Trump orders freeze on grants and loans: Know what it means? And why did Trump do it

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A senator said Medicaid reimbursement portals were shut down in every US state on Tuesday after the Trump administration ordered a halt on federal grants and loans.

But the White House later said it expected the system to be “back online soon” without any impact on payments.

“My staff has confirmed reports that Medicaid portals are shut down in all 50 states after the federal funding halt last night,” Senator Ron Wyden, D-Ore., wrote in a post on the social media site X.

“This is a blatant attempt to strip health insurance from millions of Americans overnight and will kill people,” he wrote.

Senator Chris Murphy, D-Conn., said, “Connecticut’s Medicaid payment system has been shut down.”

“Doctors and hospitals are unable to get paid,” Murphy wrote in a tweet. “Discussions are ongoing about whether services can continue.”

Senator Brian Schatz, D-Hawaii, tweeted, “This is Trump’s shutdown, except this time it’s illegal.”

White House spokeswoman Caroline Levitt later wrote in a tweet, “The White House is aware of the Medicaid website portal outage.”

“We have confirmed that no payments have been impacted — they are still being processed and sent,” Levitt said. “We hope to have the portal back online soon.”

Several states, including Arizona and Connecticut, regained access to their portals on Tuesday.

As of October, 72,058,701 Americans were enrolled in Medicaid, which provides health coverage to mainly low-income people, in addition to pregnant women, the elderly and people with disabilities. Medicaid is jointly funded by the federal government and the states.

Medicaid, along with other programs including food stamps, small business assistance, Head Start, rental assistance and federal Pell grants for college students, are to be excluded from the Trump administration’s funding freeze, according to a memo released by the Office of Management and Budget on Tuesday afternoon.

This shutdown in access to the Medicaid system came after Acting OMB Director Matthew Vaeth issued a memo ordering a “temporary pause of agency grants, loans and other financial assistance programs.”

The memo requires federal agencies to identify and review all federal financial assistance programs and supporting activities consistent with President Donald Trump’s policies.

Earlier on Tuesday, when Levitt was asked whether Medicaid payments were affected by the OMB order, he told reporters at the White House, “I will double-check on this and get back to you”.

Murphy hit back at Levitt in a tweet, writing, “72 million people depend on this health insurance and you have to contact us?!? Are you kidding?”

CNBC has sought comment from the Centers for Medicare & Medicaid Services, which oversees the Medicaid system.

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