The New Budget Reconciliation Law Is a Bad Deal for All of Us as We Age

Chris Herman, MSW, LICSW
Senior Practice Associate–Aging

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July 2025

Introduction

The budget reconciliation act passed by Congressional Republicans on July 3 and signed into law by President Trump on July 4 (infamously known as the “One Big Beautiful Bill Act,” and hereafter referred to as “the law,” “the budget law,” or “the Republican budget law”) will harm all of us as we age. Eighty percent of households that include an adult 60 years or older—in other words, 47 million households—"are financially struggling today or are at risk of falling into economic insecurity as they age” (National Council on Aging [NCOA], 2024a, para. 5; Tavares et al., 2024, p. 6). The Republican budget law will exacerbate this economic insecurity and harm health in later life.

This Tips and Tools provides a brief overview of the federal budgeting process and outlines how the law decreases older adults’ access to Medicaid, the Health Insurance Marketplace, Medicare, long-term services and supports (LTSS), and the Supplemental Nutrition Assistance Program (SNAP)—disproportionately affecting immigrants and refugees—while weakening Social Security and other public programs. (Please refer to Boyer, 2025, for information regarding other effects of the budget law.)

Federal Budgeting Process

The federal budgeting process encompasses two components: mandatory and discretionary spending. Mandatory (or direct) budget expenditures include programs such as Medicaid, Medicare, SNAP, and Social Security. For these and other mandatory programs, the laws that authorize the existence, purposes, and rules of any given program mandate the program’s funding (Center on Budget and Policy Priorities [CBPP], 2024a, p. 2). In contrast, for programs funded through the discretionary budget process, “the authorizing law that sets up the program, agency, or activity does not itself determine the funding level, which is instead set in annual appropriations legislation” (CBPP, 2024a, p. 2). Discretionary programs include those authorized by the Older Americans Act, health care for veterans, and the Low Income Home Energy Assistance Program, or “LIHEAP” (CBPP, 2024b). Moreover, the discretionary budget covers operating expenses for federal agencies that administer Medicaid, Medicare, Social Security, and other mandatory spending programs (CPBB, 2024b). (Please refer to CBPP [2024a, 2024b] for more information on the federal budget process.)

The new Republican budget law establishes the federal government’s budget for mandatory spending in fiscal year (FY) 2025 (that is, October 1, 2024, through September 30, 2025) and sets budgetary levels for FY 2026 through 2034. The remainder of this publication describes the law’s impact on older adults. (Please refer to NASW’s Tips and Tools for Older Americans Month 2025 [https://bit.ly/NASW-OAM25] for information regarding the federal budget for discretionary programs. NASW continues to monitor the discretionary budgeting process and will update social workers at critical junctures.)

Decreased Access to Medicaid

Work Reporting Requirements

Of the 68 million people of all ages enrolled in Medicare, one-fifth are dually enrolled in Medicaid (Justice in Aging et al., 2025). Nearly 9.5 million Medicaid enrollees are 65 years or older, and 22 million are 50 years or older (Wolk & Burns, 2025). Fulfilling the budget law’s expanded work requirements for Medicaid enrollees (as outlined in KFF, 2025a) could be particularly difficult for the one in five Medicaid enrollees between the ages of 50 and 64 (McSpadden & Siegel, 2023). Many of these midlife enrollees live with disabilities or significant health conditions, care for family members, face age-related employment discrimination or other difficulties in finding work, or are already working in the care economy, particularly as home care workers (Choi-Allum, 2022; Copeland, 2025; Kean & Selassie, 2025; Machledt et al., 2025; PHI, 2021; Terrell, 2018). Although the law allows exemptions under certain circumstances, such exemptions can be difficult to secure.

Medicaid Expansion

The Republican law also limits the number of people 50 to 64 who can access Medicaid through expansion, a key provision of the Patient Protection and Affordable Care Act (ACA, 2010). As the independent health policy research organization KFF explains,

The Affordable Care Act expands Medicaid eligibility to non-elderly adults with incomes up to 138% FPL [federal poverty level] based on modified adjusted gross income and provides 90% federal financing for the expansion population. The Supreme Court effectively made expansion an option for states. The American Rescue Plan Act (ARPA) added a temporary financial incentive for states that newly adopt expansion. Currently, 41 states, including DC, have implemented the Medicaid expansion. (KFF, 2025a)

The new budget law ends the temporary incentive for states that newly adopt expansion (KFF, 2025a). As of June 2024 (the most recent data available), more than 20 million people were enrolled in Medicaid as a result of expansion (KFF, 2024b). More than 60 percent of those enrollees—almost 12.8 million—were between the ages of 50 to 64 (KFF, 2024b; Mathers et al., 2025). People in this age group who live in nonexpansion states will be less likely to qualify for Medicaid under the new law because their states will be less likely to expand Medicaid eligibility. Adults who do remain enrolled in Medicaid as a result of expansion will need to redetermine their eligibility every six months rather than every 12 months (KFF, 2025a). This additional burden could be a barrier to continued coverage.

