The Medicaid Cut Ripple Effect- an Inside Baseball view!
What Seniors Need to Know About Medicare Stability
When Congress passed the “One Big Beautiful Bill Act” in 2025, most headlines focused on nearly $1 trillion in projected Medicaid reductions over the next decade.
Many Medicare beneficiaries had the same reaction: “That doesn’t affect me. I have Medicare.”
That assumption deserves a second look and could be wrong!
Medicaid and Medicare are deeply intertwined. When Medicaid funding shifts, the effects ripple outward, touching provider networks, out-of-pocket costs, Medicare Advantage plan stability, and rural healthcare access.
For seniors, those ripple effects could be visible and painful.
How Medicaid and Medicare Intersect
Before examining the changes, it’s important to understand where the two programs overlap.
1. Dual-Eligible Beneficiaries
Roughly 12 million Americans qualify for both Medicare and Medicaid. These individuals are known as dual-eligibles. These "dual-eligibles" are low-income seniors and younger people with disabilities. For them, Medicaid isn't a backup, it's essential.
For them, Medicaid pays for:
Medicare Part A/B premiums
Deductibles and coinsurance
Long-term care services
Dental, vision, and hearing benefits
Services Medicare does not cover (long-term care, dental, vision, hearing, eyeglasses, utilities, and cell phones)
In Maine, with our older population and rural poverty levels, dual-eligible beneficiaries are a meaningful part of the healthcare system. From what I have been able to pull for numbers, approximately 380,00 people in Maine have Medicare. As of 2023, approximately 19% of all Medicare recipients in the US are dual eligible and Maine had a much higher percentage. Maine’s percentage of the total population has 30% on MaineCare, with a lot of kids in that number. So, let’s approximate the percentage of dual-eligibles at 25% or 95,000 people potentially at-risk!
If Medicaid eligibility shrinks, the consequences for this group are immediate and financial.
2. Medicare Savings Programs (MSPs)
Even seniors who do not qualify for full Medicaid may qualify for a Medicare Savings Program. These are essentially different levels of Medicaid, with each paying for certain pre-determined benefit coordination.
These programs help pay:
Part B premiums
Sometimes deductibles and cost-sharing/co-pays/co-insurance
In 2026, the Part B premium is over $200 per month. Losing MSP eligibility can mean an unexpected $2,400+ annual expense, plus unpredictable potential co-pays and co-insurance amounts.
Administrative tightening and enrollment hurdles could reduce participation in these programs, even among those who remain eligible.
3. Provider Funding
Medicaid is a major revenue source for hospitals, nursing homes, and home health agencies.
When Medicaid reimbursements decline:
Hospitals negotiate harder with insurers
Provider networks narrow
Rural facilities face more closure risks
Access to care becomes more fragile
Healthcare funding does not disappear. It shifts.
What the 2025 Law Changed
The "One Big Beautiful Bill Act" (OBBBA) made several fundamental changes to Medicaid. Here's what's coming:
Work requirements for certain Medicaid populations: able adults aged 19-64 will be required to work, volunteer, or participate in other qualifying activities for 80 hours a month. The Congressional Budget Office (CBO) estimates this alone will cause 5.3 million people to lose Medicaid coverage by 2034.
More frequent eligibility verification- States must now verify eligibility quarterly and require reapplication every six months. The administrative burden is expected to cause many people to lose their coverage even when eligible. An estimated 1.4 million dual-eligible beneficiaries could lose their Medicaid coverage entirely
Reduced federal matching rates to states, which is projected to increase Medicaid costs an extra 8.5%.
Blocked enrollment simplifications for MSP programs. A Biden-era rule aimed at streamlining enrollment in Medicare Savings Programs was blocked from implementation. The CBO estimates this will result in 1.38 million fewer beneficiaries receiving MSP assistance by 2034.
While Medicare itself is not eliminated, the surrounding support infrastructure may weaken.
The Ripple Effects for Medicare
1. Dual-Eligibles Face Coverage Disruption
If a dual-eligible beneficiary loses Medicaid:
They may lose eligibility for their Dual-Eligible Special Needs Plan (D-SNP) which is specifically designed with for people with cost-sharing help.
They become responsible for full Part B premiums. ($2,400 anually)
They lose wraparound benefits like dental, long-term care, transportation, and utility assistance.
For a low-income senior on fixed income, that shift is substantial. Many simply can’t afford it!
2. Medicare Advantage Plans Face Added Pressure
Medicare Advantage plans are already navigating:
Modest CMS payment growth MORE ABOUT THIS HERE!
Risk adjustment reforms
Rising medical costs
When Medicaid cuts reduce provider revenue, hospitals and physician groups push harder in contract negotiations, or may just cut participation entirely!
In rural states like Maine, that pressure can accelerate:
Network exits
Benefit reductions, like Flex and OTC cards!
County-level plan withdrawals
If a major hospital leaves a plan network in a county, many plans may no longer be a viable solution for many beneficiaries.
3. Rural Healthcare Access Becomes More Fragile
This is where Maine stands out.
