Health Policy Update | Exclusive News and Resources for GIH Partners

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October 1, 2025

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Spotlight

Fiscal year (FY) 2025 funding for the United States government ended on Tuesday, September 30. As Congress was unable to come to an agreement on fiscal year FY 2026 funding for federal agencies before the September 30 deadline, the federal government shut down at midnight on October 1.

 

Medicaid and Medicare benefits have not stopped, but the shutdown could have significant effects on grants from the Department of Health and Human Services (HHS), regulatory activity, and staff. Regarding new grants, generally, an agency cannot incur a new obligation when the funding source for that obligation would be the lapsed appropriation. When performance under an already-issued contract or grant is not impacted by a lapse, the contractor or grantee may proceed with its work during the lapse period. Agency employees paid with annual appropriations and who perform an activity associated with contract or grant administration should generally not continue work during a lapse in appropriations.

 

Additionally, drafting, reviewing, and publishing policy and regulatory documents (such as proposed or final regulations, submitted comments, guidance documents, and other publications) must be paused during a shutdown, with some exceptions. Since a shutdown has now occurred, it will continue until Congress passes, and the President signs, some type of appropriations bill to re-open some or all the federal government.

 

Last week, the White House Office of Management and Budget (OMB) also directed agencies that in the case of a lapse of funding, agencies should consider Reduction in Force (RIF) notices for all employees in programs, projects, or activities for which (1) discretionary funding lapses on October 1, 2025; (2) another source of funding is not currently available; and (3) the program or activity is not consistent with the President’s “priorities.”

 

Administration Updates

On September 25, 2025, the White House issued National Security Presidential Memorandum (NSPM) 7, on "Countering Domestic Terrorism and Organized Political Violence." NSPM-7 calls for the establishment of a federal strategy to combat what it describes as a dramatic increase in “political violence.” The memo directs focus on institutional and individual funders who are “responsible for,” who “sponsor,” or who “aid and abet” those who engage in domestic terrorism or political violence. It also directs the Internal Revenue Service to ensure that no tax-exempt entities are “directly or indirectly” financing political violence or domestic terrorism. NSPM-7 does not lay out a timeline for action on any piece of the strategy. The full text of NSPM-7 can be found here.

 

On September 25, the Administration for Children and Families (ACF) within the Department of Health and Human Services (HHS), announced a new pilot with the Temporary Assistance for Needy Families (TANF) program, which will replace the Work Participation Rate performance measure with the following new outcome-based metrics:

  1. Employment Rate: percentage of work-eligible individuals who are in unsubsidized employment during the 2nd quarter after exiting the program;
  2. Median Earnings: median level of earnings of work-eligible individuals, who are in unsubsidized employment during the second quarter after the exit; and
  3. Median Earnings: median level of earnings of work-eligible individuals in the fourth quarter after the exit, who were in unsubsidized employment during the second quarter after the exit.

Five states—Arizona, Iowa, Nebraska, Ohio, and Virginia—will participate in the pilot. As part of the pilot:

  • Arizona will engage directly with employers that have openings to connect TANF participants with employment opportunities.
  • Iowa will improve referral coordination across services, support financial literacy and decisionmaking tools for TANF participants, and partner with employers to create employment opportunities.
  • Nebraska, in partnership with community organizations, colleges, and businesses, will develop personalized pathways for TANF participants to strengthen connections to local jobs. Pathways will include referrals to Nebraska’s TANF-funded Fatherhood and Healthy Marriage Initiative.
  • Ohio will implement a “well-being assessment” for TANF participants, which will include intensive case management services, financial literacy training, and support for counties to build community capacity.
  • Virginia will establish Personalized Results Plans for TANF participants to build upon the success of the Career Pathway Pilot, which blends sector-based training, intensive case management, and employment engagement to support participants as they gain credentials in fields like health care and skilled trades.

Funders working in these states should be aware of state interests in affecting the outcomes that will be measured in these TANF pilots.

 

Additionally, ACF announced it awarded $61 million in supplemental nutrition funding to Head Start programs to support nutrition services, promote healthy eating habits, and improve access to nutrient dense foods. The programs will be used to support:

  • materials, supplies and equipment, including gardens or gardening supplies designed to foster farm-to-table strategies, cooking demonstration kits, and commercial grade appliances;
  • food service upgrades, including modernization of kitchen facilities to prepare fresh foods on-site, designated breastfeeding spaces, and procurement of locally sourced nutritious food items;
  • nutrition education, including workshops and community events for families, training for staff on nutrition best practices, and consultation with dieticians or nutritionists;

These funds for these grants were provided by Congress for FY2025 and have been released by the department in order for grantees to continue and expand work that has been supported by these grant programs.

 

Last week, the Substance Abuse and Mental Health Services Administration (SAMHSA) announced it:

  • Allocated more than $1.5 billion in FY 2025 funding awards through the State Opioid Response (SOR) and Tribal Opioid Response (TOR) grants.
  • Awarded $45 million in new supplemental funding to states through the State Opioid Response (SOR) program to focus on sober or recovery housing among young adults. This is one-year supplemental funding that requires grant recipients to develop and/or expand recovery housing services for young adults who have opioid or stimulant use disorders. The funding can also be used to support family-based treatment, care coordinators, and recovery services.

