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Government shutdown 101: Will Social Security and Medicare be affected?

Social Security and Medicare aren't funded by the spending bill tied up in the government-shutdown showdown, meaning that they would be affected only at the margins.

By Staff writer / April 8, 2011

Trays of printed Social Security checks wait to be mailed from the US Treasury's financial management services facility in Philadelphia in this Feb. 11, 2005, photo.

Bradley C. Bower/AP/File

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A true shutdown of the federal government could be a worrying moment for seniors, who would face the prospect of a sudden disapearance of Social Security income and Medicare coverage.

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Thankfully, that's not what would occur, even if a budget deadlock causes a so-called "government shutdown" to begin at midnight on April 8.

Politicians, after all, know that retirees are counting on Social Security and Medicare. And, oh yes, they vote.

These programs are viewed as essential services that would continue to make payments even as many other federal operations halt. And unlike typical federal programs, these mandatory entitlements have their own streams of revenue from payroll taxes, which require no congressional vote to authorize.

Still, even as these high-priority programs continue to make payments for beneficiaries, a shutdown might force them to pare back on staffing levels. That could mean that some phones go unanswered, and that new enrollees face delays in getting benefits launched.

Assurance, with exceptions

Federal agencies have been tight-lipped about their specific emergency plans if House Republicans, Senate Democrats, and President Obama can't reach a deal to fund the government for the rest of fiscal year 2011, which ends Sept. 30.

But both the White House and some lawmakers in both parties have sough to provide assurance, tempered with warnings that a shutdown wouldn't just be business as usual.

"Seniors will continue to get their Medicare and Social Security checks," Rep. Randy Forbes (R) of Virginia says in a shutdown-related statement on his website. But he suggests that "seniors could see delays in receiving their checks due to under-staffed offices. Additionally, during past government shutdowns, the Social Security Administration had to delay processing and payment for new claims and those who filed a change of address form."

Hospitals hopeful

Doctors and hospitals are expecting that Medicare payments will flow as usual.

"We are in touch with the [Obama] administration and they are aware of the importance of the timely processing of Medicare claims," Cecil Wilson, president of the American Medical Association, says in a statement released to news media. "We will do everything possible to be sure physicians are paid in a timely manner so seniors will have continued access to the health care they need."

One challenge, whether federal programs are mandatory entitlements like Medicare or not, is that federal workers are usually paid by funds that Congress appropriates. Just because the Social Security Administration has a trust fund to pay beneficiaries doesn't mean it has money on hand to pay its own staff.

Workers who stay on the job doing "essential" work wouldn't be paid until funding is enacted by Congress.

Government shutdown 101:

Introduction: What would a shutdown mean for you?

Part 1: What does it mean for veterans?

Part 2: Will I still have to file my taxes?

Part 3: Will Social Security and Medicare be affected?

Part 4: What does it mean for the military?

Part 5: What does it mean for homeland security?

Part 6: What does it mean for Medicaid?

Part 7: How will it affect unemployment insurance?

Part 8: What does it mean for welfare and food stamps?

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