Decreased Access to the ACA Marketplace

The Health Insurance Marketplace, another central provision of the ACA, has enabled millions of people between the ages of 50 and 64 to access affordable health coverage. The need for Marketplace coverage among this midlife age group will increase as their access to Medicaid decreases; yet, Marketplace plans will also be out of reach for nearly 5 million people in the 50–64 age group because the budget law fails to renew the enhanced ACA premium tax credits (PTCs) for people with low and middle incomes. Expiration of these enhanced PTCs, which had been enacted by the American Rescue Plan Act (2021) and extended by the Inflation Reduction Act (IRA, 2022) through December 31, 2025, will increase the average middle-income midlife adult’s premium by more than $4,000 in calendar year (CY) 2026 alone (Brown et al., 2025; Brown & Dean, 2025). (For additional information about the Republican budget law’s impact on the ACA, please visit this fact sheet developed by Congressional Democrats: Phase One of Trumpcare Is Here: Higher Costs, Worse Health Care [U.S. Senate Committee on Finance, 2025a].)

Decreased Access to Medicare

Medicare Savings Programs (MSPs)

The budget law decreases access to Medicare coverage and benefits for older adults and people with disabilities by prohibiting the U.S. Department of Health and Human Services (HHS) from implementing most of the Streamlining Medicare Savings Program (MSP) Eligibility and Enrollment rule (2023) until October 1, 2034 (Copeland, 2025), with the exception of provisions that have already taken effect, including auto-enrollment of certain SSI recipients into the Qualified Medicare Beneficiary (QMB) group. This delay will cause almost 1.4 million Medicare beneficiaries to lose access to MSPs (Swagel, 2025a), which enable people with low incomes to pay for Medicare coverage and use their benefits.

Extra Help for Prescription Drugs

Decreased MSP access will, in turn, reduce autoenrollment in the Medicare Part D Low Income Subsidy–Extra Help program (Copeland, 2025)—a program that currently reduces prescription drug costs by about $6,200 annually (Social Security Administration, 2025b). This combined loss of MSP and LIS will make Medicare unaffordable for many (Copeland, 2025) and, according to one study, could even increase mortality by 4 to 22 percent among affected beneficiaries (Roberts et al., 2025).

Prescription Drug Price Negotiation

Furthermore, the law decreases the federal government’s ability to negotiate prescription drug prices under the Medicare program (Families USA, 2025; KFF, 2025b)—an IRA–established provision, opposed by the pharmaceutical industry (e.g., Bers, 2025b). Given that the first round of prescription drug prices is estimated to save $1.5 billion for beneficiaries and $6 billion for the government in CY 2026 alone (HHS, 2024), a narrowing of the price negotiation program will increase prescription drug prices for beneficiaries over time.

Program Funding Reductions and Long-Term Impact

It is also worth noting that the law triggers sequestration (reduction) of about $500 billion to the Medicare program as a whole from federal fiscal year (FY) 2026 through FY 2034 (that is, October 1, 2026, through September 30, 2034), with a cut of $45 billion in FY 2026 alone (Carter, 2025; KFF, 2025b). This funding cut is triggered by the Statutory Pay‑As‑You‑Go Act (2010), which requires that the U.S. Office of Management and Budget eliminates any increases to the federal budget deficit resulting from new authorizing legislation by decreasing the federal budget through other means (Copeland, 2025; House Committee on the Budget, 2025; Swagel, 2025b). According to a recent Congressional Research Service report, “Generally, Medicare's benefit structure remains unchanged under a mandatory sequestration order and beneficiaries see few direct impacts. However, Medicare plans, providers, and suppliers see reductions in payments” (Rosso, 2023, para. 7).Yet, the nonprofit Center for Medicare Advocacy (CMA) and other beneficiary advocacy organizations with which NASW collaborates have agreed that sequestration “puts future Medicare funding at risk” (CMA et al., 2025, para. 1). On a broader scale, the Medicare Rights Center has asserted, the Republican budget law “paves the way for bigger Medicare rollbacks by ballooning the national debt. … Rising deficits would further jeopardize Medicare’s long-term outlook by creating a funding hole that lawmakers could use as an excuse to pursue future program cuts” (Copeland, 2025, para. 15). More specifically, the nonpartisan, nonprofit Committee for a Responsible Federal Budget (CRFB) estimates that the new budget law will accelerate Medicare insolvency by a year (from 2033 to 2032), resulting in cuts to the program (CRFB, 2025).

