Nov. 17 Federal Update: Congress Reaches Funding Agreement, Resuming Critical Federal Operations 

On Nov. 12, President Trump signed funding legislation, ending a 43-day government shutdown that caused profound and ongoing harm to the social sector and the communities we serve.  

The legislation extends government funding through Jan. 30, including for Medicare telehealth flexibilities and family-to-family health information centers. The bill is also accompanied by three appropriations bills that fund military construction and the Department of Veterans Affairs, the Department of Agriculture and the Food and Drug Administration, and operations for the Legislative Branch through Sept. 30, the end of the fiscal year.  

Through funding negotiations, the Senate agreed to hold a vote to extend the Affordable Care Act’s enhanced premium subsidies, although the credit’s extension is not guaranteed. Millions of Americans are facing marked premium increases that threaten their ability to access essential care. 

Through the appropriations legislation, funding and benefits through the Supplemental Nutrition Assistance Program (SNAP) have resumed following critical delays. However, delays in vital grant and contract disbursements continue to be expected, exacerbating the immense financial strain the nonprofit sector is facing. The challenges reverberate across Head Start centers as organizations that failed to receive funding due to the shutdown face the potential of weeks-long delays in accessing funding.  

Funding Agreement Safeguards Essential Nutrition Programs 

The Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Fiscal Year 2026 Appropriations Bill was enacted Nov. 12, safeguarding funding for essential nutrition programs through Sept. 30. 

The bill authorizes, 

• $8.2 billion for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), a $603 million increase over fiscal year 2025. WIC serves more than 7 million women and infants nationwide, offering essential nutrition support that has reduced infant mortality, premature births, and low birth rates, while increasing access to prenatal care and supporting children’s cognitive development. 
• $460 million to fund the Commodity Supplemental Food Program (CSFP), a $35 million increase over fiscal year 2025. CSFP supports more than 700,000 low-income older Americans in accessing essential nutrients, offering essential health benefits while reducing food insecurity. 
• Full funding for mandatory nutrition programs for fiscal year 2026, including SNAP, the School Lunch Program, the School Breakfast Program, and Summer EBT, alongside funding for the multi-year SNAP contingency fund. 
• $1.715 billion for rental assistance, a $73 million increase over fiscal year 2025, to ensure Americans living in rural areas have access to safe and affordable housing 
• Continued funding for rural housing preservation provisions, such as the decoupling pilot program, multifamily housing technical assistance, and preservation financing 

The bill was passed alongside the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, which secures essential funding for veterans’ health care, benefits, and housing. For further information regarding the The Military Construction, Veterans Affairs (VA), and Related Agencies Appropriations bill’s provisions, the Senate Appropriations Committee published the following brief. 

President Trump Signs an Executive Order to Support Youth in Foster Care 

On Nov. 13, President Trump signed an executive order that aims to support educational success, occupational advancement, and financial literacy and self-sufficiency for individuals within and transitioning out of foster care. 

The order takes action to modernize state child-welfare information systems by expanding states’ use of technological solutions and improving the collection, publication, utility, and transparency of state-level child-welfare data. 

It also centers partnerships with agencies, academic institutions, and nonprofit entities to increase access to housing, education, employment, healthcare, and mentoring services for youth who are in or are transitioning out of the foster care system. 

Additionally, it orders the Department of Health and Human Services to“address State and local policies and practices that prohibit participation in federally-funded child-welfare programs by qualified individuals or organizations because of their religious beliefs or moral convictions.” 

CMS Announces Medicaid Pilot to Lower Prescription Drug Spending  

The Centers for Medicare & Medicaid Services (CMS) has designed a pilot program to lower prescription drug spending in Medicaid, improve health outcomes by increasing access to critical medications, and strengthen the Medicaid program overall. 

State Medicaid programs that choose to participate in the Generating Cost Reductions for U.S. (GENEROUS) Medicaid Model will be able to purchase drugs included in the pilot at prices aligned with those paid in select countries, increasing access to fairer, more competitive pricing.  

The model will launch in 2026. CMS will negotiate with participating manufacturers for lower prices, while states adopting the model are instructed to implement uniform, transparent coverage criteria to ensure predictable access across participating states. 

Sector Updates from the Judiciary 

Federal Court Pauses Colorado Law Requiring Social Media Warnings for Minors 

The U.S. District Court for the District of Colorado paused HB24-1136, a Colorado law that required social media companies to warn minors regarding the potential harms of their platforms. The law ordered companies to issue warnings that would appear every 30 minutes once youth spent at least an hour on a social network in a 24-hour period. The message would remind users of social media’s potential impact on their developing brains and potential impacts ontheir mental and physical health.  

