Medicaid service providers say federal funding freeze is cause for concern
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The Trump administration announced Wednesday that it will temporarily suspend $259 million in Medicaid payments to Minnesota due to concerns about fraud in certain state social service programs.
This decision has created confusion among providers who rely on Medicaid funding to deliver services.
One such provider is a Minnesota-based nonprofit that offers affordable and accessible housing for people with disabilities, seniors and veterans, many of whom use wheelchairs or are dependent on mobility devices.
Josh Berg, director of Minnesota services at Accessible Space, said all revenue for the organization’s services comes from Medicaid dollars.
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The organization provides support services that enable the state to offer alternatives, such as in-home and out-of-home programs for people with disabilities, rather than placing Medicaid-eligible individuals in hospitals or care facilities.
Berg said these services are likely among the first to be cut.
“Part of it is, we just don't know,” he said. “And I think most of us are in this space. Whether it's the state legislators or DHS folks or providers, we don't know what the impacts of this decision are going to be.”
Staff transfer people from their beds to their wheelchairs, Berg said. They also help with toileting, bathing, medication management oversight and coordinating transportation to appointments and into the community.
“We do all the hands-on care that they can't do independently because they're physically limited based on whatever caused them to have that health condition,” Berg said. “Some need 24/7 support, others need a few hours here or there. They have jobs, and so we're their hands and their feet, essentially; and (then we) get out of their way to let them live their lives, like any of us.”
A coalition of nonpartisan organizations across Minnesota that advocates for individuals who rely on Medicaid expressed its deep alarm over the drastic funding cut to Minnesota’s Medicaid program and said that the state is being targeted unfairly.
“Medicaid ensures Minnesotans who have physical or developmental disabilities get care and supports they need so they can live independently, with dignity, and contribute to their communities,” the Medicaid coalition wrote in a statement. “Stripping funding from these types of basic health needs is simply cruel.”
The National Alliance on Mental Illness Minnesota said the funding freeze will “disproportionately harm people living with mental illnesses who depend on Medicaid for access to treatment, medications, housing supports and essential community-based services. Medicaid is the largest payer of mental health services in Minnesota. It is not a political bargaining chip; it is a lifeline.”
Vice President JD Vance said the administration was pausing funding “in order to ensure that the state of Minnesota takes its obligations seriously to be good stewards of the American people’s tax money.”
Ellie Wilson, executive director of the Autism Society of Minnesota, told MPR News the sweeping cuts will hurt people who rely on those services and said there are better ways to fix fraud.
“I think if actual disability advocates were brought to the table to collaborate, to strategize on how to improve these systems without harming people with disabilities, we could be using a scalpel and not a hammer. And I could tell you, there would be a ton of support from the disability community to do that, and that opportunity is not being afforded to us,” Wilson said.
Minnesota Gov. Tim Walz criticized the funding freeze as “totally illegal and unprecedented,” noting that “no state has experienced this before.”
He described it as “a campaign of retribution” and said President Trump is using the federal government to punish blue states like Minnesota.
“These cuts will be devastating for veterans, families with young children, individuals with disabilities and working people across our state,” Walz said.
Berg from Accessible Space emphasized that any cuts to Medicaid funding will directly result in reduced services.
“My understanding is that the state is going to have to pick up the cost,” he said. “But I guess that remains to be seen.”