Decreased Access to LTSS

Home- and Community-Based Services (HCBS)

The decrease in federal Medicaid funds will likely prompt states to cut HCBS, which federal law does not require states to provide (Copeland, 2025; Schubel et al., 2025). An estimated 4.2 million (Chidambaram & Burns, 2023) to 11 million (Kim et al., 2022) use HCBS; estimates vary in accordance with how “HCBS” is defined. HCBS may include assistance with personal care services, skilled nursing care, social services, and other LTSS provided in a Medicaid enrollee’s home or in a participating assisted living or group home (Medicaid Payment Advisory Commission [MACPAC], 2024). Almost 700,000 people were on Medicaid HCBS waiting lists between 2016 and 2023 (Burns et al., 2023); these numbers will probably increase substantially as states struggle to prioritize limited Medicaid funds.

Nursing Homes

At the same time that HCBS access decreases, the Medicaid cuts will put 579 nursing homes at high risk for closure (Mor & Geng, 2025; U.S. Senate Committee on Finance, 2025b). Medicaid is the primary payer for 63 percent of nursing home care (KFF, 2024a), covering nearly 775,000 of the more than 1.2 million nursing home residents in the United States in 2024 (KFF, 2024c). Nursing home closures would leave some of these residents without access to affordable LTSS.

Moreover, some states could choose to decrease Medicaid reimbursement to nursing homes, which could prompt facilities to decrease staffing (Chidambaram et al., 2025). Medicare sequestration could have a similar effect on nursing home reimbursement and staffing patterns. These outcomes would exacerbate inadequate staffing resulting from another provision of the Republican budget law: The law prohibits HHS from implementing, before October 2034, a federal rule (Nursing Home Minimum Staffing, 2024) that set minimum staffing requirements for certified nurse aides, licensed practical nurses, and registered nurses who provide care directly to residents of Medicaid-funded nursing facilities and Medicare-funded skilled nursing facilities (National Consumer Voice for Quality Long-Term Care et al., 2025). The staffing standards in this rule were modest in relation to what NASW and other resident and workforce advocates had sought (e.g., Bedney, 2023; Edelman, 2023; Smetanka, 2022). Yet, this rule had been estimated to save the lives of 13,000 residents over a decade, according to “a review of the literature and used estimates of the relationship between total nurse staffing hours per resident per day (HPRD) and mortality from published research” (Werner & Coe, 2024, p. 1).

Decreased Access to SNAP

About seven million older adults (one in 11 people 60 years or older) lacked access to sufficient amounts of healthy food in 2022 (NCOA, 2024b; U.S. Department of Agriculture [USDA], as cited in Feeding America, n.d.). The share of SNAP participants belonging to this age group grew from about 11 percent in 2016 to 18 percent in 2022 (Dean & Figueiredo). Of the households participating in SNAP in 2022, half—that is, approximately 10 million—included a person 50 years or older (Dean & Figueiredo, 2024). Consequently, the cuts to SNAP enacted by the Republican budget law will have significant impacts on midlife and older adults. On an individual level, people ages 55 through 64 will be required to work for 20 hours per week to maintain SNAP eligibility; otherwise, they will be eligible for only three months of benefits every three years, as is already the case for most adults younger than 55 (CBPP, 2025). The nonpartisan Congressional Budget Office (as cited in CBPP, 2025, para. 13) has estimated that almost 1 million SNAP participants in the 55 through 64 age group will lose their benefits in a typical month as a result of the work requirements. On a programmatic level, most states will be responsible for funding 5 to 15 percent of SNAP, which had previously been funded entirely by the federal government (Bergh, 2025). This cost shift will affect states dramatically:

If a state cannot fully pay its required share, it would have two main options: significantly reduce the number of people receiving food assistance to the point where the state can afford its required share of benefits for the remaining households, or terminate the state’s SNAP program entirely [emphasis in original]. (Bergh, 2025, para. 2)

Weakening of Social Security and Other Public Programs

Short-Term Tax Deductions for Some Older Adults

A July 3 blog posted by the Social Security Administration (SSA) claimed, erroneously, that the Republicans’ budget law “ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits” (SSA, 2025b, para. 2). Similarly, in an email sent to its 71 million “My Social Security” account holders, SSA stated that the legislation “eliminates federal income taxes on Social Security benefits for most beneficiaries”; the email also stated that the law provides “an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they have earned” (SSA, as cited in Peck, 2025b, paras. 4 & 5).

