How a Federal Government Shutdown Would Affect Hospitals and Health Care

September 28, 2023

The deadline for Congress to reach a deal to fund the federal government is fast approaching, as federal agencies begin preparations for a potential shutdown.

This week, lawmakers in both chambers are working on stopgap proposals to fund the government beyond September 30. Here’s what you need to know about how the potential shutdown would affect hospitals and health care:

• Where things stand:  Earlier this week, the Senate unveiled a continuing resolution to fund the government through November 17, but the bill does not have support in the House, Speaker Kevin McCarthy said. House stopgap proposals seeking deeper spending cuts face similar challenges in the Senate. Lawmakers are approaching the October 1 deadline to reach a funding deal.
• Medicare and Medicaid:  Funding for Medicare and Social Security are non-discretionary and would continue during a shutdown.
  • Medicaid has sufficient funding through the first quarter of fiscal year 2024, CMS officials have said.
  • CMS will continue to make payments to eligible states for the Children's Health Insurance Program.
• Open enrollment:  Funding for the upcoming Medicare (October 15) and Affordable Care Act (Pennie, November 1) open enrollment periods has been allocated, so plan selection should not be affected, the Kaiser Family Foundation reports.
• Staffing plans:  The U.S. Department of Health and Human Services estimates it would retain 51,293 staff and furlough 37,325 employees, per its contingency plan. 
  • CMS would retain about 49 percent of its staff in the event of a shutdown, ensuring Medicare and other funded programs maintain operations.
• Drug pricing negotiations:  Negotiations between the Biden administration and the makers of 10 common Medicare drugs were set to begin during October, but those negotiations could be pushed back due to staffing concerns, federal leaders said last week.

“HHS’s main priority in the absence of an enacted annual appropriation is to protect the health of Americans,” the agency noted in its contingency plan.

HAP will continue to monitor the latest developments on the federal funding negotiations and provide updates to members. For questions, contact John Myers, vice president, federal advocacy.