The recently passed Republican budget bill in the U.S. House of Representatives, dubbed the "One Big Beautiful Bill Act," is poised to significantly impact Medicare and Medicaid beneficiaries, particularly those with disabilities and injured workers, by dramatically shrinking the U.S. social safety net.

The nonpartisan Congressional Budget Office (CBO) estimates that this legislation, which narrowly passed the House by a vote of 215 to 214, will trigger approximately $500 billion in automatic Medicare cuts. This is due to the statutory Pay-As-You-Go ("PAYGO") Act, which mandates automatic cuts to offset any spending not otherwise accounted for. These cuts to Medicare are projected to amount to about $45 billion in 2026 and $490 billion between 2027 and 2034.

MEDICARE CUTS

The implications for Medicare beneficiaries, including older adults and people with disabilities, are severe. The potential $500 billion cut to Medicare could affect tens of millions of retired and disabled beneficiaries' access to healthcare. Experts warn that these cuts could lead to lower reimbursement rates for healthcare providers, potentially forcing them to limit services or stop accepting Medicare altogether, thereby reducing access to care. Furthermore, older adults and individuals with disabilities could face higher out-of-pocket costs for medical services and prescriptions. Critical benefits such as dental, vision, or hearing coverage could be scaled back or entirely eliminated for those enrolled in Medicare Advantage plans. These changes collectively threaten the quality, affordability, and availability of healthcare that millions of older Americans and people with disabilities rely on.

MEDICAID CUTS

Beyond Medicare, the Republican bill also proposes roughly $600 billion in cuts to Medicaid. Medicaid is a joint federal and state program crucial for helping cover medical costs for low-income individuals. The CBO estimates the bill cuts at least $715 billion from healthcare spending, primarily from Medicaid. This dual assault on Medicare and Medicaid is seen as a "betrayal" of promises made by some politicians, who had campaigned on protecting these programs.

IMPACTING WORKERS

The broader impact on the U.S. social safety net for American workers is concerning. The bill is also expected to cut $300 billion from the Supplemental Nutrition Assistance Program (SNAP), affecting over 2.7 million American households. Economist Robert Reich highlights that Americans making between approximately $17,000 and $51,000 annually will lose about $700 a year, while those with incomes under $17,000 could lose more than $1,000 yearly. In stark contrast, the wealthiest 0.1% of Americans stand to gain nearly $390,000 a year. This underscores a shift of wealth towards the very rich at the expense of programs that families and the middle class rely upon.

Key Takeaways from the Legislation:

Medicare Limitations:
- Automatic cuts of approximately $500 billion over the next decade.
- Potential for reduced access to healthcare due to lower provider reimbursement rates.
- Higher out-of-pocket costs for medical services and prescriptions for beneficiaries.
- Possible reduction or elimination of critical benefits like dental, vision, or hearing coverage for Medicare Advantage enrollees.
- Weakened efforts to combat Medicare fraud, waste, and abuse, potentially leading to faster growth in Medicare Part B premiums.
Medicaid Limitations:
- Proposed cuts of roughly $600 billion.
- Overall healthcare spending cuts of at least $715 billion, mainly from Medicaid.
Shrinking Social Safety Net:
- Additional cuts of $300 billion from the Supplemental Nutrition Assistance Program (SNAP).
- Disproportionate negative financial impact on lower and middle-income Americans.

ADDITIONAL RESOURCES:

What you need to share about the “one big beautiful” ugly horrible bill Robert Reich

Preliminary Analysis of the Distributional Effects of the One Big Beautiful Bill Act CBO

House Reconciliation Bill: Budget, Economic, and Distribution Effects Penn Wharton

Recommended Citation: Gelman, Jon, Stripping the US Safety Net (05/24/2025) https://workers-compensation.blogspot.com/2025/05/stripping-us-safety-net.html

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*Jon L. Gelman of Wayne, NJ, is the author of NJ Workers' Compensation Law (West-Thomson-Reuters) and co-author of the national treatise Modern Workers' Compensation Law (West-Thomson-Reuters). For over five decades, the Law Offices of Jon Gelman 1.973.696.7900
jon@gelmans.com has represented injured workers and their families who have suffered occupational illnesses and diseases.