In actuality, the law provides significant but temporary tax deductions of varying amounts for some people 65 and older with incomes of less than $175,000 (individual) or $250,000 (couple) (Peck, 2025a). This deduction—which does not constitute an increase in Social Security benefits or a tax refund but, rather, a decrease in the amount of annual income on which older adults are taxed (Konish, 2025)—will last only through CY 2028. Moreover, 64 percent of older adults don't pay taxes (Peck, 2025a), primarily because their incomes fall below $25,000 (individual) or $32,000 (couple) (Van de Water, 2025). This tax deduction will not help them, nor will it help Social Security beneficiaries who are younger than 65.

Long-Term Damage to Social Security and Other Public Programs

Furthermore, although the deduction will help some older adults in the short term, the Republican budget law as a whole will decrease the long-term financial stability of Social Security and other public programs. USAging, which represents Area Agencies on Aging and with which NASW collaborates closely, has stated:

Because the measure [law] doesn’t pay for itself and therefore increases our national debt, it compromises the ability of a future Congress to ensure the long-term viability of programs like Social Security, Medicare and Older Americans Act, because it lowers revenues just as the number of older Americans reaches new historic heights. (Markwood, para. 3)

CRFB explains the specific impact of the law on Social Security and Medicare in this manner:

We estimate that the extension and expansion of the 2017 tax cuts, the expanded senior deduction, and other OBBBA changes would reduce total taxation of benefits by roughly $30 billion per year. This would be enough to accelerate insolvency of the Social Security Old-Age and Survivors (OASI) trust fund from early 2033 to late 2032 and to accelerate insolvency of the HI [Medicare Hospital Insurance] trust fund from late 2033 to mid-2032.

Upon insolvency in 2032, we estimate that Social Security beneficiaries would face an across-the-board benefit cut of around 24 percent – even deeper than the cuts scheduled under current law. HI payments, meanwhile, would be cut by 11 percent. (CRFB, 2025, paras. 7–9; emphasis in original)

Disproportionate Impact on Older Immigrants and Refugees

The Republican law is particularly harmful to older immigrants and refugees, many of whom have “lawfully present” status in the United States. (Please refer to American Immigration Council, 2024, for an overview of the U.S. immigration system, including family-based immigration, employment-based immigration, refugees and asylees, and forms of humanitarian relief that permit temporary entrance or residency without visas.) Undocumented immigrants are already ineligible for Medicaid, Medicare, subsidized Health Insurance Marketplace coverage (PTCs), and SNAP (Altman et al., 2025). As the National Immigration Law Center (NILC, as published in Altman et al., 2025, p. 6) has explained, the new budget law “renders U.S. laws even more cruel and regressive” by restricting eligibility for these benefits to the following groups of immigrants:

• lawful permanent residents, or “LPRs”—that is, people with green cards
• certain immigrants from Cuba and Haiti who are classified as “Cuban–Haitian Entrants” (CHEs; please refer to U.S. Citizenship and Immigration Services, 2024, for information regarding CHE qualifications)
• people residing in the United States under a Compact of Free Association (COFA) with the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau, also known as “COFA migrants” (please refer to Lum, 2024, for information about COFAs)

These restrictions also apply to the Children’s Health Insurance Program (CHIP), worsening health across the lifespan and exacerbating disparities in later life.

Immigrants residing lawfully in the United States who will lose Medicaid, Medicare, CHIP, and subsidized Marketplace coverage include—but are not limited to—refugees and asylees; people who have experienced trafficking or domestic violence; people with Temporary Protected Status (TPS); and people under the Deferred Action for Childhood Arrivals (DACA) program (Altman et al., Bers, 2025a). Additional details regarding restrictions on health coverage for lawfully present immigrants follow.

