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Medicare and Medicaid Mark 60th Anniversary as Major Funding Cuts Loom

The Office of Management and Budget is preparing to trigger up to 4% annual Medicare sequester cuts beginning in fiscal 2026.

Overview

  • CMS has instructed states to begin enforcing Medicaid work requirements and stricter eligibility reviews ahead of next year’s funding reductions.
  • The One Big Beautiful Bill Act will slash $1 trillion from Medicaid over the next decade, the largest contraction in the program’s history.
  • Under PAYGO rules, projections show Medicare could face more than $45 billion in cuts in fiscal 2026, capped at 4% of its annual spending.
  • Analysts estimate the Medicaid reductions may strip coverage from nearly 12 million beneficiaries and lead to over 42,000 preventable deaths each year.
  • Growing bipartisan public support for both programs is driving lawmakers to explore PAYGO waivers and other relief measures in Congress.