As many Americans were still sleeping Thursday morning, the House of Representatives passed a bill whose text they hadn’t read, Donald Trump’s so-called One Big Beautiful Bill Act. The bill’s sweeping cuts to Medicaid, contributing to 14 million fewer people having health coverage by 2034, have received wide coverage. Less well known, however, is the bill’s dire implications for Medicare recipients. If the House version of the bill becomes law, Medicare payments to medical providers would be slashed by more than $500 billion over the next 10 years. This would have serious implications for tens of millions of older adults and providers and may even cause hospitals to close.
Though the GOP bill doesn’t explicitly call for Medicare cuts, it would trigger them under the Statutory Pay-As-You-Go Act. Congress passed Stat PAYGO in 2010 to discourage policymakers from enacting tax cuts and spending that would increase federal deficits.
Shuttered facilities would threaten health care access for older adults and all community members alike.
Under Stat PAYGO, the Office of Management and Budget must keep “PAYGO scorecards” for five-year deficit impacts and 10-year deficit impacts. PAYGO stipulates that when any legislation is enacted, the average cost of the legislation for the next five years is entered into each year of the five-year scorecard and the average cost for the next 10 years is entered into each year of the 10-year scorecard. At the end of each session of Congress, if there is a cumulative deficit in that fiscal year on either scorecard, there is an automatic spending reduction (sequestration) to offset the larger of the two deficits. The Congressional Budget Office estimates that the House Republican bill, if enacted, would increase the deficit by $2.3 trillion over 10 years, and trigger sequestration.
Some types of funding, including many mandatory spending accounts like Social Security, are exempt from the automatic cuts, but Medicare provider payments are not. Though there is a 4% limit on Medicare cuts under sequestration, that still amounts to an estimated $45 billion in fiscal year 2026 and roughly $535 billion through 2034, according to the CBO. This would make financially stressed Medicare providers — including safety net hospitals and the more than 300 rural hospitals at immediate risk of closure — worse off than they already are. Shuttered facilities would threaten health care access for older adults and all community members alike.
In short, though Trump and House Republicans promised this bill would not touch Medicare, at the moment that promise is broken.
To make matters worse, because the $2.3 trillion deficit increase averages out to $230 billion a year, the cuts to Medicare would still leave $185 billion to be sequestered in fiscal year 2026. That money would have to come from all other nonexempt programs, including farm price supports, Social Services Block Grant funds and vocational rehabilitation programs, which support farmers, children, older people and people with disabilities. The CBO estimates, however, that the total funding for these other programs is only $120 billion in that year. The funding for these other programs would be completely zeroed out, causing severe hardship to the many Americans who are the beneficiaries of these programs. Congress has various ways of preventing the cuts to Medicare and other programs from triggering. Lawmakers could change the budget scorekeeping rules or tell OMB to disregard the bill’s impact on the debt. But any attempt to get around PAYGO inside of the Republican tax giveaway bill would violate the Congressional Budget Act and require 60 votes to waive in the Senate. While Congress may find the votes to solve the problem in subsequent legislation, passage of a solution would be subject to filibuster in the Senate. Opponents of the bill could threaten to withhold their votes from passing the solution unless the bill were repealed or changed. Of course, if this ruinous giveaway to the rich were never enacted in the first place, such a solution would be unnecessary. But Republicans are eager to gut lifesaving programs that millions of Americans rely on to give tax breaks to the ultra-wealthy. And if that includes Medicare, well so be it.
Alan L. Cohen
Alan Cohen is a senior fellow at the Center for American Progress. 
