Medicare 2026

Medicare and Social Security During a Federal Funding Lapse: What History Tells Us

When Washington runs short on time to pass a budget, the headlines can get scary fast. If you rely on Medicare or Social Security, it helps to know what has actually happened during past funding lapses — and what to watch for if another one comes along. Congress recently passed the Continuing Appropriations and Extensions Act, 2027 (Public Law 119-103), approved September 2, 2026, which keeps federal funding at fiscal year 2026 rates through December 11, 2026, unless full-year 2027 appropriations arrive sooner. That buys time, but it is a reminder to understand the ground rules.

Why Social Security keeps paying

According to a May 1, 2026 Congressional Research Service (CRS) report, Social Security benefits flow from a permanent appropriation. That means the authority to pay benefits does not expire when Congress misses an annual funding deadline. The staff work that supports those payments — answering phones, processing new claims, handling card requests — is funded through annual appropriations, so some of that work can be reduced or paused during a lapse. The checks, however, keep going out.

The Social Security Administration announced on October 14, 2026 a 3.6 percent cost-of-living adjustment (COLA) for benefits payable beginning January 2027. That adjustment is built into the program and does not depend on year-to-year budget negotiations.

What past Medicare experience shows

A November 16, 2023 CRS report looked back at prior funding lapses and found that people enrolled in Medicare Part A, Part B, and Part D continued to receive covered services, and the providers who treated them continued to be paid. Medicare Advantage plans likewise kept furnishing services and paying providers. CRS noted that none of those earlier lapses had lasted more than 35 days.

That record was tested again recently. A CRS report updated September 16, 2026 describes the most recent and longest government-wide funding lapse, which began October 1, 2025 and lasted 42 full days, ending November 12, 2025. On October 1, 2025, CMS announced that Medicare Administrative Contractors would continue to perform all functions related to Original Medicare claims processing and payment. On November 21, 2025, CMS confirmed those contractors had generally processed claims during the shutdown using the fee and payment schedules posted at cms.gov.

What does slow down

Past lapses have paused or slowed some CMS activity. The November 2023 CRS report noted that program integrity work against health care fraud and abuse, and the initial and recertification surveys of Medicare providers and suppliers, were among the activities suspended. SSA's August 2023 contingency plan, as summarized by CRS, listed issuing replacement Medicare cards among the SSA tasks that would be discontinued during a lapse. The workaround: you can log into (or create) a Medicare.gov account at any time to print or order an official copy of your card, or call 1-800-MEDICARE (1-800-633-4227) for a replacement by mail.

The telehealth lesson from October 2025

Not everything made it through the 2025 lapse untouched. CMS said several expiring Medicare payment provisions, including the telehealth flexibilities, lapsed on October 1, 2025, so many pre-pandemic telehealth limits applied again to services other than behavioral and mental health care. Public Law 119-37, enacted November 12, 2025, restored those flexibilities retroactively to October 1, 2025. CMS then encouraged practitioners who had charged patients for telehealth services on or after that date to submit the claims to Medicare and refund any overpayment to the patients. Under Public Law 119-75, enacted February 3, 2026, Medicare's telehealth flexibilities now run through December 31, 2027, and the Acute Hospital Care at Home initiative runs through September 30, 2030. Public Law 119-103 did not change those dates.

The takeaway: if a lapse happens around the time a payment policy is set to expire, there can be real, if temporary, bumps for patients and clinicians.

Enrollment windows do not pause

Annual Enrollment for 2027 coverage runs October 15 – December 7, 2026, with choices taking effect January 1, 2027. Budget drama does not move that window. A few national Part D figures to keep in mind as you compare options:

• The Part D out-of-pocket cap is $2,400 in 2027 (it is $2,100 in 2026).
• The most any Part D plan may charge as a deductible in 2027 is $700.
• The Part D base beneficiary premium for 2027 is $41.33. This is a national figure used in the late-enrollment penalty; actual plan premiums are set plan by plan.

The 2027 Part B standard premium and deductible, and the 2027 IRMAA income brackets and surcharges, have not yet been announced. CMS typically releases them in the fall. Check Medicare.gov for the official numbers once posted.

If you have Medicaid or Extra Help, remember that since 2025 you have a monthly Special Enrollment Period to move to Original Medicare with a stand-alone Part D plan, or to switch stand-alone Part D plans. Full-benefit dual-eligible people can join an integrated D-SNP in any month.

Weighing your coverage path — neutrally

As you review options, Medicare Advantage and Original Medicare paired with a Medigap policy and a stand-alone Part D plan are two different structures, each with trade-offs. Medicare Advantage bundles coverage and often includes extras, with plan networks and plan-specific rules. Original Medicare plus Medigap generally offers broad provider access and more predictable out-of-pocket costs for Part A and B services, with a separate Part D plan for drugs. Neither path is "best" — it depends on your providers, medications, travel habits, and budget.

Where to go for answers

For current, official information on enrollment, plan options in your area, and program updates, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, seven days a week.

This article is educational and is published by a privately owned Medicare information site. It is not affiliated with or endorsed by the federal government, CMS, or SSA.