Federal Action Taken on Healthcare Financing, Payments

Recently, the Trump Administration took two decisive actions that indicate it is moving on from the past, both in terms of how it spends its money and how it sends its money to you.  

First up, the Trump Administration made headlines for rescinding $12 billionin COVID-era funding to states, cities, and organizations from the Centers for Disease Control and Prevention (CDC) and the Substance Abuse and Mental Health Services Administration (SAMHSA).

A U.S. Department of Health and Human Services (HHS) statement on the matter said that the pandemic is over, and “HHS will no longer waste billions of taxpayer dollars responding to a non-existent pandemic that Americans moved on from years ago.” It noted that the agency will focus on chronic diseases moving forward.

State health officials across the country were immediately concerned, as the funds were terminated the same day the notices went out. It was reported that health departments, which are labeled as chronically underfunded, quickly prepared to lay off dozens of epidemiologists and data scientists, and that thousands of health department employees could ultimately lose their jobs. While the funds were originally intended for COVID testing and vaccination, the allowable uses were expanded last year, and the money was reportedly now being used for things like tracking infectious diseases, mental health services, updating antiquated health software systems, and long COVID research.

Several governors have released statements about the announced cuts. Connecticut’s governor wrote that he is “urging the Trump Administration to reverse this rash and impulsive decision,” while New York Governor Hochul promised to “fight tooth and nail.” And indeed, a coalition of 23 Attorney Generals sued in federal court in Rhode Island alleging that the government did not provide a “rational basis” for the cuts.

While GOP governors have been generally more quiet on the cuts, New Hampshire’s GOP governor reported that when she spoke to the Administration to ask them to reconsider, she was told the decision was permanent.

Second, President Trump issued an Executive Order on payment modernization last week that will change the way the government does business. The order mandates that the government will cease issuing any paper checks for all of its disbursements, including benefits, vendor payments, and tax refunds. It requires all agencies to transition to modern EFT methods to disburse these funds, such as direct deposit, credit cards, and real-time transfers.

It does maintain some exceptions for the 4 percent of Americans without banking access, certain emergency payments, and special cases, but it also promises a public awareness campaign that will assist people in figuring out how to access digital payments from the government.

This is in service of the President’s crackdown on what he labels “waste, fraud, and abuse in government.” The Order’s Fact Sheet highlights how checks impose unnecessary delays in payment and additional costs to taxpayers to maintain the necessary infrastructure for sending checks, and increases the risk of fraud and mail theft. This Order could certainly have been influenced by the FBI’s report in late January that mail theft-related check fraud has doubled just since 2021. 

Upon signing the Order, Pres. Trump stated that this was something that should have been done 30 years ago – and that the government really needs to catch up with the technology revolution going on.

It appears the Trump Administration’s focus here is onward and upward from the events and methods of years prior, especially when it comes to what it calls “America’s Bank Account.”