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The Recent Shutdown: What’s Going On
On October 1, 2025, at 12:01 a.m. EDT, the U.S. federal government entered a shutdown after Congress failed to pass a full appropriations bill.
The core of the dispute centers on whether to extend or include enhanced health insurance premium tax credits under the Affordable Care Act (ACA) in any spending agreement.

Democrats insist the credits must be preserved; Republicans say those decisions should be handled separately from a “clean” funding bill.
By many accounts, nearly 900,000 federal employees have been furloughed (i.e. sent home) and several hundred thousand more are working without pay during the shutdown.

Essential services (e.g. military operations, some law enforcement, Social Security, Medicare, veterans’ care) generally continue, but many programs and agencies are partially or fully scaled back.

Courts have announced they can continue paying staff through October 17 under existing funds — but beyond that, only judges and Supreme Court justices have constitutional guarantees.
Here are some of the major implications and risks that this shutdown is creating (or could create) in the near term.
  • Insurance & Health CoverageACA Premium Subsidies at Risk
  • The enhanced tax credits that many depend on could expire if not extended. Without them, millions could see big increases in their monthly premiums. Some states already warn of premium hikes exceeding 90% in certain markets.
  • Delays in Medicare / Medicaid Payments
  • If the shutdown drags on, doctors, hospitals, and clinics may see slower reimbursements for Medicare or Medicaid claims, potentially putting pressure on service providers.
  • Insurance Disruptions in Public Programs
  • Programs like the National Flood Insurance Program (NFIP) may suspend issuance or renewal of new policies when funding is cut — affecting property closings or insurance requirements in flood zones. (While not yet reported as a major story, this is a known risk in shutdowns.)
  • Administrative Backlogs & Slower Processing
  • Appeals, audits, enrollment changes, or claims disputes handled by federal agencies could face delays as staff are furloughed.
  • Tax & IRS ImpactsDelays in IRS Services
  • Some IRS functions are designated essential and may continue early in a shutdown, but non-critical services (e.g. taxpayer assistance centers, complex audits, correspondence) could be scaled back or paused.
  • Refunds & Processing Delays
  • If the IRS’s staffing or operations are hampered, tax return processing and refund issuance could slow significantly.
  • No Automatic Deadline Changes
  • The shutdown does not automatically extend filing or payment deadlines. Unless Congress enacts new legislation to push deadlines, taxpayers still must meet statutory deadlines.
  • Cash Flow & Withholding Issues for Federal Workers
  • Many federal employees are facing unpaid work or furloughs. Though back pay is guaranteed under law (Government Employee Fair Treatment Act of 2019), timing could disrupt withholding, estimated tax payments, or personal budgeting.
  • Broader Economic & Fiscal Effects
  • Economic Output Loss
  • According to a White House memo, the U.S. could lose $15 billion in GDP per week during a prolonged shutdown, and consumer spending may drop ~$30 billion. Politico
  • Unemployment / Layoff Risk
  • If the shutdown persists, warnings are going out about possible permanent layoffs of federal workers. TIME+2Business Insider+2
  • Travel & Infrastructure Disruptions
  • While basic operations like TSA and air traffic control continue, staff working without pay, absenteeism, and fewer support roles may lead to delays, longer lines, or lowered service quality. AP News
  • Some agencies like the FTC are fully closed, disabling fraud complaint submissions and identity theft reporting. The Times of India
  • Uncertainty & Investment Effects
  • Markets dislike uncertainty. Prolonged shutdowns can lead to lower business confidence, reduced investment, and a tilt toward safer assets — all of which can ripple into higher costs of capital or risk premiums that insurers factor into pricing.
If you have more questions or concerns you can call us to schedule your individual consultation