How Will a Shutdown Affect Health Care

Congress returned from the August recess on September 12, with three weeks to fund the Federal Government before the fiscal year ends. The Government will shut down if Congress (including the House of Representatives and the Senate) doesn’t pass the necessary legislation in time for President Biden to sign it before the end of the day on Saturday the 30th.

There are 12 different appropriation bills required to avoid a shutdown; the easiest of those (funding the military) failed to progress to a floor vote in the House last Wednesday due to opposition from the conservative Freedom Caucus. (Go here to learn more about the Freedom Caucus.)

As I write, not a single bill has passed, and a proposed stopgap bill appears to be DOA. Even if the necessary legislation passes in the House, Senate Republicans announced two weeks ago they aren’t likely to accept any compromise bill that makes it through the Republican-controlled House of Representatives.

It is more than likely the Federal Government is about to shut down (one financial policy strategist placed the chance “at least 60%” last Friday).

With nine days remaining (assuming Congress stays at work 24/7), what are the implications for health care? How will all of us lose benefits and protections with Federal agencies shuttered? Who will be hurt the most if the government shuts down?

To predict our possible future, we should remember our past.

The longest shutdown in US history was 35 days (December 22, 2018 – January 25, 2019). In Fontenotes Number 70, 8 days before the crisis ended, I reviewed 12 ways health care and, most importantly, people were struggling.

Here is the view from the last time Congress flirted with funding.

Twelve Ways the Shutdown is Affecting Heath Care

[originally published January 17, 2018]

1. Some Federal Workers are Losing their Health Benefits

The 800,000 employees at shut down Federal Agencies who fall under the Federal Employees Health Benefits (FEHB) program are not at risk of losing their health care insurance- but they could start to receive bills for their dental, vision and long-term care coverage if the crisis continues.

The Federal Employees most in jeopardy are those working under contracts not eligible for the FEHB program. Not only are contract workers potentially not going to get paid when the shutdown ends, they lost their health care benefits at midnight on December 22nd. A poignant story highlighted by NBC News and the New York Post covers a young woman from the Interior Department now rationing her insulin because she cannot afford the cost.

2. Many Native Americans are Going without Health Services

The Indian Health Service- run by HHS but funded through the Department of the Interior- is directly affected by the shutdown. Native American tribes have already missed millions of dollars in essential services; only health care that meets the “immediate needs of the patients, medical staff, and medical facilities” are included in the Department shutdown plan. [quoteSome clinics serving Native Americans have already closed, others are expected to cease services by the end of this week.

Speaking to Democratic members on the House Committee on Natural Resources, [Aaron Payment, chairman of the Sault Ste. Marie Tribe and board member of the National Congress of American Indians] and others outlined the many ways already vulnerable populations are hurt by the shutdown. An Indian Health Service (IHS) contractor, Native American Lifelines of Baltimore and Boston, can’t afford to pay for its patients’ insulin, antibiotics, blood pressure and thyroid medications; food deliveries through the National Association of Food Distribution Programs on Indian Reservations Board have been stalled; and thousands of Bureau of Indian Affairs and IHS empare furloughed and working without pay. [quote]

3. Some People Eligible for Obamacare Subsidies May Have Their Applications Delayed

Many people (if not most) who purchase insurance on the Obamacare Exchanges (or “Marketplaces”) receive a subsidy from the government to help them afford health care coverage. Applications for subsidies may require a review by the IRS in some circumstances, such as when the applicant lost their job, or a baby has been born, the person involved filed for an extension on their taxes, or they signed up for insurance outside of the open enrollment window.

With 90% of IRS workers out of the office, these applications are now delayed– and the patients involved could lose their insurance entirely if they can’t pay the full premium while they are waiting (as a bonus the IRS Call Center is closed so these people can’t get information on what they should do). Democratic Senators and Representatives sent a letter Monday to HHS and Treasury asking for protection from unexpected premium costs due to the shutdown.

4. People Who Receive SNAP Benefits (Food Stamps) Have Another Month of Coverage

The United States Department of Agriculture, Food and Nutrition Service (FNS) released funds to each state to provide February Supplemental Nutrition Assistance Program (SNAP) benefits two days before the shutdown. What this means is people who receive SNAP (food stamps) must ration their benefits to last two months; it is unclear if there will be any further assistance if the shutdown continues into March.

People who were in the process of applying for food stamps when the shutdown began on January 22nd may have to go without until the reopening of the government. Although the SNAP program is administered through the states, “FNS does not guarantee eligible applicants will receive food stamp benefits while the partial federal shutdown is in effect.” [quote]

5. Food Safety Issues May Affect Public Health

Food safety is a basic component of public health- and now threatened by the interruption of routine food safety inspections. However, the day after FDA Commissioner Scott Gottlieb confirmed the cessation of food control efforts the FDA announced that “high-risk” inspections, including infant formula, shellfish, and prepared salads and sandwiches, will resume with the return of 150 furloughed (but still unpaid) people next week.

