How the 2025 Federal Government Shutdown Impacts U.S. Healthcare Programs

As of October 2025, the United States is experiencing a major federal government shutdown. This event has affected several key areas of healthcare, from hospital reimbursements and school funding to patient access and telehealth services. Programs like Medicare, Medicaid, and TRICARE are still running, but many healthcare providers are feeling the pressure. Payments are taking longer, paperwork is piling up, and uncertainty around funding is making it harder to plan and operate smoothly.

Let’s break down what’s happening, who’s affected, and where things still run normally.

How Does the Federal Shutdown Affect Health Insurance

If your patients are covered under federal health insurance programs, their coverage remains secure. The real issue isn’t loss of insurance — it’s the slowdown behind the scenes. Providers should prepare for delays in claim processing and limited communication from federal agencies.

Patients can still visit hospitals, get urgent care, and fill their prescriptions. However, processes that depend on administrative approvals — such as enrollment checks or referral authorizations — may take longer than usual. For a clear breakdown of these processes and potential impacts, see our detailed guide.

Key points for providers

• Expect slower claim processing for Medicare, Medicaid, and TRICARE.

• Routine hospital reimbursements may be delayed by roughly 10 days.

• New or special health programs could be temporarily paused until Congress restores funding.

• Keep billing records updated and let patients know about possible delays to maintain trust and transparency.

How the Shutdown Affects Medicare and Medicaid Programs

Right now, both Medicare and Medicaid are mostly shielded from the shutdown. These programs are entitlement-funded, which means they don’t rely on yearly budget votes from Congress. Because of that, most patients and providers won’t see major disruptions in coverage or care.

• Coverage stays active for hospital, outpatient, pharmacy, and preventive care.

• Patients can still visit hospitals, clinics, and pharmacies without issues.

• State Medicaid offices continue to handle renewals and claims as usual.

What’s changing in Medicare and Medicaid during the Shutdown

Even though coverage remains secure, the shutdown is slowing down administrative work that happens in the background.

Essential Functions Continue

Hospitals, pharmacies, and outpatient centers are still open. Claims systems are running, so care itself isn’t interrupted.

Delays in Claims and Approvals

The Centers for Medicare & Medicaid Services (CMS) has asked contractors to place a short 10-day hold on new claims. This means providers may face temporary cash flow issues until payments resume.

Telehealth and Special Programs

Some pandemic-era waivers — such as telehealth flexibility and hospital-at-home programs — expired on September 30, 2025, and haven’t been renewed yet. This limits telehealth reimbursement for certain non-mental-health services.

Impact on School-Based Medicaid Programs

Many public schools rely on Medicaid funding to support speech therapy, behavioral health, and nursing services. That funding hasn’t been cut, but schools may experience slow reimbursements if federal grant staff remain furloughed.

• Districts offering Medicaid services could see short-term payment delays.

• Special education programs may feel financial pressure.

• Low-income support programs that rely on prompt Medicaid payments might face cash-flow challenges.

These effects are especially concerning for rural school systems or states with tight budgets and limited reserves. Explore how ABA providers can stay financially resilient during these delays.

Medicare and Medicaid: Current Status During the Shutdown

Area	Status / Impact	Explanation
Core Coverage	✅ Unaffected	Funded through entitlement mechanisms, remains active.
Medicaid State Operations	✅ Funded (for now)	States use advance funding through early 2026.
Eligibility Renewals	✅ Continuing	CMS authorizes state agencies to renew and process applications.
Claims Processing Speed	⚠️Slower	Short hold on claims (~10 days) implemented by CMS.
New Coverage Approvals	⚠️Possible Delays	Complex authorizations may take longer due to reduced staffing.
Provider Payments	⚠️Delayed for Non-Urgent Claims	Non-emergency claims may see delayed reimbursement.
Telehealth & Add-On Programs	⚠️Some Lapsed	Waivers for telehealth and hospital-at-home expired on Sept 30.
CMS Oversight & Audits	⚠️Reduced	Non-critical compliance monitoring is paused.

Even though medical care is still being provided, the slowdown in federal administrative work is causing temporary delays and inefficiencies across the system.

TRICARE: The Most Affected Health Program During the Shutdown

While most federal health programs like Medicare and Medicaid continue to run smoothly, TRICARE the health insurance program for active-duty service members, veterans, and their families, is feeling the pressure of the federal government shutdown more directly.