On September 22, the President hosted a press conference with HHS Secretary Robert F. Kennedy, Food and Drug Administration (FDA) Commissioner Dr. Marty Makary, Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz, and National Institutes of Health (NIH) Director Dr. Jay Bhattacharya during which he made several controversial announcements related to autism, including linking it to use of acetaminophen during pregnancy. Specifically:

  • NIH launched the Autism Data Science Initiative (ADSI), a research initiative that will fund 13 projects to investigate contributing factors to autism spectrum disorder (ASD), including environmental exposures (such as pesticides and air pollutants), maternal nutrition and diet, perinatal complications, psychosocial stress, and immune responses during pregnancy and early development. A list of the funded projects is available on the NIH Division of Program Coordination, Planning, and Strategic Initiatives website.
  • FDA initiated the label change process for acetaminophen “to reflect evidence suggesting that the use of acetaminophen by pregnant women may be associated with an increased risk of neurological conditions such as autism and ADHD in children,” in addition to sending a notice to physicians urging them to “consider minimizing the use of acetaminophen during pregnancy for routine low-grade fevers.” However, in the letter, Dr. Makary also states, “This consideration should also be balanced with the fact that acetaminophen is the safest over-the-counter alternative in pregnancy among all analgesics and antipyretics; aspirin and ibuprofen have well-documented adverse impacts on the fetus.”
  • FDA will release a Federal Register notice for a label change to leucovorin, to establish it as a treatment for children with cerebral folate deficiency and symptoms associated with ASD. HHS stated that, following the label change, state Medicaid programs will be able to cover leucovorin in accordance with the prescription drug’s updated label.

These announcements drew an immediate response from policymakers and medical, public health, and advocacy groups, with many noting that the science is not conclusive on this topic and others questioning the scientific basis for the announcement.

 

On September 19, President Trump signed a Proclamation to restrict new H-1B Visa recipients from entering the U.S., including requiring a $100,000 payment to accompany or supplement H-1B petitions and prioritizing high wage-earning H-1B visa recipients.

  • The proclamation states that the “high numbers of relatively low-wage workers in the H-1B program undercut the integrity of the program and are detrimental to American workers’ wages and labor opportunities, especially at the entry level, in industries where such low-paid H-1B workers are concentrated,” specifically noting the tech industry.
  • For any new H-1B applicants, including physicians, the employer or the applicant would be required to make a $100,000 payment, a significant increase from the current cost. This will apply to all new applicants from the March 2026 lottery moving forward. For any current H-1B holders, no payment is required and no restriction exists on travel or renewal.
  • The proclamation includes an exception to “any individual alien, all aliens working for a company, or all aliens working in an industry,” whose employment “is in the national interest and does not pose a threat to the security or welfare of the United States,” at the discretion of the Secretary of Homeland Security,” but no such exemptions have yet been announced.
  • The restriction is set to expire on September 21, 2026. However, the proclamation also directs the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security to submit to the President a recommendation on whether an extension or renewal of the restriction “is in the interests of the United States” within one month of the next H-1B lottery held.

The health care sector, including hospitals, physician groups, and pharmaceutical manufacturers, may be impacted by the Proclamation. Some hospitals and associations have indicated they are assessing the changes and may push for exemptions. Without exemptions, it is possible that some areas may experience a shortage of health care providers, and existing provider shortages will be exacerbated.

 

On September 18 and 19, the Centers for Disease Control and Prevention (CDC) Advisory Committee on Immunization Practices (ACIP) voted on several recommendations related to the childhood vaccine schedule and COVID-19 boosters. The advisory committee voted to:

  • Recommend children below age four receive a measles, mumps and rubella (MMR) vaccine and a varicella (chicken pox) vaccine separately.  However, since 2009, the CDC has already recommended that for the first dose in children under age 4, it is safer to give MMR and varicella separately rather than use the combined MMRV vaccine.
  • Recommend all pregnant women be tested for Hepatitis B infection. This has also been an established standard by the CDC since 1988.
  • Update the pediatric and adult immunization schedules for COVID-19 vaccines to be based on individual-based decisionmaking. However, this “individual decision-making" stance conflicts with additional requirements to see a physician to obtain a prescription for the vaccine.
  • Recommend the CDC review and change how they explain vaccines and related risks to patients and providers, including a more consistent, standardized “informed consent” process across the U.S. They specifically want CDC to spell out at least six risks and uncertainties of vaccines for consumers.

Insurance coverage of vaccines is usually linked to vaccines that are recommended by ACIP. However, in response to the significant changes to the committee, America’s Health Insurance Plans (AHIP), the trade association for health insurers, announced on September 16 that “health plans will continue to cover all ACIP-recommended immunizations that were recommended as of September 1, 2025, including updated formulations of the COVID-19 and influenza vaccines, with no cost-sharing for patients through the end of 2026.”

 

Congressional Updates

On September 18, the Senate passed H.R. 2483, the SUPPORT for Patients and Communities Reauthorization Act, by unanimous consent. The bill reauthorizes funding for and makes changes to programs aimed at addressing the opioid and mental health crisis. In addition to reauthorizing funding for these programs from FY 2026 to 2030, the legislation allows funding from the First Responder Training Program, which currently supports the purchase of naloxone, to be used to support drugs and devices for non-opioid overdoses. Finally, the legislation requires HHS to take action to address cybersecurity threats and eliminate known vulnerabilities and to review relevant data pertaining to the scheduling products with both buprenorphine and naloxone. H.R. 2483 previously passed the House on June 4 and will now be sent to the White House for the President’s signature. Funding for these programs is still dependent on FY 2026 funding; however, the reauthorization reflects continued bipartisan support in Congress for these efforts, even after the Administration proposed the elimination of many of these programs.

 

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