HHS Budget Leak Threatens Senior Medicare Assistance
A recently leaked “pre-decisional” Health and Human Services (HHS) budget for fiscal year 2026 reveals a troubling proposal to eliminate approximately $55 million in discretionary funding for the State Health Insurance Assistance Programs (SHIP). These vital programs provide Medicare beneficiaries with free, unbiased counseling to help them navigate the complex landscape of Medicare plan options.
The 64-page draft budget document, dated April 10, is still subject to Congressional approval. However, the mere suggestion of defunding this 35-year-old program has sent shockwaves through the Medicare advocacy community, as SHIP often represents the only source of independent, unbiased information available to seniors making critical healthcare decisions.
Partial Funding May Remain
While the proposed cuts would eliminate the $55.242 million in discretionary funding, another section of the budget document (page 40) does include a line item of $15 million for the SHIP program. This amount, mandated by prior Congressional action, could potentially sustain operations during the first quarter of the fiscal year, covering the annual Medicare enrollment period from October 15 to December 7, 2025.
However, this reduced funding would represent a dramatic 73% cut from current levels, severely limiting the program’s ability to serve millions of Medicare beneficiaries nationwide.
Current Status of SHIP Funding
Before the budget document leaked, Melissa Simpson, associate director of the Office of Healthcare Information and Counseling (OHIC) which oversees SHIP, confirmed to MedPage Today that “SHIP was level-funded in the Continuing Resolution at $55.242 [million to] continue their important work.” SHIP programs currently operate under the Administration for Community Living (ACL), an agency within HHS.
Concerns About Program Standardization
Bonnie Burns of California Health Advocates, an organization that trains SHIP counselors in California, expressed concern about language in the leaked document suggesting states might use other federal funding sources to maintain programs facing elimination or cuts.
The document states: “The Budget eliminates several programs that existed within ACL, but allows states to use grant funding they receive from funded formula grant programs to provide or invest in services provided by programs that the Budget eliminates.”
Burns warns this approach could transform SHIP into “a mishmash of various state programs, without the uniform training or standards it has now.” She emphasized, “SHIP programs would vary all over the country,” potentially compromising the quality and consistency of services currently provided to Medicare beneficiaries.
Other Vulnerable Programs
The pre-decisional budget also targets seven other ACL programs for elimination, including:
- Preventive Health Services
- Elder Falls Prevention
- Lifespan Respite Care
- Long-Term Care Ombudsman
- Chronic Disease Self-Management Education
- Elder Rights Support Activities
- Elder Justice/Adult Protective Services
Additionally, discretionary funding for Aging and Disability Resource Centers would be eliminated, and all ACL programs would move from being directly under HHS to the Centers for Medicare & Medicaid Services (CMS).
SHIP’s Various State Identities
The SHIP program operates under different names depending on the state:
- HICAP (Health Insurance Counseling and Advocacy Program) in New York, California, and Texas
- SHINE (Serving Health Insurance Needs of Elders) in Florida and Massachusetts
- SHIBA (Statewide Health Insurance Benefits Advisors) in Washington, Idaho, and Oregon
- VICAP (Virginia Insurance Counseling and Assistance Program) in Virginia
In total, there are 54 SHIP programs nationwide, including one in every state, the District of Columbia, Puerto Rico, Guam, and the U.S. Virgin Islands.
The Critical Work of SHIP Counselors
According to a 2023 SHIP Report to Congress, approximately 12,500 trained volunteers and paid staff serve as SHIP counselors across the country. These counselors provide personalized assistance to Medicare beneficiaries, spending an average of 35 minutes one-on-one with each individual.
OHIC director Rebecca Kinney explained that SHIP counselors help beneficiaries understand the differences between Medicare Advantage, Part D, Traditional Medicare, and Medigap or Medicare supplemental plans. They often call insurance providers directly on behalf of beneficiaries to clarify benefits or answer questions, assist with enrollment in Part D plans, help appeal denials of care, and support applications for special enrollment period exceptions.
Recognition of SHIP’s Unbiased Service
The value of SHIP’s unbiased guidance is so widely recognized that CMS included a specific requirement in an April 2023 rule directing third-party marketing organizations and insurance agents to inform beneficiaries about the option to “contact Medicare.gov, 1-800-MEDICARE, or your State Health Insurance Program to get information on all your options.”
This requirement was implemented due to concerns that some health insurance brokers were not always transparent about which plans they represent or about the potential ramifications of certain coverage choices. Many brokers receive financial incentives to direct beneficiaries toward specific plans based on higher commissions, while SHIP is described by CMS as a “neutral agency.”
SHIP’s Funding History and Structure
The SHIP program was established by the Omnibus Budget Reconciliation Act of 1990, which authorized CMS to fund states for creating and maintaining advisory service programs for Medicare beneficiaries. Due to high demand for these services, funding is often supplemented by contributions from states and community-based organizations.
This additional support is particularly important as approximately 10 million people age into Medicare every day, all needing assistance navigating the dozens of available options. For example, San Diego’s HICAP (the local SHIP program) receives 30% of its funding from the federal government and 70% from the state of California.
As the budget process moves forward, advocates hope that Congress will recognize the essential role SHIP plays in helping seniors make informed healthcare decisions and will preserve this critical program’s funding.
