The White House Office of Management and Budget rescinded a memo on Wednesday, Jan. 29, 2025, that had ordered federal agencies to pause grant, loan and other financial assistance programs, Disability Scoop reported. The memo had been issued earlier that week.
Confusion over Medicaid
The original memo exempted Medicare and Social Security but did not mention Medicaid, according to Disability Scoop. By midday Tuesday, before the pause was set to take effect, Sen. Ron Wyden of Oregon said all of the online portals states use to draw federal Medicaid payments were down. White House Press Secretary Karoline Leavitt later posted that no payments had been affected and that the portals would soon be back online.
After the memo was rescinded, Leavitt posted that the move was not a rescission of the funding freeze itself, only of the memo, which added to the uncertainty. The American Association of People with Disabilities said it kept hearing from disability programs having trouble accessing funds even after the memo was withdrawn.
Why this mattered for providers and DSPs
Medicaid pays for most services for people with I/DD. Even a short outage in the systems states use to draw federal money can delay payments to provider agencies, which run on thin cash reserves and must meet payroll for DSPs every week or two. The episode was an early sign of how federal policy changes in 2025 could ripple into agency finances.