As of the date of this CMA Alert, the federal government is shut down due, in part, to a debate surrounding extension of tax credits and subsidies for Affordable Care Act (ACA) plans. While Medicaid and Affordable Care Act (ACA) coverage for certain lawfully present immigrants is part of the conflict, termination of Medicare coverage for some of the same groups of people – pursuant to H.R. 1, the reconciliation bill called the “One Big Beautiful Bill” – continues to be overlooked. Additional impacts of H.R.1 on Medicare, including limitations on access to programs that help people pay Medicare coverage and further restrictions on Medicare’s ability to negotiate the prices of certain drugs deserve more attention.
Termination of Medicare Coverage for Certain Lawfully Present Immigrants Continues to be Overlooked
A recent article published by KFF Health News & PolitiFact HealthCheck titled “GOP Falsely Ties Shutdown to Democrats’ Alleged Drive To Give All Immigrants Health Care” by Maria Ramirez Uribe (Oct. 6, 2025) analyzes the current debate over health care behind the government shutdown. The article notes:
Democrats have refused to vote for Republicans’ resolution to extend the federal spending deadline, and their position does, in part, hinge on health care spending. Democrats want to extend covid pandemic-era Affordable Care Act subsidies that are set to expire at the end of the year and roll back Medicaid cuts in the tax and spending bill that Trump signed into law this summer.
The Democrats’ proposal wouldn’t give health care to immigrants who lack legal status; that population is already largely ineligible for federally funded health care. Instead, the proposal would restore access to certain health care programs for legally present immigrants who will lose access under the Republican law.
While the article notes that individuals who lack legal status cannot enroll in Medicaid or Medicare, and walks through impacts of H.R. 1 on Medicaid, the article does not mention that H.R. 1 also rescinded Medicare eligibility for groups of lawfully present immigrants.
As outlined recent CMA Alerts (July 24, 2025 here and Sept, 19, 2025 here), H.R.1 excludes an estimated 100,000 lawfully present immigrants from Medicare, regardless of how long they have worked and paid taxes with the promise of health care coverage upon retirement or disability. Affected individuals include refugees, asylum recipients, and human trafficking survivors. Key provisions of the law took effect on July 4, 2025, immediately restricting Medicare eligibility for new enrollees. Current beneficiaries subject to the new restrictions face termination from Medicare in early 2027.
H.R.1 Will Lead to Fewer People Enrolled in Medicare Savings Programs (MSPs)
A recent New York Times article titled “Millions of Poor Retirees Have Lost an Easier Path to Help With Medicare” by Mark Miller (Oct. 4, 2025) highlights a provision of HR1 impacting Medicare Savings Programs (MSPs), which can cover some Medicare premiums and costs for lower income beneficiaries. H.R. 1 prohibits the Secretary of Health & Human Services (HHS) from implementing (for 9 years) certain provisions of the final rule published by CMS on September 21, 2023 (88 Fed. Reg. 65230), which was aimed at making it easier for Medicare beneficiaries to enroll in and qualify for MSPs (“streamlining rule”). Miller notes in the article:
Nearly 5.8 million low-income older adults are eligible for the programs to help them pay Medicare costs but are not enrolled, according to the National Council on Aging. Suspension of the streamlining rule is expected to reduce federal Medicaid spending by $66 billion over 10 years because of lower enrollment, according to the Congressional Budget Office. But for poor seniors who don’t receive this help, it will mean greater hardship.
In addition, the article notes that HR1 does not roll back state initiatives to expand eligibility for MSPs:
But it could halt further M.S.P. streamlining and expansion at the state level. And broader reductions in Medicaid funding to states contained in the budget law could press states that have expanded their M.S.P.s to scale back, said Dr. Neuman of KFF. “It’s not at all clear that states will continue to provide these benefits if they are in a tighter fiscal vise because of the cutback in federal support.”
In an effort to address criticism of H.R.1, the White House posted an article titled “Myth v. Fact: The One Big Beautiful Bill” (June 29, 2025) which in several instances, presents facts that are indeed myths. After stating that “there will be no cuts to Medicaid” the article addresses Medicare:
MYTH: The One Big Beautiful Bill “cuts Medicare.”
FACT: Medicare has not been touched in this bill— absolutely nothing in the bill reduces spending on Medicare benefits. This legislation does not make a single cut to welfare programs—it safeguards and protects these programs for all eligible Americans.
It is difficult to see how terminating coverage for at least 100,000 lawfully present immigrants is not a direct reduction in spending on Medicare benefits. Further, while halting the streamlining rule for MSP programs will lead to a reduction of $66 billion in Medicaid spending, much of this will come out of the pockets of Medicare beneficiaries who would otherwise be enrolled in MSP programs. It is hard to see how this is not a “cut” to Medicare or a “welfare program” directly impacting Medicare beneficiaries.
Increased Costs for Medicare Prescription Drug Provision of H.R.1
As discussed in some of the CMA Alerts referenced above, the Inflation Reduction Act of 2022 (IRA) gave the Secretary of HHS authority to negotiate the prices for certain high-cost drugs for Medicare beneficiaries, with negotiated prices first effective in 2026. While the IRA restricted the Secretary’s ability to negotiate the costs of certain “orphan drugs” (medications developed to treat rare diseases), H.R. 1 expands such restrictions, meaning that both the Medicare program and Medicare beneficiaries will pay more for some of these drugs. The estimate of just how much has recently been revised upwards.
On October 20, 2025, the Congressional Budget Office (CBO) released a document titled “Revised Estimate of Changes Under the 2025 Reconciliation Act for Exemptions From Medicare Price Negotiations for Orphan Drugs” The summary notes that:
In CBO’s current assessment, the new law will affect price negotiations for several orphan drugs not originally included in the estimates of budgetary effects of section 71203 of the 2025 reconciliation act. After incorporating those drugs into its analysis, CBO now estimates that the 10-year cost of the section will be $8.8 billion.
Conclusion
In addition to the Medicaid cuts that will impact individuals dually eligible for Medicare and Medicaid, terminating lawfully present individuals from Medicare, halting changes that would make it easier to qualify for financial assistance, prohibiting implementation of a nurse-staffing rule that would have better protected nursing home residents, and further restricting the ability of the Medicare program to negotiate the costs of certain prescription drugs, H.R.1 undoubtedly constitutes a significant “cut” to Medicare. Don’t let anyone tell you otherwise
October 23, 2025 – D. Lipschutz