Federal Recap: October Edition

The Shutdown Lingers On: Remember when we said a government shutdown was coming in our July report? Well - the federal government has now been shut down now for an extraordinary 27 days after the U.S. Senate's failed attempts to pass a continuing resolution to keep the government open. Essential services continue, but hundreds of thousands of federal employees are furloughed or working without pay. Speaker Mike Johnson’s promise to move all twelve appropriations bills through regular order has collapsed under the weight of political reality. The longer this drags on, the more painful it becomes for federal workers, contractors, and anyone who depends on government services, including those who rely on SNAP benefits. USDA notified states last week that SNAP benefits will be reduced or paused beginning November 1st without congressional funding. Will Rogers had it right: Congress really does just pick money out of the air. Or in this case, fail to pick it at all.

Medicare Advantage Under Fire: The Trump administration’s CMS is cracking down on

Medicare Advantage plans after years of allegations about overbilling and denied care. New audits revealed billions in improper payments, and the agency is proposing stricter oversight and reduced reimbursement rates. Health insurers are pushing back hard, warning that cuts will force them to reduce benefits or exit markets. Seniors caught in the middle are wondering if advantage is about to disappear. This could reshape the Medicare landscape heading into an election year.

IRA Drug Price Negotiations Hit Medicare: Speaking of Medicare...CMS has released final guidance for the next round of price-setting under the Inflation Reduction Act's Medicare Drug Price Negotiation Program, continuing the controversial policy as millions of Americans navigate the 2026 Open Enrollment period that began October 15th. The guidance covers Initial Price Applicability Year 2027 and establishes how CMS will negotiate maximum fair prices for high-expenditure drugs. Biotech leaders warn the program amounts to government price controls that will harm innovation and ultimately hurt patients, with drug makers facing excise taxes up to 1,900% of a drug's price if they refuse to participate. Meanwhile, Medicare users shopping during open enrollment face fewer plan choices and rising costs, though the first ten negotiated drug prices will take effect in 2026. Critics argue the IRA dismantles the framework that has fueled biotech innovation while doing nothing about pharmacy benefit manager abuses4. that actually drive up drug prices. This could reshape prescription drug access for Medicare's 65 million beneficiaries heading into an election year. Telehealth’s Uncertain Future: Temporary telehealth flexibilities enacted during COVID are set to expire at the end of 2025 unless Congress acts. That means potential rollbacks on cross-state licensure, reimbursement parity, and remote prescribing. Healthcare providers are lobbying hard to make the flexibilities permanent, while some lawmakers express concerns about fraud and quality of care. Rural communities stand to lose the most if telehealth access is curtailed. The clock is ticking.

CDFI Fund Dissolved: In a stunning move, the Trump administration announced the dissolution of the Community Development Financial Institutions (CDFI) Fund, which has provided billions in grants and tax credits to mission-driven lenders serving low-income communities since 1994. The administration claims the program is inefficient and duplicative of other federal efforts. Critics argue it's another casualty of the President's aggressive agency reorganization agenda, following the Supreme Court's July decision greenlighting executive restructuring. Community banks, credit unions, and nonprofits that relied on CDFI funding to serve underbanked populations are scrambling to fill the gap. The economic impact on rural and underserved communities could be significant.

Will the CFPB be Dissolved?: Speaking on the Charlie Kirk show, White House Budget

Director Russell Vought said he expects to successfully shut down the Consumer Financial

Protection Bureau within the next two or three months. Vought claimed the agency wants to

weaponize the tools of financial laws against basically small mom-and-pop lenders and other small financial institutions.There's just one problem: the CFPB was authorized by an Act of Congress under the Dodd-Frank Act. If the Administration does indeed dissolve the Bureau unilaterally, legal fights will inevitably ensue. This would be the ultimate test of the new precedent set by the Supreme Court's July ruling on executive reorganization authority. Can the President simply eliminate an agency created by statute? We're about to find out. Financial institutions should prepare for regulatory uncertainty, as well as litigation.

The TikTok Saga Continues: Remember when TikTok was supposed to be banned or

sold by January 2025? Neither happened. The deadline came and went with ByteDance

still in control and 170 million American users still scrolling. Now the White House is

quietly negotiating a national security agreement that would allow TikTok to continue

operating under increased oversight. Critics call it a cave. The administration calls it

pragmatic. Either way, it's a reminder that actually banning a platform with that many

users is harder than anyone thought.

The 340B Program in the Crosshairs: The 340B drug pricing program, which

requires pharmaceutical companies to provide discounted drugs to certain hospitals and

clinics serving low-income patients, is facing renewed scrutiny. Drug manufacturers

claim hospitals are abusing the program and pocketing profits instead of passing

savings to patients. Hospitals counter that 340B funding is essential for providing charity

care. Congress is considering reforms that could significantly limit program eligibility. For

rural hospitals already operating on razor-thin margins, changes to 340B could be

existential.