, but a federal judge temporarily blocked the action minutes before it was set to go into effect. Just minutes after the ruling, Democratic attorneys general from 22 states and the District of Columbia filed their own lawsuit seeking to block and permanently prevent the administration from cutting off federal funding.
Multiple VERIFY readers, including Amy, Kelly and Susan, have asked if the federal funding freeze affects Medicaid, the nation’s public health insurance program for people with low income. Here’s what we know.
THE QUESTION
Does the federal funding freeze affect Medicaid?
THE SOURCES
- A memo sent by Matthew J. Vaeth, acting director of the Office of Management and Budget
- Payment Management System by the Program Support Center (PSC) of the U.S. Department of Health and Human Services (HHS)
- White House press secretary Karoline Leavitt
- The Office of Illinois Gov. JB Pritzker
- Sen. Ron Wyden (D-OR)
- Sen. Chris Murphy (D-CT)
- Sen. Brian Schatz (D-HI)
- Rep. Maxwell Frost (D-FL)
THE ANSWER
No, the federal funding freeze does not affect Medicaid.
WHAT WE FOUND
A day after the original memo was issued and after multiple reports that Medicaid payment portals had been shut down in all 50 states, the White House clarified that the federal funding freeze would not affect the program.
Medicaid is a joint federal and state program that helps cover medical costs for some people with limited income and resources. As of October 2024, more than 72 million people were enrolled in Medicaid in the U.S.
The U.S. Department of Health and Human Services (HHS) says that the federal government has general rules that all state Medicaid programs must follow, but each state runs its own program, which means eligibility requirements and benefits can vary from state to state.
On Jan. 27, Matthew Vaeth, the acting director of the Office of Management and Budget, sent a memo announcing a freeze on federal grants and loans, but it did not clarify which programs the pause would affect, except Social Security and Medicare.
The next day, staff in all 50 states trying to access Medicaid funding through payment websites reported they were locked out, according to Democratic senators Ron Wyden of Oregon, Chris Murphy of Connecticut and Brian Schatz of Hawaii.
“My staff has confirmed reports that Medicaid portals are down in all 50 states following last night’s federal funding freeze,” Wyden said. “This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed.”
Illinois Gov. JB Pritzker’s Office told VERIFY that state agencies had reported issues with accessing federal funding sites and disbursement systems, including Medicaid systems. Florida Congressman Maxwell Alejandro Frost also wrote on social media that the Medicaid portal had been shut down in the state.
The federal Payment Management System (PMS), which is used by the HHS to manage federal funding disbursements for Medicaid and other programs to states and other grantees, posted a notice on its website saying payments were delayed “due to Executive Orders regarding potentially unallowable grant payments.”
“PMS is taking additional measures to process payments. Reviews of applicable programs and payments will result in delays and/or rejections of payments,” the notice said.
On Tuesday afternoon, the White House sent out a second memo clarifying that the freeze would not impact mandatory programs like Medicaid, SNAP, funds for small businesses, farmers, Pell Grants, Head Start, rental assistance, and other similar programs.
White House press secretary Karoline Leavitt later said on X that “The White House is aware of the Medicaid website portal outage,” adding that “no payments have been affected — they are still being processed and sent.”
“We expect the portal will be back online shortly,” Leavitt said.
The Associated Press contributed to this report.