How a Government Shutdown Could Have Impacted Healthcare

Late Saturday evening, United States President Joe Biden signed a last-second spending bill that will keep the federal government open for the next 45 days.

The last time the U.S. experienced a government shutdown was from December 22, 2018 to January 25, 2019. The 35-day shutdown under the Trump administration was the longest closure in four decades. Since 1990, the federal government has shut down six times.

A government shutdown could have significantly impacted research completed by federal agencies like the National Institute of Health. However, Americans on Medicaid or Medicare would have seen few effects on their coverage benefits.

More than 10,000 Medicare applicants were temporarily turned down during the 1995 to 1996 shutdown. Director of Health Policy at the Committee for a Responsible Federal Budget, Josh Gordon, notes it would take significant time for government-funded health plans to be impacted.

"If you are already in Medicaid or Medicare or the Affordable Care Act, there really is no impact if it lasts a month or two," Gordon said. "In general, it is fair to say Americans would not see any impacts with their coverage of Medicaid or Medicare. A government shutdown is something Americans should worry about, but not if you are on one of these bigger federal government plans."

Medicare is a federal insurance plan for individuals who are 65 or older. In some cases, individuals under 65 with certain disabilities or conditions may be eligible for Medicare. Medicare is one of the "mandatory" spending programs that have permanent spending. Therefore, Congress does not need to pass legislation to continue its funding because it is dictated by prior law.

The Affordable Care Act, also known as Obamacare, was signed into law in 2010 to provide uninsured Americans with more options. Medicaid expansions and subsidies for insurance plans available on HealthCare.gov are mandatory spending components of the Affordable Care Act.

Meanwhile, Medicaid is a joint federal and state program that covers medical costs for some individuals with lower income and resources. Medicaid is not considered mandatory spending like Medicare or Social Security, but a combination of mandatory and discretionary spending.

Gordon said prolonged government shutdowns, more than a few months, could impact funding states receive from the federal government to continue their Medicaid programs.

Institutions like the NIH, Department of Health and Human Services (HHS), and Centers for Disease for Control and Prevention (CDC) fall under discretionary spending programs. These programs rely on funding from appropriations bills. Congress must pass 12 appropriation bills each year in order to fund various federal agencies and programs.

Ultimately, it is up to the Biden administration to determine how federal agencies are affected by a government shutdown. According to the White House’s Agency Contingency Plans, 42% of HHS staff would be furloughed in the case of a government. The HHS is responsible for providing effective health and human services, plus continuing advances in medicine, public health, and social services.

The federal government accounts for 25% of all medical research within the U.S. The NIH is the largest public funder of biomedical research in the world. In the 2022 to 2023 fiscal year, the NIH received $45 billion for research to enhance life, fight illness, and reduce disability.

"Agencies that depend primarily on annual appropriations, such as NIH, would largely suspend operations, except for staffing necessary to protect life and property and a few other exceptions," Senior Fellow at the Center on Budget and Policy Priorities Paul N. Van de Water told Healthnews. "Almost 80 percent of NIH staff would be furloughed."

Government shutdowns have the biggest impact on federal employees. The Committee for a Responsible Federal Government says around 380,000 employees were furloughed during the 2018 to 2019 partial government shutdown.

Furloughed federal employees who are deemed "essential" may be required to work during a government shutdown without pay. Individuals not expected to work will also not receive pay. All federal employees will receive backpay once the shutdown is complete.

Luckily, Americans do not need to worry about the consequences of a government shutdown for the next 40-plus days. But due to the large partisan divide in Washington D.C., the talk of another shutdown is likely to occur.