6. Industry Developments are Affected by Government Regulators Lack of Funding

The Antitrust Division of the Justice Department asked the U.S. D.C. District Court last week to suspend review of the $70 billion CVS-Aetna merger due to lack of resources. The Judge told them to keep working.

This “Mega-Merger” is a highly publicized case- and the judge’s opinion presumably reflects that. Undoubtedly there are lesser-known business dealings and corporate plans that are not able to come to fruition while the necessary federal agencies are unavailable to serve their role.

7. The Safety of Drinking Water is Threatened

After what happened in Flint water safety is top-of-mind for all health care providers, but with more than 13,000 workers furloughed, the Environmental Protection Agency (EPA) does not have enough staffing to inspect drinking water adequately.

8. State 1332 Waivers for Innovations in Marketplaces are on Hold

IRS evaluation of the financial impact of proposed innovations is a central component in a state’s process to obtain a 1332 waiver, but because the IRS is currently crippled (see above) that agency can’t work with HHS to evaluate state initiatives to revamp their Obamacare marketplaces, a chief focus of conservative efforts to alter the ACA.

9. The Appeal of the Texas Decision Striking Down the ACA is on Pause

The Federal Court system has survived the shutdown by conserving resources as best as possible (although a closure could happen as early as next week), but the shutdown has still impacted the most prominent court case in health care today: the Texas lawsuit decided in December declaring the entire ACA invalid. On January 11th the Fifth Circuit Federal Appeals Court issued a stay in the appeal of that decision until the government reopens.

10. The FDA is Open- but New Drug Treatments may be Delayed

The FDA, as a branch of HHS, is up and running, but even so, some pending new drug treatments (including those for Multiple Sclerosis, depression, and Diabetes) may be delayed if the shutdown continues, as the agency cannot process the application fees paid by drug manufacturers during the shutdown. Funds available at FDA are expected to be exhausted before March. 

11. It Is Increasingly Difficult to Hire Researchers at the FDA

In 2016 the passage of the 21st Century Cures Law (Pub. L. 114-255) was “designed to help accelerate medical product development and bring new innovations and advances to patients who need them faster and more efficiently.” [quote] Part of that directive was to accelerate hiring scientists (and increase their pay) at the FDA. However, as recently reported by Bloombergthe shutdown is making it difficult to entice the best minds away from the private market- to enforce the argument that the government is “a good place to work.”

12. Activities of Homeland Security Related to Health are at Peril

The division of Homeland Security that monitors threats related to infectious diseases, pandemics and biological and chemical attacks (the Office of Health Affairs) is scaled back throughout the shutdown; of the 204 people who typically address these threats as well as others in the Countering Weapons of Mass Destruction Office, only 65 remain active.
Other Homeland Security employees that will continue to work without pay include border health inspectors and members of the border patrol.

In Closing

This shutdown is a world of pain for all of us- but for many, it is an actual threat to life (such as living without insulin).

2019 will be a year of political battles over the future of the American Health Care System on both a Federal and State level. The Trump Administration will (presumably) continue to erode protections provided in the Affordable Care Act [ACA or “Obamacare], and the December case ruling the entire ACA unconstitutional will continue to wind its way toward a newly constituted conservative U.S. Supreme Court. The Ying and Yang of “Medicare For All” and “Free Market Health Care” will be the debate of the year. All of that, and much more, will be the subject of future Fontenotes.

But until our government fully reopens- those debates all seem irrelevant- if not irreverent.

Want to Know More?

1. Because of rules in place regarding government funding, the Office of Management and Budget [OMB] is required to “slice around $839 million from nonexempt programs across the government… About 90 percent of the cuts, or $753 million, would come from Medicare.” [quote] The Trump Administration will not order those cuts right away- as explained in this excellent article from Roll Call that gets into sequestration, finance and government spending- but ends with this sentence: “it’s likely to come as a surprise to hospitals, doctors and other stakeholders who would see their Medicare reimbursements cut as part of an unrelated fight over funding a wall along the southwest border.” I thought that might get your attention… 

2. The Indian Health Service [IHS], based in Rockville Maryland, was founded in 1955, and has as its mission “to raise the physical, mental, social, and spiritual health of American Indians and Alaska Natives to the highest level.” If that is more than you have ever known about IHS you are not alone- this shutdown will hopefully bring more attention to this agency, the populations it serves, and the significant health issues facing those on our soil who are not immigrants.

Here are links to find out more about health disparities, critical health issues from AARPdemographic information from the HHS Office of Minority Health, and a study through NIH addressing poverty and health issues for American Indian and Alaskan Native Children. I am fully aware I do not have any credentials in this important arena- these are random selections from my search of the web. I encourage any reader to contact me who has a better understanding of- and association with- Native American and Alaskan Native health issues. A guest Fontenotes would be my highest hope