Healthcare resources at stake as government shutdown looms: 4 things to know
With a government shutdown looming at the end of September, hospital executives face a familiar but urgent question: What will happen to critical healthcare programs if Congress fails to act?
As lawmakers return to Washington, D.C., from summer recess, the path to a funding agreement remains uncertain and is clouded by partisan standoffs over Medicaid cuts, provider reimbursements and the future of telehealth.
“If Republicans want Democrats to provide votes to fund the Trump administration, they can start by restoring the health care that they ripped away to finance more tax handouts for billionaires,” Sen. Elizabeth Warren said in an Aug. 28 post on X. ”This fight is about saving health care and lowering costs for millions of Americans.”
As Congress returns on Sept. 2, 2025, with a Sept. 30 funding deadline fast approaching, several critical healthcare provisions hang in the balance.
Here are four key issues to watch in the coming weeks as lawmakers work to avoid a government shutdown:
1. Telehealth
Pandemic-era telehealth waivers are set to expire Sept. 30, jeopardizing continued access to virtual care for millions of Medicare beneficiaries, particularly those in rural or underserved areas. These waivers expanded provider eligibility, covered more services and allowed patients to connect with clinicians from home, sparking a rapid acceleration in telehealth adoption.
In anticipation of the deadline, several healthcare organizations — including 48 health systems — wrote a letter to Congress urging an extension. “While we strongly support making Medicare telehealth access permanent, if that’s not achievable at this time, we urge Congress to approve the longest possible extension,” the organizations wrote in an Aug. 11 letter. “At a minimum, a two-year extension is needed to ensure stability and provide clarity for patients, providers and the healthcare system as a whole.”
2. Medicaid DSH cuts
Medicaid Disproportionate Share Hospital payments provide crucial financial support to hospitals that care for the nation’s most vulnerable populations — including children, low-income families, people with disabilities and the elderly. Without congressional action, $8 billion in scheduled cuts will take effect Oct. 1, 2025.
These cuts would disproportionately affect rural and safety-net hospitals, many of which already operate on thin margins and rely on DSH funds to offset uncompensated care. Executives warn the loss could force service reductions, staff cuts or closures, particularly in areas with limited access to care.
The American Hospital Association is urging Congress to provide relief from the cuts, citing the program’s vital role in supporting care for underserved communities.
3. Democrats’ push to reverse Medicaid cuts
A centerpiece of the looming funding battle is Democrats’ push to roll back sweeping Medicaid cuts enacted in July under the One Big Beautiful Bill Act, signed into law by President Donald Trump. The legislation, pitched as a tool to fight fraud and increase efficiency, imposes work requirements, accelerates redeterminations and establishes new limits on state-directed Medicaid managed care payments. It also begins phasing out provider tax incentives and ACA premium tax credit eligibility. The Congressional Budget Office estimates that 11.8 million people could lose Medicaid coverage as a result.
The law has sent hospital and health system leaders into rapid strategic planning. Renton, Wash.-based Providence, a 51-hospital system, projects an up to $500 million annual impact. President and CEO Erik Wexler called the legislation a “significant threat” to community health and a contributor to a “polycrisis” that already includes staffing shortages, tariffs, inflation, and payment denials.
4. Renewal of ACA subsidies
Enhanced ACA premium tax credits are set to expire at the end of 2025, threatening coverage for millions and placing added strain on hospitals nationwide. As of February 2025, nearly 23.4 million people were enrolled in ACA plans — 93% of whom receive enhanced subsidies, according to CMS.
“This isn’t just a policy change that’s going to impact a subset of individuals. It’s going to impact all of us,” Jacquelyn Bombard, associate vice president and chief federal affairs officer of Providence, told Becker’s. “We all have a stake in this because it’s going to upend the health system.”
Combined with Medicaid coverage losses under H.R. 1, as much as 40% of the population in some states could lose access to insurance, according to Ms. Bombard. Providence, where 70% of patients are covered by Medicare or Medicaid, expects higher emergency department volumes, increased uncompensated care and more burnout among already-strained clinical staff.
“It will lead to delays and longer wait times, especially in our emergency departments,” she said. “We have a workforce shortage, especially in rural areas.”
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