Medicaid funding to states is frozen due to a nationwide outage in government payment processing systems, causing mass confusion across the country.
Congressional Democrats said Trump’s executive orders pausing federal spending caused the problem, but the White House denied that was the case. The outage comes less than a day after the White House issued a sweeping freeze on funding for grants and aid except for Medicare and Social Security.
The Medicaid issues apparently came after the OMB memo was issued Monday night, which ordered a sweeping freeze and created confusion over which programs would be affected. In a follow up memorandum on Tuesday, OMB clarified that Medicaid should not be affected and by late afternoon Tuesday the White House said that it was working to ensure the portal for accessing Medicaid payments is open.
“We have confirmed no payments have been affected — they are still being processed and sent,” White House Press Secretary Karoline Leavitt posted on X. “We expect the portal will be back online shortly.”
Sen. Ron Wyden (D-Ore.) posted on X on Tuesday that the portals for all states were inaccessible.
“This is a blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed,” Wyden said in a statement.
CMS did not return a request for comment on the status of Medicaid payments.
Why it matters: States and the federal government jointly fund Medicaid, which offers insurance to more than 70 million Americans. States file expected expenses into a payment portal and then receive the federal match. States then pay providers for the care.
However, several states tried on Tuesday to access the federal payments and were not able to.
Illinois could not access federal funding sites and disbursement systems, including those on Medicaid, according to Democratic Gov. JB Pritzker in a statement Tuesday. Democratic Connecticut Sen. Chris Murphy said the state’s Medicaid payment system has been turned off and that doctors and hospitals cannot get paid, and Rep. Maxwell Frost (D-Fla.) confirmed the same thing for Florida.
The Massachusetts’ Medicaid and Children’s Health Insurance Program agency, MassHealth, is experiencing delays and system access issues with its payment management systems, according to a source familiar with the issue.
Sen. Raphael Warnock (D-Ga.) reported similar problems with the Medicaid portal and other ripple effects.
“People are alarmed. They are feeling the effect of this draconian, unprecedented power grab in real time,” he said.
Rep. Richard Neal (D-Mass.) posted on X that community health center funding has also been disrupted.
What’s next: The National Association of Medicaid Directors said in a statement it is seeking clarification from CMS on the funding freeze order.
Kelly Garrity, Marcia Brown and Adam Cancryn contributed to this report.
