The possibility of a government shutdown could have significant consequences, including disruptions to services provided by the Centers for Medicare & Medicaid Services (CMS). While Medicare benefits and Medicaid funding for the next three months will not be affected, CMS will retain fewer than half of its employees, many of whom will go unpaid during the shutdown. This reduced staffing could lead to a lack of oversight on health benefit programs, temporary halts in administrative tasks such as issuing replacement Medicare cards, and delays in payments to hospitals and medical providers. Millions of Americans rely on Medicare benefits, and the last major disruption occurred during the 1995-1996 shutdown when thousands of Medicare applicants were turned away each day.
The current shutdown is the result of ideological divisions between House Republicans and Democrats over reducing the national debt. Republicans believe that the risk of a shutdown is worth it to achieve more aggressive spending cuts, even though the programs under discussion only account for a small portion of the overall budget. Some Democrats have labeled it a “Republican shutdown” and expressed concerns that the impacts could extend to Social Security or Medicare benefits. However, since much of the operational work is done by administrative contractors, it is unlikely that consumers will see any immediate problems in accessing medical services.
The potential shutdown is not expected to impede Medicare drug pricing negotiations, which are aimed at helping seniors and disabled Americans afford costly medications. The funding for these negotiations has already been allocated in the Inflation Reduction Act signed by President Biden in 2022. While a delay may occur if a shutdown happens, it is not expected to ultimately affect the negotiations. Republicans and Democrats have a few more days to reach an agreement before the government shuts down on October 1st.