With the federal government shut down, HHS plans to furlough 40% of its workforce
The federal government is officially shut down, after Republicans and Democrats in Congress failed to come to terms over funding. At the center of the fight is American healthcare policy, with Democrats seeking an extension to COVID-era subsidies that make health plans purchased through the Affordable Care Act (ACA) marketplace more affordable, even for those with pre-existing conditions.
Republicans, however, maintain that those subsidies benefit illegal aliens. Notably, federal law does allow legal residents—those on a green card or who are seeking citizenship—to purchase plans through the marketplace, something Healthcare.gov does not dispute. However, illegal residents are not eligible.
As it stands currently, the website says “lawfully present” and “qualified non-citizen” immigrants are permitted to buy plans from the marketplace and receive subsidies, based on their income.
However, provisions of the One Big, Beautiful Bill Act—a Republican-backed spending package that was signed into law in July—would limit ACA subsidies, making it so only legal permanent residents and U.S. citizens can benefit from them.
Additionally, similar provisions also reduce the subsidies significantly—and in some cases eliminate them entirely as part of broad cuts to federal healthcare spending included in the bill. Meaning, those who rely on the exchange for medical coverage would inevitably see a big increase in premiums going into next year.
As it stands, Democratic leadership in the House and Senate are seeking to have many of those cuts rolled back. Republicans have countered saying they’ll agree to negotiate an extension to ACA subsidies, but only if Democrats concede and vote to lift the cap on the national debt, which would allow the federal government to stay open.
Without a deal in place, Democrats argue that with government open, Republicans will have no reason to negotiate.
For now, all attempts at a compromise have failed. The federal government is likely to remain closed until at least next week, which is when members of the legislature will return from a pre-scheduled break.
This marks the first government shutdown since 2019, during Trump’s first terms.
More layoffs at HHS?
In response to the government shutting its doors, the U.S. Department of Health and Human Services (HHS) announced it intends to furlough staff as part of a "contingency plan" it’s established for limited operations heading into 2026.
The agency said it needs only 12,206 employees to “perform activities expressly authorized by law” and another 2,654 to “perform activities necessarily implied by law.” In total, it said it anticipates it will cut 32,460 jobs as a result of the loss in appropriation funding, which is authorized by Congress.
Notably, those presumably temporary layoffs represent over 40% of all jobs at HHS.
While the agency said it will continue to ensure Medicaid and Medicare operate as normal, it remains to be seen how such cuts will impact other programs. HHS did add that there would inevitably be communication delays from its sub-agencies, including the Centers for Disease Control and Prevention (CDC), as a result of downsizing.
This is a developing story.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.