A government shutdown could have severe consequences for federally funded programs, including services provided by the Centers for Medicare & Medicaid Services (CMS). While Medicare benefits will not be affected and Medicaid has funding for the next three months, CMS will retain fewer than half of its employees, many of whom will be unpaid, until the shutdown ends. This limited staffing could result in disruptions to oversight on health benefit programs and delays in Medicare payments to hospitals and medical providers. The last time Medicare was significantly impacted by a shutdown was in 1995-1996 when thousands of Medicare applicants were turned away each day.
Millions of Americans rely on Medicare benefits, making the potential disruptions to the agency a cause for concern. The current shutdown is due to ideological divisions between House Republicans and Democrats regarding reducing the national debt. Some Democrats have labeled it a “Republican shutdown” and worry that the impacts could extend to Social Security and Medicare benefits. However, since much of the operational work is done by administrative contractors, consumers are unlikely to experience any significant issues in accessing healthcare services.
Despite the potential shutdown, Medicare’s drug pricing negotiations are expected to continue. $3 billion in funding for the negotiations has already been allocated through the Inflation Reduction Act signed by President Biden in 2022. Although a delay in these negotiations may occur, it is not expected to have a lasting impact as the negotiated prices will not take effect for several years. Republicans and Democrats have a limited time to reach an agreement before the shutdown deadline on October 1st.
