Government Shutdown: Implications for Hospitals and Health Systems

Federal government funding and certain healthcare programs and waivers expired on Wednesday, October 1, after congressional leaders were unable to agree on a stopgap measure to keep the federal government funded, known as a continuing resolution.

In general, Medicare is largely unaffected by the shutdown, as it operates with mandatory funding not subject to annual appropriations.  Medicaid relies on annual appropriations, but the U.S. Department of Health and Human Services (HHS) released a contingency plan announcing that the Centers for Medicare & Medicaid Services (CMS) has sufficient funding for Medicaid through the first quarter of the fiscal year, with uncertainty beyond that period, and to make payments to eligible states for the Children’s Health Insurance Program (CHIP).  CMS will use fees collected from insurers to sustain the federal Affordable Care Act (ACA) health insurance exchange.

Unrelated to annual appropriations, the legal authorities for key pandemic-era healthcare programs also expired on Wednesday, October 1, including Medicare reimbursements for telehealth and hospital-at-home services.

Connecticut Impact

At a Capitol news briefing on Wednesday, Governor Ned Lamont said the Connecticut Women, Infants, and Children (WIC) program, which provides food and formula for an estimated 52,000 pregnant and postpartum individuals, infants, and young children at a cost of about $200,000 each day, is the most immediate concern.  Lamont said the state has sufficient reserve funds to sustain that program into the foreseeable future.  The more expensive Supplemental Nutrition Assistance Program (SNAP), costing about $72 million per month, is funded through the end of October.

In addition to preserving nutrition supports, the state is focused on access to affordable healthcare coverage, as premiums for certain insurance exchange customers are expected to surge if pandemic-era ACA subsidies expire at the end of the year.

“A lot of you are going to get a notice saying, ‘Watch out, your health insurance costs could go up quite a bit.’  That notice goes out in the middle of October,” Lamont said, explaining that state officials are working closely with Access Health CT, Connecticut’s official health insurance marketplace, to develop alternative, more affordable plans.

Connecticut’s congressional delegation continues to demand permanent funding for enhanced premium tax credits.  The Connecticut Hospital Association (CHA) urges Congress to renew the enhanced tax credits as soon as possible.  An Access Health CT analysis estimates that 30–35% of its 150,000 insured members could lose coverage without an extension of these credits.  Open enrollment for state-based exchange plans begins November 1.

CHA supports the continued and permanent funding for enhanced premium tax credits and the extension of other critical healthcare provisions.  CHA will continue to share information related to the shutdown as it becomes available.