What Does The Potential Government Shutdown Mean For Doctors?

If you haven’t heard what’s going on in Washington, you must not have had the TV on in the OR lounge. I just returned from Washington and the mood is somber in the congressional offices as everyone prepares for what appears to be an imminent shutdown due to an impasse over the budget.

We are facing two self-inflicted crises this month. Without a bill authorizing federal spending, the federal government will shut down tomorrow. The money is there but there is no law to direct the funding. Around October 17, the government will have maxed out its borrowing limit and no more money will be available, regardless of any budget resolution that might pass in the interim.

The disagreement is regarding funding for the Affordable Care Act (ACA) or “Obamacare.” The Republicans controlling the House of Representatives want to do anything they can to stop the implementation of the ACA (i.e. strip any funding or delay its implementation). Democrats, who control the Senate, say that defunding the ACA is a non-starter.

October 1 – The Government Shutdown

First, let us put things into perspective. The October 1 budget agreement is only a continuing resolution to fund the government for two months. Any agreement that the government reaches now would only be a short-term solution to “kick the can” to December.

Second, there is irony in trying to defund the ACA in a temporary budget proposal. During a government shutdown, the ACA would continue to be implemented because its funding does not depend on the federal budget process.

As this blog was written, the Senate stripped the ACA defunding provision and sent the continuing resolution back to the House. If the government does not reach an agreement by October 1, how will the potential shutdown affect us?

• Non-critical federal employees (around 800,000 workers) will be on furlough.

• Normally, the armed services would not be paid during a shutdown but they would be expected to work and be paid retroactively after a continuing resolution passes. However, the House passed a bill Saturday to avoid this so service people will be paid even if the government shuts down. The Senate will consider the bill today.

• Small business loans or federally guaranteed home loans would not be processed.

• Medicare and Medicaid would continue to make payments to doctors and hospitals.

• Some Veterans Affairs (VA) services (like burial arrangements and disability claims) would halt, but healthcare for veterans would continue.

October 17 – The Debt Ceiling

The United States has never defaulted on its debt. We came to the brink in 2011, which resulted in the Budget Control Act of 2011 that set up sequestration. The near default caused Standard & Poor's (S&P) to downgrade the U.S. credit rating from AAA to AA+.

One common misconception is that the debt ceiling dictates federal spending. In reality, Congress already approved the spending. The debt ceiling would need to increase to cover the spending that Congress already decided upon since there is a budget deficit. If the debt ceiling does not rise to pay for the spending by October 17, the government will default on some of its debt. Since this has never happened before, it is difficult to predict the effects. However, since there wouldn’t be any money, the following is likely to happen.

• Medicare payments to doctors and hospitals would stop.
• Military pay and VA benefits would be interrupted.
• People could not cash Social Security checks.
• The U.S. credit score would be damaged and borrowing interest rates would increase.
• No federal money would be available for research grants or loans, like Stafford student loans.

Overall, the government shutdown is almost certain to occur but unlikely to have a major impact on the practice of medicine unless it continues on for more than a couple weeks. However, if the U.S. defaults, it will have significant impact on every American, including those in healthcare. Both circumstances are irresponsible. If we breach the debt limit, the essential versus non-essential designation of government services will not matter. There will be no money to pay for either and this will certainly impact the economy negatively.