As of October 1, the federal government has entered a shutdown. A key point of contention centers around a dispute in Congress over whether to extend temporary COVID-era subsidies for the Affordable Care Act (ACA), which are scheduled to expire at the end of the year.
For Federally Qualified Health Centers (FQHCs), this shutdown introduces notable operational challenges related to both ACA Marketplace coverage and federal funding. Understanding the specific impacts of these changes can help guide decision-making and planning.
The shutdown affects FQHCs and the communities they serve primarily in two areas: changes to Marketplace subsidy levels and a freeze on federal grant payments.
Temporary enhanced ACA subsidies provided during the COVID-19 pandemic remain scheduled to expire on December 31, 2025. If these subsidies are not extended, individuals enrolled in ACA Marketplace plans will revert to the pre-2021 subsidy structure. This will lead to an increase in monthly premiums for benchmark silver plans. The pre-2021 structure had previously supported successful Marketplace enrollment.
While these changes will affect household premiums, the federal shutdown has separate and immediate financial consequences for FQHCs.
The Community Health Center Fund, which provides $5.6 billion annually and comprises about 70% of federal grant support for FQHCs, expired on September 30. As a result of the shutdown and budget impasse, new federal grant payments are currently frozen. This freeze directly impacts the cash flow of FQHCs and may affect programs and services that depend on this discretionary funding.
Unlike grant funding, Medicaid operates as an entitlement program. During a federal shutdown, Medicaid funding continues regardless of the appropriations process, though some payment delays may occur. Medicaid is not subject to annual appropriations in the same way as discretionary grant programs.
For FQHCs, this means Medicaid remains a consistent and stable source of revenue even during federal funding disruptions.
At PointCare, we remain steadfast in our mission. We will continue to make sure your members are covered and you are able to deliver uninterrupted care; building the revenue stability that makes the system work as it was designed to. This approach can help reduce financial volatility during periods when discretionary federal funding is unavailable.
Looking for more actionable insights? Read our 7 Strategies Guide. It’s packed with proven methods to prepare your clinic for the unknown and protect revenue while improving patient care.