On November 12, 2025, President Donald Trump signed legislation ending the partial government shutdown that had been in effect since October 1, 2025. The package includes full-year spending bills for the Department of Agriculture and the Food and Drug Administration, the legislative branch, Department of Defense construction projects, and the Department of Veterans Affairs. The legislation also includes a short-term continuing resolution to fund the other governmental departments not included in the full-year spending bills through January 30, 2026.
Key healthcare issues under discussion during the shutdown included the Affordable Care Act (ACA) enhanced exchange subsidies and the extension of several other programs that benefit healthcare providers. Below, we provide an overview of how the legislation to reopen the federal government addresses these issues and how it may impact healthcare organizations.
ACA Enhanced Health Insurance Exchange Subsidies
The legislation does not include an extension of the enhanced health insurance exchange premium tax credits that are scheduled to expire on December 31, 2025. However, in exchange for voting to advance the measure, Senate Majority Leader John Thune has committed to holding a vote on extending the tax credits in the coming weeks.
A study from the Urban Institute estimates1 that the expiration of the enhanced exchange subsidies would increase uncompensated care nationwide by $7.7 billion (12% relative to the $66.7 billion baseline). The burden of the additional uncompensated care would fall on all provider types; about $2.2 billion on hospitals, $1 billion on physician offices, $3.1 billion on other services, and $1.5 billion on prescription drugs.
The increase in uncompensated care would be greater in non-expansion states. For example, the Urban Institute study projects increases of 29.1% ($251 million) in Mississippi, 26.9% ($265 million) in South Carolina, and 29.2% ($378 million) in Tennessee. In contrast, uncompensated care demand would increase by 5% or less in 15 states, and by less than 1% in Connecticut, the District of Columbia, Hawaii, Minnesota, and Vermont.
As the likelihood of an extension of the enhanced ACA subsidies decreases, providers will want to focus on improving processes to connect patients with other sources of coverage, improve upfront patient liability collections for non-emergent services, and consider re-evaluating financial assistance policies and processes. We explored many of these revenue cycle improvement strategies in the third installment of our OBBBA Tuesdays series.
Other Healthcare Policy Extenders
While the legislation doesn’t extend the enhanced health insurance exchange tax credits, it does include language that extends several other key healthcare policies through January 30, 2026. These include, but are not limited to:
- Medicaid Disproportionate Share Hospital (DSH) Cuts: The legislation delays the $8 billion reduction to federal fiscal year (FY) 2026 state Medicaid disproportionate share hospital (DSH) allotments related to the ACA through January 30, 2026. The remaining DSH cuts would be in effect for a period from FY 2026 through FY 2028. This section of the legislation also funds Tennessee’s DSH program through January 30, 2026.
- Medicare Dependent Hospital (MDH) Program: The legislation extends the MDH program through January 30, 2026.
- Medicare Low Volume Adjustment (LVA) Program: The legislation extends the LVA program through January 30, 2026.
- Medicare Telehealth “Flexibilities”: The legislation extends the geographic and originating site restriction waivers, along with other COVID-era telehealth flexibilities provided in the Consolidated Appropriations Act of 2023, through January 30, 2026.
- Medicare Hospital at Home: The legislation extends the Center for Medicare and Medicaid Innovation’s Acute Hospital at Home program through January 30, 2026.
- Work Geographic Index Floor: The legislation extends the 1.0 work geographic practice cost index (GPCI) floor used in the calculation of payments under the Medicare Physician Fee Schedule through January 30, 2026.
- Community Health Center (CHC) Funding: The legislation provides $1.4 billion in funding for the Community Health Center Fund (CHCF) from October 1, 2025 through January 30, 2026. The CHCF accounts for over 70% of CHC funding.2
- Add-On Payments for Ambulance Services: The legislation extends Medicare ground ambulance add-on payments through January 30, 2026.
The cost of extending these policies is offset by a one-month extension of the 2% Medicare sequester and a $400 million reduction in the Medicare improvement fund.
Statutory Pay-As-You-Go (S-PAYGO) Medicare Sequester
In addition to providing short-term extensions of certain health policies, the legislation “wipes clean” the S-PAYGO scorecard. This eliminates the risk of a 4% sequester3 that could have been applied to all Medicare payments in 2026 due to the One Big Beautiful Bill Act.
How Forvis Mazars Can Help
Our healthcare professionals at Forvis Mazars are committed to helping healthcare organizations understand and adapt to the impact of evolving federal policies. If you have questions about policy changes and how they may affect your organization, please reach out to a professional on our team. You can also follow our “Achieving Health” podcast for biweekly updates on the latest from Washington, D.C.
- 1“Changes in Healthcare Spending and Uncompensated Care Under Enhanced Tax Credit Expiration for Marketplace Coverage,” urban.org, September 2025.
- 2“Federal Health Center Funding 101: Infographic,” nachc.org, September 20, 2023.
- 3“Statutory PAYGO & Budget Reconciliation Legislation,” everycrsreport.com, June 12, 2025.