White House Rescinds Federal Funding Pause

Alliance Daily

On Monday evening, January 27, the Trump Administration’s Office of Management and Budget (OMB) issued guidance pausing Federal Financial Assistance until an appointee could review whether the spending was in-line with Administration priorities. Due to the wording of the memorandum, specifically a footnote specifying that Medicare and Social Security would not be impacted, some media outlets and policymakers raised concerns that Medicaid payments would, in fact, be subject to the payment pause. However, it is important to note that Medicaid, just like Medicare and Social Security, is an entitlement and not discretionary grant funding. The mandatory nature of the funding should prevent it from being paused.

On January 29, the White House Office of Management and Budget (OMB) rescinded its earlier memo that temporarily paused certain federal grants, loans, and financial assistance programs. The initial memo, issued earlier in the week, led to some confusion about its scope and impact. While OMB had clarified that entitlement programs like Medicare and Medicaid were not affected, uncertainties remained regarding which specific grants, loans, or programs would be subject to the freeze and how these determinations would be made.

See our Alliance Daily article for additional details about the pause. This funding pause was temporarily stayed by a federal court until at least February 3, pending further legal proceedings. The Alliance will continue to monitor for any further developments.

Despite the clarification that Medicaid is not subject to the funding freeze, several news outlets are reporting that State Medicaid Officials are unable to access the Medicaid “payment management system.” This could result in some delay in payments; however, it is likely that this is a short-term issue that is tied to the broader payment freeze and is likely to be resolved once the Administration is able to implement exceptions to the halt on disbursement. The Alliance will keep members informed as we learn more about the future of these funds.

The original OMB memo is available HERE.