Overview

• The federal budget law enacted in July adds work requirements and tighter eligibility rules for Medicaid enrollees beginning this year
• Implementation of new Medicare Savings Program regulations that would ease premiums and cost-sharing for low-income beneficiaries has been postponed
• Congressional Budget Office analysis shows the bill increases the deficit by $3.4 trillion over ten years, activating sequestration under the PAYGO Act If OMB’s forthcoming score matches the CBO’s, Medicare would incur an estimated $45 billion cut in fiscal 2026, with reductions capped at 4 percent annually
• Any sequestration beyond the 4 percent cap would fall on other direct spending items—including defense, education, housing and national parks—unless Congress enacts another PAYGO waiver