Health sector seeks wins as government shutdown drags on

Modern Healthcare – Tuesday, October 21, 2025
By Michael McAuliff

The government may be shut down but it’s no vacation for healthcare lobbyists.

The standoff between the Republican congressional majority and the Democratic minority that triggered the shutdown at the start of fiscal 2026 on Oct. 1 is centered around a battle over health insurance exchange subsidies, but there’s much more on the line for the healthcare sector.

With vital healthcare programs such as Medicare coverage of telehealth services and funding for federally qualified health centers on ice, the stalemate on Capitol Hill presents both a challenge and an opportunity for the industry and its operatives in Washington.

The challenge is that healthcare interests dependent on the federal government must navigate political parties whose intransigence is approaching historic levels while not alienating either side. The opportunity is that, with all the focus on exchange plans, many on Capitol Hill have greater freedom to consider issues outside the spotlight.

No one thinks the shutdown is a good thing, said a lobbyist who spoke on background to discuss the situation freely. But the silver lining is that both advocates and congressional staff have time to focus on more complicated issues, the lobbyist said.

What that means for different groups that are trying to sway Congress varies depending on their circumstances, particularly the extent to which the shutdown and inaction on Capitol Hill are directly affecting them.

Subsectors feeling immediate impacts, or at risk of harm in the near future, have taken a louder, more public approach.

For instance, telehealth and acute hospital-at-home providers, which lost access to fee-for-service Medicare reimbursements when the legal authority expired Oct. 1, are pleading daily for Congress to restore Medicare coverage of their services.

“Every day that goes by is really a calamity, renewed and expanded, for our community,” said Kyle Zebley, senior vice president of public policy at the American Telemedicine Association.

Telehealth has extremely broad, bipartisan support and Zebley and the association’s members have been in their ears, offices and inboxes constantly, and generally getting great access, he said. The telehealth group hopes Congress can at least ease the pain for the industry, which may be unlikely. But at least the reaction the lobbying effort is getting shows promise lawmakers will enact a more enduring structure for telehealth in the future, he said.

“They could end it today, if they wanted — just for us — putting aside dynamics around the shutdown,” Zebley said. “We’re hopeful that this can be a rallying cry for permanency and, if not permanency, the longest extension possible.”

Community health centers similarly are already impacted by the shutdown. Congress hasn’t enacted a full reauthorization of the federally qualified health center program for two years. These providers have gotten by via six stopgap funding bills and are subsisting on money left over from those. When the federal government’s share of their budgets will run out is unclear, but community health centers are pushing both for a quick resolution and a longer-term fix.

“The challenge right now is to understand the dynamic that we’re going into towards the end of the year with the government currently shut down,” said Joe Dunn, chief policy officer of the National Association of Community Health Centers. “For a program that relies on federal funding and is already operating on short-term extensions, the uncertainty and the signal that it sends to the health center workforce is another complicating factor as we try to adjust to some difficult financial outlooks.”

For other parts of the healthcare world, the effects of the shutdown are slower to manifest since most Medicare and Medicaid, the largest sources of federal money for providers, operate using mandatory funding not subject to appropriations every fiscal year.

Still, Congress has been attempting and failing to address a slew of issues for years that remain unresolved, including bipartisan initiatives to limit prior authorizations, rein in pharmacy benefit benefit managers, and overhaul the Medicare payment system for physicians.

A healthcare package that would have dealt with some of those issues — and would have spared telehealth providers and community health centers from their current woes — came within hours of passing last December, but then-President-elect Donald Trump and his then-adviser Elon Musk deep-sixed it at the last minute.

Several advocates said many older issues are still in play, and congressional offices are taking calls about them to produce a new healthcare package.

“It is still a conversation within parties, but there’s not been any serious touching of gloves across the aisle,” said Jonathan Burks, executive vice president for economic and health policy at the Bipartisan Policy Center, a think tank.

Still, those more bipartisan ideas will come together at some point, and may emerge during a very tight timeframe if the shutdown stretches on, Burks said. That could be a bonus for healthcare groups that have maintained active discussions on Capitol Hill.

“The time between the negotiating and getting real bills on the floor is going to be compressed, but you’re not starting from zero,” Burks said.

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