Government Shutdown Threatens Key Medicare and Medicaid Services
- Oct 2
- 2 min read
As Democrats and Republicans clash over future health care funding, millions of beneficiaries of major health programs in the United States face uncertainty. Although core programs like Medicare and Medicaid will continue to function because their funding is built into law, experts warn that a prolonged shutdown could lead to serious problems.
The Centers for Medicare & Medicaid Services (CMS) have confirmed they will continue operations during the shutdown. The agency has funding for Medicaid through the end of this fiscal year, and reimbursements are ensured through the first quarter of fiscal year 2026.
However, the administrative apparatus will be significantly affected: the Department of Health and Human Services (HHS), which includes CMS, will temporarily furlough 41% of its staff during the shutdown. Although 53 percent of CMS staff will be retained, certain activities, such as oversight of Medicare and Medicaid contractors and surveys of health care facilities (except those dealing with the most serious incidents), will be suspended.
Consequently, providers, including doctors and hospitals, could experience delays in payments. This potential slowness could make doctors reluctant to schedule appointments for new or existing patients.
One of the first direct consequences for Medicare beneficiaries was the expiration of expanded telehealth services. The pandemic-era rule, which allowed Medicare patients to see their doctors from home and expanded provider coverage, ended.
Telehealth coverage for Medicare reverts to pre-pandemic rules, limiting it primarily to people living in rural areas. This forces Medicare beneficiaries who do not live in rural areas to travel to see their providers in person in most cases. This change could be particularly dangerous for seniors or those who have just returned from the hospital.
The political struggle intensifies around the enhanced subsidies of the Affordable Care Act (ACA). Democrats are demanding the extension of these subsidies, as without them, average total premiums for ACA customers are projected to more than double by 2026, rising to $1,904, up from $888 in 2025. If Congress does not act soon, families could face a sharp increase in health insurance costs.
On the other hand, Community Health Centers (CHCs) provide non-emergency care to approximately 34 million Americans annually (often low-income and uninsured). These centers should maintain funding and staffing despite the shutdown. However, the organization representing them notes that the shutdown adds a layer of uncertainty to their operation, as they have relied on short-term funding extensions over the past two years.
Finally, consequences extend to research: the National Institutes of Health (NIH) will retain only 25% of its staff, suspending basic research and the admission of new patients at the NIH Clinical Center. Experts warn that while a brief disruption will have minimal effects, a prolonged shutdown will negatively impact the quality and progress of research, in addition to affecting federal workers.
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