Medicare could face nearly $500 billion in cuts over the next decade under Republicans’ “One Big Beautiful Bill Act,” which also proposes significant reductions to Medicaid and other healthcare programs.
According to a May 20 report from the nonpartisan Congressional Budget Office, the legislation is projected to add $2.3 trillion to the national debt, triggering automatic budget cuts under federal law.
The CBO estimates that an average annual increase of $230 billion in the deficit will occur each year under the legislation, resulting in a need to reduce spending by that amount annually. The first round of sequestration could take place in 2026.
Medicare spending is limited to a 4% reduction each year, which would amount to $45 billion in cuts for fiscal year 2026. Although Medicare is capped at these 4% reductions, the rest of the federal budget would face even larger cuts. Some programs, such as Social Security and low-income assistance programs, are exempt from sequestration, leaving other federal programs to shoulder the remaining cuts.
The 4% rule on Medicare means the cuts to the program will grow each year, with the CBO projecting that reductions will total about $490 billion from 2027 to 2034.
President Trump and Republican lawmakers have repeatedly stated that they would not cut Social Security, Medicare, or Medicaid benefits.
According to the Washington Post, the Medicare cuts could be avoided if Congress instructs the White House to ignore the bill’s debt impact, pass legislation to reduce the deficit, or change other federal budget policies.
As of 11:15 a.m. EST, lawmakers were still debating the legislation in a House Rules Committee hearing that is expected to continue well into the day, according to Reuters. If the bill clears the committee, House Speaker Mike Johnson could bring it to a floor vote as early as May 21.
Should the package pass the House, it would move to the Senate, where Republicans hold a 53-47 majority. A Senate vote is not expected until next month, as Congress is set for a weeklong break beginning next week.
The legislation, advanced by the House Budget Committee in a narrow 17-16 vote on May 18, reflects key components of President Trump’s policy agenda — including the extension of tax cuts, increased border security measures and significant changes to Medicaid and food assistance programs.
The proposed changes include implementing Medicaid work requirements for childless adults aged 19 to 64, restricting states from using provider taxes to fund Medicaid, imposing penalties for covering unauthorized immigrants, shortening the ACA open enrollment period, and prohibiting the use of Medicaid and CHIP funds for gender transition procedures for minors.
