Policy-ish

Brief Federal Shutdown Wouldn't Faze Medicare Or Medicaid

If the current budget standoff on Capitol Hill leads to a shutdown of the federal government on Friday, recipients of the Medicare and Medicaid health programs won't have to worry. At least not for a while.

Shutdown flashback: Department of Health and Human Services employees leave their building in Washington after being told to go home as part of a federal shutdown in 1995.

hide captionShutdown flashback: Department of Health and Human Services employees leave their building in Washington after being told to go home as part of a federal shutdown in 1995.

Greg Gibson/AP

That's the official word from the Office of Management and Budget, where officials have been rushing to plan for what will and won't remain operating in the federal government in case Congress fails to pass a spending bill by the end of the week.

The general rule, explained senior-but-unnamed OMB officials in a conference call with reporters this morning, is that two types of activities may continue when there is no annual spending authority granted by Congress. First, those needed for "safety of life or protection of property." Second, those with other funding sources (meaning they are funded on a multiyear basis; they are funded by user fees, or they have permanent appropriations).

Medicare and Medicaid, being entititlement programs aren't funded by the annual appropriations process (which is what Congress is currently fighting over), fall into the category of having other funding sources.

So they would continue operating largely as usual in the event most of the rest of the government shuts down. Patients could still get care. And the folks who provide it (doctors, hospitals, nursing homes, etc.) could submit bills and get paid.

But not indefinitely. That's because while the funds for the programs are not provided through annual appropriations, the salaries for the government workers (as well as the funding for the private insurance companies that process most of Medicare's claims) are.

The general understanding, according to OMB and the Congressional Research Service, is that workers may be deemed essential and kept on to keep non-appropriated programs running (although those workers would likely not get paid until funding is restored after the government is reopened), but things like new enrollments into the programs would not be processed.

Similarly, OMB officials said, no new patients would be admitted to the National Institutes of Health's clinical center, although patients already there would continue to be cared for. And no new research grants would be processed, although existing research would be allowed to continue.

For a rundown of the effects a shutdown could have, see this post by our pal Liz Halloran for NPR's Two-Way blog.

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