How does the "Big Beautiful Bill” affect Medicare

 

The "Big, Beautiful Bill," formally known as the One Big Beautiful Bill Act, is a reconciliation bill that makes major changes to tax laws, the Medicaid program, immigration enforcement funding, and much more, but it does not have a significant impact on Medicare.

The majority of Medicare recipients will not experience any changes. However, a significant exception applies to low-income individuals who qualify for the Medicare Savings Program (MSP) to help cover Medicare’s monthly and out-of-pocket costs, as well as individuals who qualify for both Medicare and Medicaid. 

Here are the four notable changes to Medicare in the bill. 

Dually Eligible individuals (Medicare and Medicaid): The bill reduces future funding for Medicaid.  Some individuals qualify for both Medicare and Medicaid if they are within the income and asset qualifications for NJ Aged, Blind, and Disabled (ABD) Medicaid.  During the annual recertification process, some individuals may become ineligible to continue receiving Medicaid, resulting in increased out-of-pocket healthcare costs.

Medicare Savings Programs (MSPs): The bill will make it harder for low-income Medicare enrollees to access MSPs, which help cover premiums and cost-sharing. If you rely on these programs, it's important to monitor any changes to eligibility or application processes.

Physician Payment Updates: The bill includes a 2.5% increase to the Medicare Physician Fee Schedule for calendar year 2026. This increase is a one-year adjustment and does not represent a permanent solution to the challenges of Medicare physician payment. 

Lawfully Present Immigrants and Medicare Eligibility: A provision in the bill would restrict Medicare eligibility for certain groups of lawfully present immigrants, even those who have worked and paid Medicare taxes for years. If you are a lawfully present non-citizen, it's critical to understand how these changes might affect your current or future Medicare eligibility.

The original House version of the bill had included changes to HSA contributions for people on Medicare Part A; however, that was not included in the final version. 

Summary

Overall, the bill has many changes to Americans, but Medicare was largely untouched.  If you have any questions, feel free to reach out to New Jersey Medicare Brokers.  2026 changes to your Medicare Advantage and Prescription Drug plans will be released in September.  We’ll also reach out then to obtain updated lists of your prescriptions and healthcare providers.