Shutdown Shockwaves: CFOs Brace for Financial Fallout from Hospital-at-Home and ACA Uncertainty

As the government shutdown drags on, CFOs face financial strain from halted Medicare waivers, rising uncompensated care, and uncertain ACA subsidies.

The government shutdown is now the second longest in history, stretching into its third week after an 11th failed attempt to pass a House-approved funding measure. The lapse in federal funding has triggered a waterfall of disruptions across the healthcare industry, from delayed paychecks and stalled federal programs, to rising insurance premiums and growing “data blind spots” all as flu season quickly approaches.

A spotlight on the 'hospital‑at‑home' risk zone

Among the pain points within the shutdown is the disruption to the CMS Acute Hospital Care at Home (AHCaH) initiative.  As of Oct. 1, 2025, telehealth flexibilities enacted in 2020 expired, and with the loss of key Medicare reimbursements, many participating hospitals discharged or transferred home‑based patients back to brick‑and‑mortar settings.

For CFOs, this disruption presents a dual threat: operational (traditional bed‑capacity pressures) and financial (loss reimbursements tied to remote care which prove to be cost saving over time). The flexibility provided by AHCaH and telehealth waivers during the pandemic helped some systems redirect inpatient volume, improve operational throughput, and manage cost.

The end of the waivers raise material risks for hospitals. For instance, hospitals that relied on those waivers to build remote‑care infrastructure now face stranded investments and uncertain return on that investment, which in some cases is major. Patient flow may also invert, and instead of decompressing inpatient capacity, hospital-at-home models will now push that volume back into expensive inpatient units, just as respiratory demand rises due to flu season.

The reimbursement cliff affects margins. Home‑care and telehealth ventures lose the financial rationale of justifying the remote care setting if Medicare won't pay the higher IPPS‑level rates previously enabled by the waiver.

Impact on ACA Subsidies and provider risk

The shutdown is also intimately tied to the future of the enhanced subsidy program under the Affordable Care Act (ACA). The enhanced premium tax credits introduced in 2021 and extended through 2025 are set to expire at year's end unless Congress acts. With the funding fight unfolding, an extension remains in limbo.

The implications for hospitals and systems are nothing to skim over. If the subsidies lapse, the average marketplace plan premium is projected to increase 114 % in 2026 (from about $888 to nearly $1,900) for marketplace enrollees. Through this, provider income is threatened. One study estimates more than $32 billion in lost revenue for health‑care providers, and another $7.7 billion in unpaid medical bills due to a surge in the uninsured. Uncompensated care burdens will likely also increase as more uninsured patients translate into greater unpaid hospital bills and higher stress on hospitals' margins.

There's also a higher likelihood of greater risk‑pool deterioration as younger and healthier enrollees may drop out if premiums soar. This would worsen adverse‑selection pressures and drive premiums higher across the market, creating high costs for every party.

The CFO To Do

For CFOs, the chain reaction is clear: Failure to extend subsidies could mean higher uncompensated care volumes, increased bad debt, and greater margin pressure, all trapped within an already uncertain operating environment.

As discussed at this year's CFO Exchange, CFOs are trying to gain some perspective on the challenges, and many are recognizing this moment in healthcare as one that's prime for transformation. Against this dark backdrop of federal uncertainty, CFOs can implement several strategies to preserve liquidity and sustain growth.

Re‑prioritizing cash reserves and stress‑testing models

CFOs can increase scenario planning to model shutdown extension timelines, reimbursement delays, and volume shifts back to inpatient settings from the AHCaH model. They can try to cushion their health system's liquidity by recalibrating investment in other models like home‑care.

Re‑evaluating home‑based care programs
Many systems had committed to hospital‑at‑home programs, but the reimbursement uncertainty has triggered even more caution. CFOs are pausing or scaling back admissions to home‑care models until legislative clarity emerges. Some are renegotiating vendor contracts and shifting focus toward commercial‑payer or value‑based home care rather than relying solely on Medicare fee‑for‑service.

Leveraging payer diversification and value‑based care expansion
With Medicare reimbursement under threat, CFOs are accelerating growth in segments less dependent on federal funding, such as commercial population health contracts and home‑care partnerships with payers. Establishing alternate revenue streams can act as a buffer against federal program shutdowns.

Aggressive cost‑structure optimization
Many systems are revisiting their staffing models, supply‑chain contracts and fixed‑cost burdens. Given the heightened risk of federal reimbursement swings, finding and sustaining operational flexibility is a CFO priority. Look for opportunities in variable staffing, cross‑training, postponing large capital expenditures, and revisiting service‑line profitability are altogether.

Advocacy and policy monitoring
CFOs are more also deeply engaged in tracking federal policy developments, particularly the status of AHCaH and telehealth waivers. They are also aligning with system strategy teams to influence the policy narrative and prepare for retroactive reimbursement scenarios.

Federal healthcare endeavors need the expertise and experience of health system CFOs, and now is the time for them to voice their insights and ideas to steer the narrative and improve the foundational systems that carry the industry.