This week could see the start of another federal government shutdown that would leave countless workers without paychecks — possibly for weeks — as Democrats press to roll back health care budget cuts enacted earlier this year.
That leaves regular folks in a no-win situation, all but certain to get either a costly government shutdown, soaring health costs or possibly both.
In South Carolina people are used to being prepared for disasters, with a hurricane season that spans six months. We see those storms marching across the Atlantic and make plans to protect lives and property — where to go, what to take, supplies we should have on hand, important papers we might need, cash for when the ATMs go down and so on.
With an impending financial calamity driven by government actions, I’d suggest people take a similar approach. Think hard about what it would be like to go more than a month without a paycheck, as federal workers did during President Trump’s first term when the longest shutdown on record lasted 34 days.
Federal workers get back the pay they missed when a shutdown ends, yes, but few families are prepared to go weeks without a paycheck. Now’s the time to make plans, and as with hurricane preparations, hope that they don’t need to be used.
For example, take stock of financial resources and how they can be accessed. Maybe you signed up (or could quickly sign up) for a credit card that doesn’t charge any interest for the first year, which could help pay bills during a shutdown and be paid off once it ends. If you have a 401k plan, do you know what the rules are for borrowing your own money, and the pros and cons of doing so?
The Federal Employees Benefits Association suggests reaching out to creditors and landlords if you expect to be late on payments but know you’ll have the money when the government reopens.
A federal shutdown is an unusual financial challenge for the impacted workers, because despite the president’s threat of mass layoffs, a shutdown typically means that workers stay home but, by law, get paid in full when they return. So the challenge is in preparing to pay the bills for days or weeks without income.
I’ve written previously about emergency funds, and why people should try to set aside enough money — outside of retirement accounts — to cover several months of expenses. Those who’ve managed that difficult financial task should pat themselves on the back, because they’re already prepared to weather the storm.
But sometimes one big storm follows another, and the big storm lurking behind the shutdown fight is health care costs.
Enrollment for Affordable Care Act (Obamacare) plans begins on Nov. 1, and premiums are set to soar because enhanced premium credits were not extended in the big budget bill earlier this year. That’s one of the big sticking points in federal budget talks, along with the large cuts to Medicaid.
As the South Carolina Daily Gazette reported, more than 630,000 South Carolinians have Obamacare policies and 95 percent of them have been paying reduced costs — saving $500 to $700 monthly — due to the subsidies that are poised to end.
Don’t have Obamacare or Medicaid? Employer-provided health insurance premiums are expected to rise by double-digits for 2026, the Peterson-KFF Health System Tracker projected based on rate filings.
A shutdown could leave some without paychecks, for weeks