Rural hospitals often operate on thin margins. Many providers serve a high share of Medicaid patients.
If funding declines:
Critical access hospitals face higher risk of having to close their doors.
Home health agencies may shrink service areas, a huge inconvenience for those that are home bound.
Travel distances for care increase to ‘a hard to justify’ level.
Even seniors with stable Medicare coverage can feel these access changes.
4. The PAYGO Sequester Risk
Because the current legislation/administration increased projected federal deficits, automatic spending reductions under PAYGO rules could be triggered. The pay-as-you-go rule, also known as PAYGO, is designed to encourage Congress to offset the cost of any legislation that increases spending on entitlement programs or reduces revenues so congress cannot expand the deficit. Under PAYGO, Congress must pay for such legislation by reducing other entitlement spending or increasing other revenues.
If triggered, Medicare would face a 4% cut (this was previously negotiated) to specified program spending, or roughly $45 billion in FY2026 alone . The CBO projects total Medicare reductions of $491 billion between 2027 and 2034 if the sequester proceeds.
Historically, Congress has stepped in. But that intervention is political, not automatic.
What Maine Seniors Should Do Now🌲
This is not a moment for alarm.
It is a moment for awareness.
If You Are Dual-Eligible
Confirm your MaineCare status.
Watch eligibility notices carefully. Even though it’s not a bill, make sure you read it!
Understand your Special Enrollment Period rights or have an agent advocate!
If You Have a Medicare Advantage Plan
Review your Annual Notice of Change, which comes out in Sep/Oct each year, and explains changes in your current plan.
Confirm your doctors remain in-network, either on-line or with an agent.
Monitor plan stability in your county- Is your plan pulling back nationally, that could signal future changes in Maine.
If You Live in Rural Maine
Stay aware of local hospital news
Consider network breadth when choosing plans, like a PPO, or Med Sup.
Factor travel access and costs into your plan decisions.
If Cost Is a Concern
Re-checking Medicare Savings Program eligibility often, knowing the new application hurdles.
Explore Extra Help for Part D, a low income subsidy program from Social Security that helps with RX coverage.
Compare plans annually because formularies and benefits change. Don't auto-enroll in the same plan every year without comparing the options.
The Bottom Line
Medicare is not disappearing.
But Medicaid reductions can destabilize parts of the healthcare ecosystem that Medicare beneficiaries rely on.
For (Maine) seniors, the risks are not theoretical:
Dual-eligible beneficiaries could lose coverage or critical financial assistance.
Narrower Medicare Advantage networks as providers face financial pressure.
Rural healthcare access could deteriorate further.
Potential downstream Medicare payment adjustments.
Healthcare is a connected system. When one funding pillar shifts, the structure adjusts.
The key is preparation, not panic.
If you’re unsure how these changes might affect your coverage or your county, a proactive review now is far easier than reacting after a disruption.
Worried about how these changes might affect your specific situation? Let's talk it through.
📞 Call/text me at 508-277-8788 for a no-pressure conversation about your coverage options.
📧 Email: jonfitch64@gmail.com
Serving seniors in Kennebunk, Kennebunkport, Arundel, Biddeford, Saco, Old Orchard Beach, Scarborough, Berwick, North Berwick, Wells, Ogunquit, York, Kittery, and all of York County. Plus the rest of Maine aand 11 other states.
FAQ: Medicaid Cuts and Medicare
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Medicare itself is safe, so you won’t lose it. Some ricks are direct, some are indirect like: potential network changes in Medicare Advantage, possible loss of MSP assistance, continuance of extra benefits in plans, and broader access issues if rural providers struggle.
So how much it may directly effect you depends ion your other coverage.
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Someone who qualifies for both Medicare and Medicaid. Medicaid helps with Medicare premiums, cost-sharing, and services Medicare doesn't cover . About 12 million Americans are dual-eligible.
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You would lose eligibility for your D-SNP. However, you would qualify for a Special Enrollment Period to choose a different Medicare Advantage plan or return to Original Medicare.
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Federal funding for Maine's Medicaid program is being reduced under the new law. Maine will have to decide how to respond—through eligibility changes, provider rate cuts, or benefit reductions.
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Healthcare is a system. When parts of the system are stressed—hospitals lose funding, providers close, networks narrow—everyone feels it eventually. Staying informed helps you make better decisions before problems affect you directly.
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Yes and No.
Yes, your not in the same position as a person with a Medicare Advantage plan, and certainly a DSNP plan.
BUT:
Any changes to the system, can result in unexpected changes. Part B premiums, and deductibles could get jacked up.
Or, more people get Medicare Supplements through a Guaranteed Issue right when a plan is discontinued. Now the pool of people with your plan is diluted by people with more issues/costs, so your premium skyrockets. It can happen!
See how they are connected.
*Note: This information reflects current law and projections as of February 2026. Legislative changes, regulatory adjustments, and state-level decisions could alter these outcomes. We recommend personalized verification of your specific coverage and options.*