U.S. District Court Judge William J. Martínez cited First Amendment concerns and noted the value of incentivizing, rather than compelling, social media companies to offer disclosures. 

CMS Announces Next Steps for Rural Health Transformation Program 

The Rural Health Transformation Program was created by H.R. 1 to strengthen sustainable access to health care across rural America, including through workforce development and innovative care models. 

Following the closure of the application period, the Centers for Medicare & Medicaid Services (CMS) will now review states’ submissions to ensure completeness and compliance. States meeting the requirements will receive baseline funding, or 50% of available program funds, distributed equally among approved states.  

The remaining funds will be distributed following a rigorous, data-driven merit review led by federal and non-federal rural health experts and overseen by senior federal review directors. The process will assess each state’s proposed initiatives and alignment with program goals. 

Awardees will be announced by Dec. 31, with funding distributed over five years beginning in federal fiscal year 2026. As states begin implementation, program officers from CMS’s Office of Rural Health Transformation will provide technical assistance and ongoing support to help states design, launch, and sustain initiatives that best serve their rural communities. 

Litigation on Our Radar 

Federal Court Upholds Nationwide Injunction of Executive Order DEI 

On Oct. 30, the U.S. District Court for the Northern District of Illinois denied the federal government’s motion to narrow and temporarily pause a preliminary injunction issued April 14. The injunction temporarily prevented the Department of Labor from enforcing a provision within the executive order, Ending Illegal Discrimination and Restoring Merit-Based Opportunity. As a result, DOL grantees and contractors will not have to certify that they do not operate programs that promote diversity, equity, and inclusion to receive federal funds. 

The court maintained that the injunction is needed to provide complete relief to the plaintiffs and to safeguard free speech and conduct rights enumerated through the First Amendment. 

Appeals Court Considers Legality of Preventing Planned Parenthood from Accessing Medicaid Funding 

Following the passage of H.R. 1, Planned Parenthood filed a lawsuit to prevent the enforcement of a provision preventing organizations that provide abortions and receive more than $800,000 a year in Medicaid reimbursements in 2023 from accessing Medicaid funding. 

On Nov. 12, the U.S. Court of Appeals for the First Circuit held arguments after temporarily pausing a lower court’s decision and allowing the law to take effect while litigation continues. The order reversed the verdict issued by the U.S. District Court for the District of Massachusetts, which prevented the rule from going into effect. The district court determined that the provision likely violates the Constitution by specifically excluding Planned Parenthood’s health centers due to their status as abortion providers.  

The Justice Department urged continued enforcement of the rule, noting that the Department of Health and Human Services does not intend to interpret the law to violate the First Amendment, although the guidance required to implement the provision remains pending. 

Recently, Planned Parenthood issued a report detailing the impact of lost Medicaid reimbursements and Title X funds, which led nearly 50 health centers to close since the beginning of 2025 due to insufficient funding. 

The report also arrives as seven states, including California, Colorado, Massachusetts, New Jersey, New Mexico, New York, and Washington, have directed state funds to compensate for lost federal Medicaid reimbursements. 

A Series of Lawsuits Are Filed Against OpenAI, Alleging Psychological Harm 

Seven lawsuits were filed in the California Superior Court against the creator of ChatGPT, OpenAI Inc. The litigation centers wrongful death, product liability, consumer protection, and negligence claims, maintaining that ChatGPT contributed to multiple suicides and psychological injuries by prematurely releasing its GPT-4o model. 

The plaintiffs argue OpenAI engineered GTP-4o to maximize user engagement through features, like memory, simulated empathy, and overly agreeable responses. The design led plaintiffs to become emotionally reliant on the technology, replacing human connection, increasing isolation, reinforcing delusions, fueling addiction, and increasing the risk of suicide. 

The date the lawsuits were filed coincided with OpenAI’s introduction of its “Teen Safety Blueprint”, to identify users younger than 18 and increase the accessibility of safety features.   

HHS Provides Federal Court with Workforce Reduction Data    

In response to a court order following litigation regarding mass reductions-in-force issued during the government shutdown, the US Department of Health and Human Services outlined affected agencies and affected employees. 

Approximately 1,760 employees received termination notices, although several were unintentional and resulted from data discrepancies and processing errors. The lawsuit and a provision within the recent continuing resolution have since paused the layoffs.  

The U.S. District Court for the Northern District of California’s verdict protects 807 employees across the Centers for Disease Control and Prevention (CDC), the Administration for Strategic Preparedness and Response, and the Substance Abuse and Mental Health Services Administration. The order does not extend to several employees within the CDC’s Immediate Office of the Director and the Health Resources and Services Administration’s Maternal & Child Health Bureau.