The good news is that coverage remains active — meaning beneficiaries can still visit doctors, go to hospitals, and receive emergency care. The concern lies in the payment process, which has slowed significantly. Claims for services provided after October 1, 2025, are being held until Congress passes a new budget. This delay doesn’t cancel payments but puts them temporarily on pause.

Here’s what’s happening in practice

• Coverage: All TRICARE plans continue to be valid. Members can still access urgent care, hospital treatments, and prescriptions. For official updates during the shutdown, visit the TRICARE shutdown page.

• Claims Processing: Claims for medical services after October 1 may not be paid immediately. This can cause delays for providers who depend on regular reimbursements to keep their operations running.

• Provider Impact: Because of uncertainty about when funds will resume, some private and community-based healthcare providers may decide not to take on new TRICARE patients until payments are back on track.

• Out-of-Pocket Costs: Patients won’t see any change in their copays, deductibles, or coinsurance rates. Their personal costs remain the same.

The result is a temporary financial squeeze for clinics and hospitals that serve military families. They’re still caring for patients but waiting longer to get paid, which can affect their cash flow and operational stability.

What Are Exceptions in TRICARE

It’s important to know that the government shutdown doesn’t change what TRICARE covers or doesn’t cover. The list of services TRICARE does not pay for stays the same. Nothing new has been removed or added. Doctors and clinics should still remind patients about these rules. This helps everyone understand what is covered and prevents confusion or surprise bills later.

Common Services Not Covered by TRICARE

• Acupuncture, chiropractic, or other alternative treatments

• Long-term or custodial care (for ongoing daily assistance)

• Cosmetic surgery, unless medically required (for example, after an injury)

• Homeopathic or herbal supplements that lack FDA approval

• Routine dental and vision care, except for a few specific groups

• Learning disorder therapy or elective (non-medical) services

These exclusions are standard policy, not a result of the shutdown.

In short, TRICARE continues to ensure that military families receive care, but payments, approvals, and reimbursements are temporarily slower. Providers should plan for short-term disruptions, maintain clear communication with TRICARE representatives, and reassure patients that their coverage and access to care remain intact despite the ongoing funding pause.

TRICARE Aspect Table

TRICARE Aspect	During Shutdown	Usual Exclusions
Coverage	Remains active for all enrolled beneficiaries​	N/A
Claims Processing	May be delayed for care after Oct 1, 2025​	N/A
Out-of-Pocket Costs	No change; usual copays and deductibles​	N/A
Access to Care	Appointments and prescriptions continue​	N/A
Examples of Exclusions	Acupuncture, cosmetic drugs, long-term care, etc.​	See below

How Providers Can Manage During the 2025 Shutdown

To keep things running smoothly while the shutdown continues, providers can take a few practical steps:

• Keep sending in claims as you normally do. They’ll be processed once the payment hold is lifted.

• Plan for slower payments by adjusting your cash flow and budgeting for short delays.

• Talk with patients early so they understand there might be minor delays with claims or copay processing.

• Use online portals to check claim status and share updates with patients or billing teams.

• Follow official updates from CMS, TRICARE, and state Medicaid offices to stay current on any new instructions.

By staying organized and communicating clearly, healthcare providers can continue offering care without major disruption, even while the administrative side takes time to catch up.

FAQ

1. How does the federal government shutdown impact healthcare?

The shutdown slows healthcare operations. Payments, approvals, and claims take longer, but essential services like hospitals, pharmacies, and emergency care continue without interruption.

2. What happens to healthcare if the government shuts down?

Most healthcare programs stay open. Medicare, Medicaid, and TRICARE still provide care, but processing, reimbursements, and new approvals face temporary delays.

3.Who doesn't get paid if the US government shuts down?

Federal employees and contractors in non-essential roles may miss paychecks. Some healthcare providers also face delays in reimbursements until government funding resumes.

Conclusion

The 2025 federal government shutdown hasn’t stopped healthcare in America, but it has made things move more slowly. Medicare and Medicaid are still running normally, yet many providers are seeing delayed payments and fewer updates from federal offices. TRICARE providers are facing the biggest challenge, since reimbursements are on hold, though patients can still get care when they need it.

For healthcare providers, the best approach is to stay prepared and communicate clearly. Keep patients informed, plan for short-term payment delays, and check official updates often. Once the government fully reopens, the healthcare system will quickly get back to its regular pace. For providers looking for strategies to manage financial impacts, explore more here and stay informed about Medicaid updates for autism care.