Medicare Scare

Before taking control of Congress in January 2025, Republican lawmakers repeatedly promised not to cut Medicare, the public health insurance program covering 66 million elderly and disabled Americans (1). Then, in July, they passed the One Big Beautiful Bill Act (OBBBA), which does just that. The bill reduces basic services that benefit low-income people, while offering major tax cuts to wealthy individuals and corporations (2). Overall, the OBBBA eliminates $1 trillion from health care programs (Medicaid, Medicare Savings Programs for low-income recipients) and increases the deficit by $3-4 trillion (3).

Complex Medicare reductions will total $536 billion over nine years, beginning in 2026 (4). This figure represents the annual 4% maximum that Medicare can be cut by law: $45 billion in 2026, growing to $76 billion by 2034.

The basis for these cuts to Medicare is an obscure Congressional budget rule known as the Statutory Pay-As-You-Go (PAYGO) requirement, which states that any legislation increasing the federal deficit must be offset by spending reductions. Since the OBBBA swells the deficit, the PAYGO rule automatically triggers reductions across mostly mandatory federal programs, including Medicare. This is known as “sequestration.” However, the almost $1 trillion Pentagon budget is exempt, as are Social Security and the U.S. Postal Service (5).

The Office of Management and Budget, headed by Russell Vogt, determines how these cuts are enacted and what percentage is applied to programs subject to PAYGO. You may remember Russell Vogt as a key architect of Project 2025. However, Congress can waive this provision of the PAYGO law as they have done in 2013, 2017, 2021, and 2023 (6). But we are living in unprecedented times, so counting on social safety net legislation may be unrealistic.

Medicare cuts would apply to reimbursements to doctors, hospitals, Medicare Advantage programs, medical equipment companies, therapists, nursing homes, and other medical providers. With lower reimbursements for providers, some physicians may decide to stop accepting Medicare patients. Rural areas like ours already have a severe shortage of medical providers (7). Lower reimbursements would put financial strain on our local hospital (as the OBBBA cuts to Medicaid are already doing). Lawful immigrants who have asylum or refugee status will no longer receive Medicare even though they have worked legally in the U.S. and paid into the system.

These planned cuts to Medicare are part of the government’s effort to rip apart the safety net for disadvantaged Americans and can be reversed with Congressional action. Can we allow the ultra-rich to benefit from this bill while middle- and low-income individuals struggle to cover their health care costs?

NOTES

1. Isabella Murray, Arthur Jones II, Lauren Peller, and Allison Pecorin, “Johnson says no cuts to Social Security and Medicare to fund Trump’s agenda,” ABC News, January 7, 2025.
2. Joanna Green, “Cuts to Medicaid and Health Insurance Subsidies: Who Stands to Lose?” Engage Tuolumne, June 13, 2025.
3. D. Lipschutz and A. Bers, “Impact of the ‘Big Bill’ on Medicare,” Center for Medicare Advocacy, July 24, 2025. 
4. Fact Sheet, “Trump’s Big Ugly Law Triggers $536 Billion in Medicare Cuts,” House Committee on the Budget, August 15, 2025.
5. “PAYGO exemplifies the military’s deficit double standard: How ‘fiscal responsibility’ is killing us,” Security Policy Reform Institute, January 13, 2019.
6. Will Medicare Be Cut Under PAYGO? 2025-2026 Medicare Funding Explained,” MedicarePlanning, July 28, 2025.
7. Barbara Ficcara, “Physician Shortage in Rural Areas of the U.S. Worsened Since 2017,” University of Rochester Medical Center, November 24, 2025.