Government shutdown breaks record. This week was forecast as a key inflection point in the shutdown:
These compounding pressures were expected to speed up negotiations to reopen the government.
After overwhelming Democratic victories on Election Day, including gubernatorial races in New Jersey and Virginia, the New York City mayoral race, and the California redistricting proposition, Senate Democrats openly split on how to approach the shutdown. With many Democratic candidates running on lowering costs, some Senate Democrats – plus House Minority Leader Jeffries (D-NY) – saw the results as justification to stay firm in opposing a continuing resolution (CR) that doesn’t include an extension of the enhanced APTCs. Others were already in negotiations with Republican counterparts and remain more eager to re-open the government. Rank-and-file Senate negotiations are ongoing, but at this time there is no involvement from leadership.
President Trump’s role remains a wildcard. So far, he has remained outside of negotiations, although he did call Senate Republicans to the White House after Tuesday’s elections and chastised them for not agreeing to “go nuclear” by overriding the filibuster for appropriations bills so that the CR could be passed on a simple majority vote, making negotiations with Democrats unnecessary. At this time, Senate Republicans do not have the votes to make that change, and Senate Majority Leader Thune (R-SD) told President Trump that was the case. President Trump also told Republican senators that the shutdown was hurting Republicans more than Democrats. All eyes are on whether President Trump chooses to take a more active role in negotiations to end the shutdown. At the time of this writing, he has not.
Because the CR that passed the House late in September and has consistently failed in the Senate would only provide funding through November 21, 2025, this week’s discussions acknowledged that a CR with a later end date will be necessary. Democrats and some Republican appropriators prefer a CR end date of late December 2025, while more conservative members support a CR going into at least late January 2026. Members have also discussed attaching the full fiscal year 2026 Agriculture-US Food and Drug Administration (FDA), Military-Construction, and Legislative Branch bills to the CR, along with a commitment to a future vote on the enhanced APTCs. That’s the sticking point for Democrats, who see affordability as a key issue after this week’s elections and want to ensure the extension of the enhanced APTCs that help make ACA coverage more affordable. Speaker Johnson (R-LA) and Leader Thune remain committed to their position that Senate Democrats must vote to reopen the government before legislating on the enhanced APTCs. Speaker Johnson, in particular, has thus far refused to consider any commitment to moving legislation on that front.
Even though the House remained out of session this week, Reps. Bacon (R-NE), Suozzi (D-NY), Hurd (R-CO), and Gottheimer (D-NJ) released principles for temporarily extending and reforming the enhanced APTCs. The principles state that any enhanced APTCs should include an income cap and prevent fraud and improper payments.
Senate Aging Committee discusses OAA. During the hearing, Republicans highlighted the importance of the OAA while questioning witnesses if changes should be made to better serve recipients. Democrats emphasized the OAA’s cost-effectiveness and how it saves taxpayers money by reducing reliance on institutional care. Witnesses and most committee members expressed support for the OAA, and many explicitly noted the need to reauthorize it.
Senate Homeland Security & Governmental Affairs Subcommittee on Investigations examines ACA. Homeland Security and Governmental Affairs Investigations Subcommittee Chairman Johnson (R-WI) left no question about his purpose for holding this hearing titled “Assessing the Damage Done by Obamacare.” During the hearing, Republicans noted their support for dismantling the ACA and replacing it with high-risk pools, while Democrats continued to push for an extension of the enhanced APTCs.
CMS finalizes Medicare Physician Fee Schedule Rule for CY 2026. CMS released the final rule on the evening of October 31, 2025. CMS finalized most provisions as proposed or with only slight modifications, despite comments from stakeholders that sought changes to the efficiency adjustment and indirect practice expense methodology.
The rule has significant implications for Medicare physician payment in 2026. While the final conversion factors (CFs) saw increases of 3.77% and 3.26%, respectively, from the CY 2025 CF, many other finalized policies degrade the positive update for certain specialties and practices. Specifically, CMS finalized a 2.5% efficiency adjustment; reduced the amount of indirect practice expense allocated per work relative value unit for facility services; and established a significant payment change for skin substitutes. Read more in the CMS fact sheet and press release, and this week’s McDermott+ Regs and Eggs.
CMS announces deal on expanded Medicare, Medicaid coverage of weight loss drugs. President Trump announced that as part of the most-favored nation (MFN) deal, Medicare and Medicaid can cover GLP-1 drugs for the treatment of obesity at negotiated rates. Until now, these programs were prohibited from covering anti-obesity medications for the purpose of weight loss. Under the Biden administration, CMS proposed to cover GLP-1 drugs in both Medicare and Medicaid for the purpose of weight loss, but the Trump administration did not finalize that policy.
The CMS Innovation Center later announced the GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) Model, set to run from 2026 – 2030. The voluntary model is designed to allow participating manufacturers to provide supplemental rebates to participating state Medicaid programs for certain Covered Outpatient Drugs, aligning prices with the negotiated MFN prices. Medicare and state Medicaid programs that opt in to the model will be able to purchase GLP-1s for all indications at $245/month. Medicare beneficiaries’ copay will be $50/month. CMS projects that at this price, the increased coverage will be budget neutral after two years. Administration officials hinted at an additional model to cover the medications in Medicare.
The same day, Senate Finance Committee Ranking Member Wyden (D-OR) and House Energy & Commerce Committee Ranking Member Pallone (D-NJ) released statements touting the Medicare Drug Price Negotiation Program, passed by Democrats in 2022, that gave Medicare the ability to negotiate prices of drugs, including GLP-1s.
USDA responds to SNAP funding ruling. Last week, two federal judges in Massachusetts and Rhode Island ruled that USDA must continue funding SNAP benefits in November, despite the government shutdown, by using contingency funds. The Trump administration responded this week that USDA only had enough money in the contingency fund to cover half of eligible households’ current allotments in November, and that the agency would not use additional funding sources to cover the other half. The administration stated that no funds remain for new SNAP applicants certified in November. Later in the week, President Trump stated SNAP benefits would not go out while the shutdown continued, but the administration later walked that back. USDA later announced that the available funding would actually cover about 65% of November’s benefits.
The judge issued an additional ruling late this week requiring full payment of SNAP benefits for November, which USDA appealed. The ongoing litigation is likely to delay or complicate receipt of benefits. Many states, cities, and local organizations are stepping in to help fund food assistance in this window.
Public health groups ask court to dismiss ACIP members. The plaintiffs in a federal case before the US District Court for the District of Massachusetts amended their original July 2025 complaint against the US Department of Health and Human Services (HHS) to request the dismissal of the new ACIP members appointed by HHS Secretary Kennedy this summer. The original case centered on May 2025 Centers for Disease Control and Prevention COVID-19 vaccine recommendations. The amended complaint argues that the firing of previous ACIP members and the appointment of new members was arbitrary and capricious under the Administrative Procedures Act, and asks for that action to be vacated.
Both chambers were scheduled to be out of session next week for Veterans Day, but Senate Majority Leader Thune is keeping the Senate in session today and possibly through the weekend to try to advance an amended version of the House-passed CR with some full-year funding bills attached. It is unclear if there are enough Democratic votes to meet the 60-vote threshold. The House will remain out of session next week unless there is a Senate-amended CR to vote on, in which case they could return. If the Senate leaves town over the weekend without an agreement, the shutdown is likely to continue into the week of November 17, 2025. On the regulatory front, we await the release of the remaining Medicare CY 2026 final rules on outpatient, home health, and end-stage renal disease payment.
