The Trump administration’s freeze on federal grants sparked chaos and confusion at state Medicaid agencies on Tuesday.

The pause has raised concerns among health officials and state leaders, as the vague wording leaves billions in Medicaid funding at risk, potentially disrupting coverage for millions of Americans.

Distribution of all federal grants and loans will be suspended at 5 p.m. Tuesday, per President Donald Trump’s direction. An Office of Management and Budget (OMB) memo that was released last night revealed that the impacted agencies must submit the appropriate information for their paused programs by Feb. 10, 2025, for review.

The White House Office of Management and Budget circulated a new memo Tuesday afternoon clarifying which programs will be subject to the pause on federal grant funding President Donald Trump ordered Monday night.

Federal agencies must stop disbursing financial assistance starting at 5 p.m. today under a new budget directive, threatening funding for providers and creating significant uncertainty for Medicaid payments to states.

By Tuesday afternoon, a federal judge had put the order on a brief stay while challenges to the administration work their way through the courts. But the controversy was far from over.