The federal government shut down Wednesday after Congress failed to agree on a spending measure to fund the government for fiscal year 2026. At the center of the debate: Failure of a spending measure that would extend health care subsidies under the Affordable Care Act (ACA).
Although the House of Representatives approved a continuing resolution to fund the government through November 21, it didn’t pass the Senate. Democrats wouldn’t back the stopgap funding measure to keep the government running while negotiations continued and Republicans failed to back a spending bill to extend the ACA health care subsidies and reverse cuts to Medicaid that were included in the One Big Beautiful Bill Act.
It's unclear how long the impasse will last. The most recent shutdown in 2018 during the first Trump administration lasted 35 days over a disagreement for funding for a wall on the U.S.-Mexico border.
This time the debate centers on the expiration of ACA marketplace premium subsidies. The payments are expected to double on average next year if the enhanced premium tax credits expire, according to a KFF report. Analysts estimate that subsidized enrollees would see a 114 percent increase from an average of $888 in 2025 to $1,904 in 2026. AHIP said 15 percent of Americans who live in rural America would lose tax credits and there would be a 37 percent increase in uninsured populations for most rural states. Community health centers would also be at risk of closing as federal funding dries up, KFF Health News reports.
Health care programs still running, but with delays
Key federal health programs like Medicare and Medicaid will continue to operate during the shutdown. However, the Department of Health and Human Services (HHS) has announced that 32,460 employees—more than 40 percent of its workforce—will be furloughed, potentially leading to delays in services and administrative support.
The Centers for Medicare & Medicaid Services (CMS) issued guidance on Wednesday to Medicare Administrative Contractors (MACs) to place a temporary hold on claims payments, typically up to 10 business days. Providers can continue submitting claims, but payments will be delayed until the hold is lifted.
The Centers for Disease Control and Prevention (CDC) will suspend some routine operations, including responses to public health inquiries and work on the federal vaccine injury compensation program.
Also impacted: Virtual care flexibilities established during the COVID-19 pandemic have expired. That means most Medicare telehealth services provided in the home or outside rural areas (except for behavioral and mental health services) will end.
CMS offered guidance on telehealth services today and noted that under the Bipartisan Budget Act of 2018, clinicians in applicable Medicare Shared Savings Program Accountable Care Organizations may receive payment for covered telehealth services to certain Medicare beneficiaries without geographic restriction and in the beneficiary’s home. They can continue to bill Medicare for the telehealth services that are allowed under Medicare rules during calendar year 2025 regardless of further congressional action.
Industry expert Shannon Decker, M.Ed., MBA, Ph.D., principal, VBC One, said in a LinkedIn post that the bottom line is that behavioral health telehealth remains protected, but most other telehealth flexibilities end without legislative renewal.
“Organizations should be preparing for operational adjustments, ABN workflows, and close monitoring of Congressional updates,” she wrote in the post. “For stakeholders in Medicare Advantage, ACA, and Medicaid, these developments ripple out to risk adjustment capture, quality gap closure, and access strategy—reinforcing the importance of hybrid and in-person alternatives where needed.”