The One Big Beautiful Bill (OBBB) that was signed into law this summer is big; it’s complicated and hard to explain in a short article. But know this: Most of the changes don’t take effect until 2027, so there should be time to learn how it may affect you and figure out how those who need coverage can still get coverage.
Medicare is federal health insurance for those 65 and older and Medicaid is a joint state and federal program for those of all ages with limited income and resources. In Hawai‘i, Medicaid is known as QUEST. Know also that AARP is fighting to protect Medicare and fight harmful changes to Medicaid. Articles at aarp.org go into detail about the bill and what AARP is doing.
The bill has some impact on Medicare. It limits coverage to specific legal immigrant categories and drops coverage for those who don’t qualify. It weakens some aspects of Medicare drug price negotiations by expanding the orphan drug exemption, reducing the number of medications eligible for price negotiations. The bill could also trigger automatic Medicare spending cuts of up to 4% unless waived by Congress.
Republicans and Democrats are saying different things about the OBBB, which is likely increasing confusion about it.
Republicans say the new law will reduce Medicaid fraud and waste and Democrats say it creates unnecessary paperwork that will result in people losing coverage. Democrats also say it is a threat to rural hospitals and clinics.
The nonpartisan Congressional Budget Office estimates some 10 million people may lose their Medicaid coverage over the next 10 years. The bill is also estimated to cut roughly $911 billion from Medicaid through 2034.
The key phrase is “next 10 years.” The biggest changes don’t happen until 2027, after the 2026 mid-term elections.
States need to start planning for the changes and are awaiting guidance from the federal government. So, despite the passage of the bill, it’s still largely unknown what people need to do to keep their coverage. It is likely that different states will implement the changes in different ways, adding complication.
One good thing in the OBBB that AARP supported is a new $6,000 tax deduction taking effect in the 2025 tax year for those 65 and older whose modified adjusted gross income is less than $175,000. The details are complicated, so go to AARP’s website to find articles about it and you’ll hear more about it next year as tax season approaches.
AARP HAWAI‘I (nonprofit)
1001 Bishop St., Ste. 625, Honolulu, HI 96813
866-295-7282 | hiaarp@aarp.org | aarp.org/hi
facebook.com/aarphawaii
Leave a Reply