Health Care Matters | October 10
Shutdown Stalemate Disrupts Health Programs and Coverage Planning
As the government shutdown continues into its second week, several health care programs are experiencing disruption or growing uncertainty. The expiration of key Medicare flexibilities has paused coverage for telehealth services under Traditional Medicare and ended the Acute Hospital Care at Home waiver program. Providers are being advised to have Traditional Medicare patients sign Advance Beneficiary Notices (ABNs) and to hold telehealth claims until Congress reinstates payment, which is widely expected once the shutdown ends. While MA plans continue to cover telehealth, it remains unclear whether diagnoses collected through MA telehealth visits will count toward risk adjustment, creating uncertainty for plans and providers. The expiration of Hospital at Home authority has also led hospitals to discharge or readmit patients, straining inpatient capacity and limiting access to an alternative model shown to reduce costs and improve outcomes.
At the same time, congressional inaction on the Affordable Care Act (ACA) premium tax credits (PTCs) is beginning to lock in higher costs for consumers. Although reductions to the enhanced PTCs do not take effect until 2026, insurers have already finalized next year’s rates assuming the credits will expire, resulting in roughly 5 percent higher premiums. This dynamic will make coverage less affordable during open enrollment, particularly for middle-income and older adults, and could lead to significant coverage losses as consumers receive notices of higher out-of-pocket costs in the coming weeks. Read more here and here.
Why It Matters
The government shutdown and congressional inaction on ACA premium tax credits are creating cascading disruptions across the health care system. The lapse in Medicare telehealth and Hospital at Home flexibilities is forcing immediate care delivery changes, disrupting established patient relationships, straining hospital capacity, and creating access barriers particularly for rural and mobility-limited beneficiaries. Meanwhile, providers face administrative burdens and cash flow uncertainty as they hold claims and navigate complex billing requirements.
The stalled extension of enhanced ACA premium tax credits presents an even more urgent crisis with irreversible consequences. Because insurers finalized 2026 rates in October assuming the credits would expire, roughly 5 percent higher premiums are now locked in. More critically, consumers receiving re-enrollment notices in the coming weeks will face doubled net premiums, prompting many to forgo or cancel coverage in ways that cannot be fully reversed even if subsidies are later restored. The Congressional Budget Office estimates that delays through year-end will result in 1.5 million additional coverage losses, with severe impacts on middle-income and older adults. These parallel disruptions affect not just individual consumers but hospitals managing uncompensated care, employers offering coverage, and state programs managing marketplaces, illustrating how policy uncertainty creates compounding harms when political gridlock delays action beyond critical operational deadlines.
Medicare Advantage Faces Shifting Landscape Ahead of 2026
As Medicare open enrollment begins, CMS and industry leaders are painting differing pictures of what lies ahead for Medicare Advantage (MA) in 2026. CMS projects a 3% decline in MA enrollment and a 15% drop in average monthly premiums to $14, describing the overall market as stable. However, national trends mask sharp state-level variations, with some insurers expanding while others exit entirely. UnitedHealthcare and Humana, the two largest MA carriers, will leave several unprofitable markets, affecting more than one million members combined. In some states, such as Vermont, plan options will be reduced to just a few counties following major insurer departures. Read more here and here.
Why It Matters
While Medicare Advantage plan changes occur annually, 2026 represents an unusual inflection point. For the first time in roughly two decades, total MA enrollment is projected to decline year-over-year, and MA will no longer cover more than half of all Medicare enrollees. The scale of carrier exits is also exceptional with the three largest MA insurers simultaneously retrenching from hundreds of counties, driven by two years of shrinking profits. The market turbulence creates both challenges and opportunities: while smaller regional carriers have openings to capture market share in areas abandoned by national payers, seniors face confusion navigating plan changes, with many finding shopping for plans confusing or planning to reenroll without reviewing their options. Behind seemingly stable premium averages, insurers are raising costs through higher deductibles and out-of-pocket maximums, cutting allowances for over-the-counter health items, and prioritizing HMO designs with more limited provider networks. For health care providers and organizations, these shifts mean potential disruptions to patient panels, the need to renegotiate contracts with new or expanding carriers, and increased pressure to help patients understand their changing coverage options during a critical enrollment period.
