Medicare is a hot topic now that there’s a new administration in the White House and the Department of Government Efficiency (DOGE) is slashing government spending. Older people, especially those over 65, are concerned about what these cuts may mean to healthcare programs like Medicare.
In the months since Trump took office, he has signed a whirlwind of executive orders and proposed an ambitious agenda, including several key changes to Medicare — some of which have been walked back. Trump also outlined his plans for the next four years during his joint address to Congress in March, including investigating overspending, fraud and waste within the Medicare and Social Security programs.
Medicare is the primary health insurance for adults aged 65 and older. It also covers those with certain disabilities or illnesses, such as end-stage renal disease or Lou Gehrig’s disease. As of November 2024, just over 68 million people were enrolled in Medicare, including both Original Medicare and Medicare Advantage plans, according to the Centers for Medicare and Medicaid Services, at a cost of $839 billion in 2023. Trump's agenda couTrump'sctly impact Medicare, a significant source of income for most people over age 65.
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Although it's still early into his second term, Trump has made several notable changes to Medicare. (A separate story looks at what Trump has done with Social Security so far).
Trump taps Robert F. Kennedy, Jr. to head the HHS
President-elect Trump tapped Robert F. Kennedy Jr. to head the Department of Health and Human Services (HHS). The HHS has a nearly $2 trillion budget and oversees 13 separate agencies, including Medicare, Medicaid and the Affordable Care Act.
One of Kennedy's first major actions as the head of HHS included terminating about 10,000 full-time workers. The HHS also announced it would streamline operations by consolidating 28 divisions within HHS to 15 and create a new division to be called the Administration for a Healthy America, or AHA. The Centers for Medicare and Medicaid will decrease its workforce by approximately 300 employees.
Read: How RFK Jr. May Change Medicare and Your Retirement
Trump taps Dr. Mehmet Oz to lead the CMS
President Donald Trump's nominee to lead the Centers for Medicare & Medicaid Services (CMS), Dr. Mehmet Oz, said in his opening remarks before the Senate Finance Committee on Friday, March 14, "We have a generational opportunity to fix our healthcare system and help people stay healthy for longer. " However, Oz repeatedly dodged questions about whether he would oppose Medicaid cuts, as Democrats pressed him on potential Republican-led reductions to the state- and federally funded program.
Republicans, who have rallied behind Trump's health agency nominees, questioned Oz about his plans to eliminate fraud from the $1 trillion Medicare and Medicaid programs. At the same time, Democrats asked for clarity on whether he would support cutting Medicaid funding. Despite repeated questioning, Oz refused to commit to opposing cuts to Medicare or Medicaid.
Dr. Oz's nomination has been advanced to the full Senate for a vote. The Senate Finance Committee voted along party lines to send his nomination forward. However, Oz has already proposed a vision for Medicare that would increase private-sector involvement in the form of Medicare Advantage plans.
Read: Trump Picks Dr. Oz as Head of Medicare and Medicaid
Medicare and Medicaid employees
Robert F. Kennedy Jr, the head of Health and Human Services, said he would cut 10,000 jobs — in addition to 10,000 employees who took an earlier layoff package — drastically reducing the agency's size from about 82,000 to 62,000.
On March 27, the U.S. Department of Health and Human Services (HHS) announced a dramatic restructuring in accordance with President Trump's Executive Order. The restructuring will serve multiple goals without impacting critical services, per a recent press release by the HHS.
Reducing the workforce by 10,000 full-time employees is expected to save taxpayers $1.8 billion per year. According to the release, the restructuring will improve Americans’ experience with HHS by making the agency more responsive and efficient while ensuring that Medicare, Medicaid, and other essential health services remain intact.
“We aren't just reducing bureaucratic sprawl. We are realigning the organization with its core mission and our new priorities in reversing the chronic disease epidemic,” HHS Secretary Robert F. Kennedy, Jr. said. “This Department will do more — a lot more — at a lower cost to the taxpayer.”
The Administration cancels some payment trials
Aligning with Trump's efforts to reduce costs while maintaining the quality of care, the Center for Medicare and Medicaid Innovation (CMMI) has announced plans to cancel six payment trials by the end of 2025. The changes by the Trump Medicare innovation center are meant to change the way healthcare providers are paid, according to Axios. These programs include initiatives like Primary Care First, Making Care Primary and End-Stage Renal Disease Treatment Choices.
Read: President Trump's Stances on Social Security and Medicare
Trump pauses hospice industry oversight
The administration has put a hold on a federal program designed to increase oversight of hospice care, which receives over $25 billion annually from Medicare. This pause is meant to root out and eliminate fraud and waste and address fraudulent billing and improper patient enrollments. The program, initiated during the Biden administration, required noncompliant hospices to take corrective action or face expulsion from Medicare. The pause amounts to a win for the hospice industry, which said the Biden plan would penalize well-meaning operators without identifying underperforming ones.
Read: Hospice Is Often Misunderstood: What Is It, and Who Is It For?
OMB steps back funding freeze of Medicare grants and loans
On January 27, the Office of Management and Budget (OMB) issued a memo to temporarily pause the disbursement of federal grants and loans, including those for Medicare. However, before carrying through with the action, the OMB faced legal challenges and was blocked by federal judges. This led to confusion and concerns about potential impacts on Medicare funding. As of late February, a federal judge continued to block the OMB from freezing federal assistance, delivering another blow to the Trump administration's ongoing efforts to shrink federal spending.
Read: What a Federal Grants Pause Could Have Meant for Social Security and Medicare
Trump reverses Biden’s prescription drug price caps
The Trump administration has reversed some price cap negotiations on prescription drugs. Trump's reversal of Biden's policy is unlikely to immediately increase the cost of prescription drugs for Medicare and Medicaid recipients. However, whether the move will make it easier for drug companies to raise prices in the future is unclear. Some Medicare cost reduction programs were established under the Inflation Reduction Act (IRA) and can only be repealed by Congress. The IRA capped insulin copays at $35, for example.
Read: Trump Revokes Biden's Order to Lower Drug Prices for Medicare
The Administration gives DOGE the green light
In the early days of his administration, President Trump signed an executive order creating the Department of Government Efficiency (DOGE) and made Elon Musk a “special government employee.” So far, DOGE has taken charge of the Medicare enrollment system to modernize it and reduce costs after previous contractors failed to deliver results.
Earlier in March, Musk said he believes Medicare payment systems are where “the big money fraud is happening.” Under DOGE’s federal restructuring, many probationary employees were fired at the Centers for Medicare and Medicaid Services (CMS), which houses Medicare and Medicaid.
To date, U.S. District Judge John Bates declined to block DOGE from its work inside the Department of Labor, HHS and the Consumer Financial Protection Bureau, but has ordered more discovery into how DOGE has operated regarding access to sensitive data.
Read: What You Need to Know About Elon Musk's DOGE's Access to Medicare Systems
Republicans' new funding bill
The Senate approved a House-passed spending bill that would maintain current federal spending levels through September 30, and have ongoing implications for those who receive Medicaid and Medicare. The bill guarantees no disruptions in benefits. It also postpones scheduled reductions to the Medicaid Disproportionate Share Hospital program, allowing low-income hospital providers to continue receiving support and extended services, including telehealth, which was initially poised to end on March 31. The bill also maintains full funding for veterans and their health care services and benefits.
Read: On Medicare and Need Telehealth? You Have Three More Months to Use These Services
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