The legislation popularly known as the One Big Beautiful Bill Act that was signed into law this July trims more than $1 trillion from US health-related Federal government programs. The Medicaid program, which supplies health-care coverage for eligible low-income individuals, was hit with the deepest cuts, but the Act includes some meaningful cuts to Medicare as well.
David Lipschutz, codirector of the nonprofit Center for Medicare Advocacy, recently discussed with Bottom Line Personal five aspects of the Act that will affect many Medicare recipients…
No more Medicare benefits for certain lawfully present immigrants
Approximately 100,000 non-US citizens will lose access to Medicare due to the new rules—even if they’re in the US legally and even if they helped finance the Medicare system by paying payroll taxes for many years. Under the new rules, the only groups eligible for Medicare will be US citizens…lawful “permanent residents”—that is, green card holders…Cuban and Haitian entrants…and “COFA” migrants—individuals from certain Pacific Island groups that have special agreements with the US, such as the Federated States of Micronesia, the Marshall Islands and Palau. Effective immediately, immigrants who do not belong to any of these groups are no longer able to enroll in Medicare, and those already enrolled who don’t belong to these groups will be terminated from Medicare eligibility in or around January 2027. Immigrants who no longer qualify for Medicare under the new rules could speak with immigration attorneys to see if it’s feasible for them to obtain green cards—as noted above, green card holders will remain Medicare eligible. It will be more difficult for these people to get private insurance since there are similar limitations in this law on Medicaid eligibility, as well as eligibility for subsidies for marketplace plans through the Affordable Care Act. Many or most of these individuals likely will go uninsured
Lengthy delay in implementing upgrades to the Medicare Savings Program (MSPs)
MSPs help low-income Medicare recipients pay Medicare premiums and, in some cases, additional out-of-pocket Medicare costs. A previously enacted rule was slated to make it easier to sign up for these programs, but the new legislation delays the implementation of those expansions for at least nine years.
New restrictions on Medicare’s right to negotiate drug prices
For several years, the Medicare system has been allowed to negotiate the prices of certain expensive prescription drugs with pharmaceutical companies. Drugs that treat rare conditions typically were ineligible for that negotiation process, and the new legislation expands the range of negotiation-ineligible drugs. Example: Keytruda, a widely used cancer drug, will not be eligible for Medicare’s negotiation process in 2026. Result: The Medicare system likely will have to pay significantly higher prices for certain drugs…and Medicare patients who take the affected drugs will face higher co-pays.
Related: The maximum out-of-pocket costs Medicare Part D recipients face for covered drugs is capped at $2,000 in 2025, but that cap is climbing to $2,100 in 2026. This cap increase is not due to the One Big Beautiful Bill, but the combination of this cap increase and the Bill’s negotiation restrictions will result in somewhat higher out-of-pocket drug costs for many Medicare recipients.
Financial threat to hospitals
As noted above, Medicaid, not Medicare, faces the deepest cuts under the new legislation. For certain financially challenged hospitals, that loss of Medicaid dollars could lead to significant cutbacks or even outright closure. Some rural regions might lose the only hospital in the vicinity, forcing all patients in that area—including Medicare patients—to travel farther to obtain care. In emergency situations, longer travel times to hospitals can be deadly.
No national minimum-staffing requirements for nursing homes
Rules were passed in recent years that required US nursing homes to meet certain minimum staff-to-patient ratios. Those rules, which already faced substantial legal challenges, now have been delayed for the next nine years by the One Big Beautiful Bill Act. This is not specifically a Medicare change, but any change to nursing home rules inevitably affects many Medicare recipients. Some states have staffing ratio requirements of their own, but the lack of national minimum-staffing rules makes it even more important for people choosing nursing homes for themselves or their loved ones to vet those nursing homes very carefully. Helpful: The website Medicare.gov/care-compare offers useful details about nursing homes’ staffing ratios, among other important information.