Medicare’s Skin Substitute Spending Surge Prompts Policy Action
Medicare spending on skin substitutes (i.e., artificial or biological materials used to cover large skin wounds) has surged from $250 million in 2019 to more than $10 billion in 2024, driven by a per-unit payment structure that incentives providers to choose the priciest skin substitutes for patients. Accountable Care Organizations (ACOs) were among the first to identify the problem, raising concerns with CMS after seeing widespread overuse and patient harm. Their actions illustrate how value-based care models can help detect and prevent waste, fraud, and abuse. In response, CMS has proposed a 2026 policy change that would pay a flat rate for skin substitutes, removing financial incentives for overuse and bringing payments more in line with product value. Read more about skin substitutes here.
Why It Matters
For ACOs and organizations advancing value-based care, this issue highlights the importance of a strong data analytics system and accountability in protecting both patients and the Medicare Trust Fund. By monitoring care patterns and advocating for system-wide fixes, ACOs are showing how payment reform can align incentives with quality and efficiency. As CMS finalizes its new policy, ensuring ACOs aren’t financially penalized for fraudulent activity beyond their control will be essential to maintaining fairness and supporting the continued success of value-based care.
Look for the Helpers: Grant Expands Access to Mental Health Care in Mid-Michigan
Family & Children’s Services of Mid-Michigan is expanding access to affordable mental health care thanks to a new grant from the Rollin M. Gerstacker Foundation. The funding will support free and reduced-cost counseling, advanced training for clinicians, and outreach to underserved residents. By strengthening community-based mental health services, the organization is helping ensure care is within reach for everyone who needs it. Read more here.
What to Check Out
NAACOS Southwest Regional Meeting
NAACOS will host its first Southwest Regional Meeting on Thursday, November 6, in Phoenix, Arizona, at The Phoenix Plaza. The agenda includes sessions on navigating policy changes, regional utilization trends, Medicaid and exchange impacts, technology strategy, and post-acute collaboration within value-based care organizations. Register here. here.
What We Are Reading
Venture Capital Firms Are Pouring Money into AI Scribe Companies
Modern Healthcare reports that investment in AI-based medical scribe technologies is drawing strong attention from venture capital, with deal activity growing in 2025. The trend underscores a broader push to automate documentation, reduce clinician burden, and streamline workflows. Read here.
Medicare Can Leverage Home-Based Care To Optimize Value For Homebound Beneficiaries
In a recent Forefront article, Health Affairs explores how Medicare can more effectively support homebound individuals through scalable home-based care models that improve outcomes and lower costs. Read here.
Exclusive: Organ Transplant Network Oversight Stalled Due to Shutdown
Axios reports that the ongoing government shutdown has forced the United Network for Organ Sharing (UNOS) to pause many oversight activities of the national organ transplant network, including compliance monitoring and policy development. Read here.
Medicaid Leader’s Playbook for Building Public Health Partnerships
The National Association of Medicaid Directors (NAMD) released a new playbook offering Medicaid leaders a practical roadmap for forging stronger, more effective collaborations with public health agencies. It includes strategies, case studies, and tools to help align priorities, overcome cultural and structural barriers, and design joint programs that promote better outcomes while making efficient use of resources. Read here.
Pop Health Podcast
Rural Health Transformation: How States Can Align Stakeholders for Lasting Change
The Rural Health Transformation Program represents a $50 billion investment in the future of rural health care. In this episode, we sit down with Caitlin Westerson, Senior Director for State Policy and Advocacy at United States of Care, to explore what this program means for states, providers, and communities. Together, we unpack the opportunities and challenges in applying for funding, the role of value-based care in building sustainable models, and how states can align stakeholders to create lasting change in rural health systems.