The Potential Ramifications of a Shutdown on Vital Health Care Programs

The federal government is facing a possible shutdown as several conservative House Republicans continue to oppose a short-term agreement to fund the government.

The current spending laws will expire at 11:59 p.m. on September 30. If a deal is not reached by then, funding will stop temporarily, affecting various government functions, including some healthcare programs.

Here’s how a government shutdown will, and won’t, impact health agencies and services:

Medicare, Medicaid, and Social Security won’t be affected — at least initially

The Centers for Medicare and Medicaid Services (CMS) confirmed it will have sufficient funding for Medicaid for the first three months of fiscal 2024, based on already-appropriated funds.

Medicare and Social Security are mandatory entitlement programs funded by taxes and premiums, so they do not rely on Congress for funding. This means beneficiaries will continue to receive their benefits as usual.

However, certain administrative actions, such as benefit verifications and issuing replacement Medicare cards, will be paused during the shutdown.

Open enrollment for the Affordable Care Act exchanges will begin on November 1. According to the Health and Human Services Department (HHS) contingency plan, CMS will continue federal exchange activities, including eligibility verification, using leftover fees from the previous year.

The Department of Health and Human Services will mostly be protected

This would be the first time since 2013 that the federal health agency would be affected by a government shutdown. The 2013 shutdown lasted just over two weeks.

The 2018 shutdown, which resulted from a dispute between House Democrats and then-President Trump over border security, lasted over 30 days. However, much of HHS had already been funded through its annual appropriations bill.

In a contingency planning document updated last week, HHS stated that its COVID-19 response and clinical research would continue. The Food and Drug Administration (FDA) will continue reviewing drugs and medical devices, as funding for these activities comes from industry-paid user fees.

HHS also mentioned that it will continue to protect human life and property by monitoring disease outbreaks, managing recalls and drug shortages, and caring for medically necessary patients at the National Institutes of Health (NIH) hospital.

The Centers for Disease Control and Prevention (CDC) will continue working on outbreak response, laboratory functions, the President’s Emergency Plan for AIDS Relief (PEPFAR), and emergency operations.

The CDC will also continue the World Trade Center Health Program and the Vaccines for Children program, as these are supported through mandatory funding.

However, the shutdown will have the greatest impact on federal workers 

HHS mentioned that 42 percent of its employees, totaling over 37,000 individuals, will be furloughed without pay starting on the second day of a funding lapse.

The remaining 58 percent of staff are considered “excepted” and will have to work without pay for the duration of the shutdown.

All federal employees will receive back pay once the shutdown ends, but federal contractors do not have that guarantee, including those in maintenance or food services roles.

While doctors and hospitals can continue to submit bills to Medicare and receive payment, the staff shortage may result in reimbursement delays.

According to a 2014 Government Accountability Office report analyzing the 2013 shutdown, grant management activities at NIH effectively stopped due to employee furloughs. However, most current grant recipients were still able to utilize funds.

NIH had to reschedule the review process for over 13,700 grant applications during the shutdown.

Additionally, new patients were unable to register for clinical trials until a small number of employees were recalled to reopen the registry.

The staffing shortages may also impact Medicare application processing.

According to the Committee for a Responsible Federal Budget, over 10,000 Medicare applicants were turned away each day during the 1995-1996 shutdown.

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