Up to 74m Americans unable to access healthcare after Trump's federal funding freeze causes Medicaid chaos

Up to 74million Americans' access to healthcare hung in the balance Tuesday as officials in all 50 states reported disruptions to their Medicaid programs.

The chaos came in the wake of the Trump administration's abrupt funding freeze, which appears to have affected organizations and agencies that depend on federal health department funds.

These include state Medicaid programs which have been unable to log into the Payment Management Services (PMS) web portal, operated by the Department of Health and Human Services, which manages billions of dollars in payments annually. 

The White House has said it is 'aware of the Medicaid website portal outage' but insisted no payments had been affected and were instead just delayed in being processed.

But state and federal officials say people may have already been impacted.

Connecticut Sen Chris Murphy, meanwhile, said his state's Medicaid payment system 'has been turned off.' 

'Doctors and hospitals cannot get paid,' he said. 'Discussions ongoing about whether services can continue.'

Sen Ron Wyden, an Oregon Democrat, said Tuesday that his staff has 'confirmed reports that Medicaid portals are down in all 50 states' following the freeze, calling it a 'blatant attempt to rip away health insurance from millions of Americans overnight and will get people killed.'

Medicaid is the government health insurance program for low-income Americans and families paid for both by the federal and state governments that covers everything from doctor visits and preventive care to prescription medicines and long-term hospital stays.

The freeze was set to take effect at 4pm central time on Tuesday, but Illinois Gov JB Pritzker's office reported that the state lost access to Medicaid earlier that morning.

The Medicaid payment portal page included a large banner announcement saying that, due to 'Executive Orders regarding potentially unallowable grant payments... Reviews of applicable programs and payments will result in delays and/or rejections of payments.'

Medicaid is jointly funded by the federal government and overseen by the Department of Health and Human Services. 

The department disperses a percentage of funding based on a calculation of the state's needs, while state governments pay the rest.

The memo sent out to government agencies on Monday stated that its orders should not be 'construed' to apply to Social Security and Medicare programs for seniors and said that the hold 'does not include assistance provided directly to individuals.'

But the programs affected do include 'financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.'

The order sent shockwaves through Washington, and questions quickly emerged about whether it would apply to Medicaid funding. 

This funding is not provided directly to individuals per se, but rather to healthcare providers, such as doctors, hospitals, or pharmacies, for the services they provide to eligible participants.

Before losing access to the Medicaid payment portal, the state's comptroller Susana Mendoza said her office had already processed all of the bills it had on hand and had received its contribution from the federal government before the freeze went into place.

'However, I am very concerned about how long this "freeze" may last,' she said.

'It is reckless for President Trump to take this action with essentially no guidance or explanation about exactly which federal funds are included, leaving states to pick up the pieces and figure out how to best protect and provide services to their residents.'

A White House state health director told the Washington Post that Medicaid was never meant to be affected and that the administration was aware that more than 20 states could not access federal funds through the system.

The administration confirmed Tuesday that Medicaid funding is exempt from the freeze, but that did not stop the chaos. 

When reporters at today's White House Press Briefing asked, Ms Leavitt: 'I’ll check back on that.'

The legality of restricting the flow of money to states is dubious.

Senior House and Senate Committees on Appropriations members said that the Trump administration's 'efforts to undermine Congress’s power of the purse, threaten our national security and deny resources for states, localities, American families and businesses.'

Congress allocates funding for Medicaid as part of the annual federal budget. The Constitution gives exclusive power to control federal spending to Congress through the appropriations process.

Medicaid is authorized under the Social Security Act, and any changes to its funding — such as pausing or withholding payments — would require legislative action or a lawful administrative process.

The funding freeze throws a laundry list of other programs that promote food safety, combat crime, provide college aid, produce medical research, and respond to natural disasters into question.

Several states have had difficulty getting previously awarded funds and reimbursements for preschool centers in the federal government's Head Start program.

Local housing organizations that cater to low-income individuals and families are also panicking about having the necessary funding to pay rents on February 1.

The National Council of Nonprofits and the American Public Health Association filed suit against the Office of Management and Budget, which sent out the memo, seeking a temporary restraining order to 'maintain the status quo until the Court has an opportunity to more fully consider the illegality of OMB’s actions.'