Medicaid

Eligibility changes for Medicaid (and CHIP) will take effect on October 1, 2026 (Altman et al., 2025; Association of State and Territorial Health Officials, 2025), just before the midterm elections. Please refer to Artiga et al., 2025, for the full list of “qualified non-citizens” who currently qualify for Medicaid and CHIP.

Moreover, the federal government will limit funds to states for Emergency Medicaid, a program that “reimburses hospitals for the costs of emergency care provided to immigrants who would qualify for Medicaid except for their immigration status, [and] which hospitals are required to provide under federal law” (KFF, 2025a, “FMAP for Emergency Medicaid” section). This latter change also becomes effective on October 1, 2026 (federal FY 2027) (KFF, 2025a).

Medicare

The budget law restricts Medicare eligibility for new enrollees born outside the United States immediately. Current Medicare beneficiaries who do not meet the new requirements will lose their Medicare coverage within 18 months of the law’s July 4 enactment—that is, by early January 2027 (Altman et al., 2025), coinciding with the start of the new Congress. (Please refer to Kean & Huyenh-Cho, 2024, for current Medicare eligibility requirements for immigrants.)

The limitations on immigrants’ access to Medicare eligibility is, as the Medicare Rights Center put it, “a dangerous precedent and a significant departure from current, longstanding policy, which recognizes eligibility for everyone who has paid sufficient Social Security and Medicare taxes” (Carter, 2025, para. 14). Similarly, Justice in Aging and NILC expressed: “This reconciliation bill sends a chilling message to all Americans: Congress is willing to take Medicare from people who pay into the program” (Kean & D’Avanzo, 2025, para. 6).

ACA Marketplace Subsidies

Eligibility changes for Marketplace PTCs will take effect on January 1, 2027 (Altman et al., 2025). Please refer to CMS, n.d., for information about current eligibility requirements for these subsidies.

In addition to restricting the groups that can access PTCs, the Republican law “eliminates Marketplace eligibility for all lawfully present immigrants with incomes under 100% of the federal poverty level” (Pillai & Artiga, 2025b, para. 9). In other words:

Currently, individuals who would otherwise be eligible for Medicaid (but are not because of their immigration status) are treated as if their income qualifies them for premium tax credits, extending an affordable coverage option to low-income, lawfully present immigrants. The final legislation eliminates this special rule—stripping very low-income lawfully present immigrants of coverage options—beginning in 2026. (Keith, 2025)

This provision will become effective on January 1, 2026 (Altman et al., 2025). NILC has clarified: “Lawfully present immigrants earning at least 100% of the federal poverty level may still enroll in unsubsidized coverage on the ACA health insurance marketplaces” (Altman et al., 2025).

SNAP

Changes to SNAP eligibility take effect immediately (Altman et al., 2025). However, according to the national nonprofit Global Refuge, “Federal regulations [7 C.F.R. pt. 272.1(g)(1)(iii)] allow up to four months for states to implement SNAP eligibility changes and that ‘non-income eligibility factors shall be deferred until the household’s scheduled recertification’” (Global Refuge, 2025, para. 10). (Please refer to USDA, 2025, for information about current eligibility requirements for SNAP.)

Social Work Role with Older Adults

As social workers, we can respond to the budget cuts described in this publication in multiple ways:

• Educate persons served and our colleagues about how budget cuts will affect older adults’ access to pertinent health and social programs.
• Screen older adults and care partners for challenges resulting from the implementation of the budget reconciliation law.
• Provide support and resources to persons served who encounter hardships as a result of budget cuts.
• Collaborate with colleagues within and beyond our organizations to find or develop creative alternatives for necessary resources.
• Keep abreast of additional federal changes.
• Educate local, state, and federal policymakers about the impact of the budget on the individuals, families, and communities we serve.
• Participate in grassroots advocacy efforts.

Conclusion

This publication does not address the comprehensive impact of the Republican budget law on older adults. (For example, please refer to Justice in Aging [2025] for a detailed analysis of the Republican budget reconciliation law’s Medicaid and Medicare provisions that impact older adults.) Nonetheless, it is clear that the legislation’s short-term and long-term effects will be devastating to all of us as we age. The law shrinks access to Medicaid, ACA Marketplace coverage, Medicare, LTSS, and SNAP for older adults—especially immigrants and refugees—and redirects those funds to tax breaks for people with high incomes and corporations. These changes will destabilize Medicaid, Medicare, Social Security, and other public programs.

Throughout the federal budgeting process, our profession has advocated ardently for the individuals, families, and communities we serve. That advocacy will not cease.