If you are one of the roughly 12 million Americans who rely on both Medicare and Medicaid — a group called dual-eligible beneficiaries — the 2025 reconciliation law signed by President Trump on July 4, 2025 is not an abstract budget story. It is a policy change that could directly affect whether Medicaid continues to pay your Medicare Part B premiums, cover your nursing home stay, or pick up the deductibles and copays that Medicare leaves behind. Understanding what the Congressional Budget Office (CBO) is now projecting about Medicaid's future is the first step in protecting your own coverage.
The CBO serves as Congress's official budget scorekeeper — a nonpartisan agency that projects what federal programs will cost over the next decade. When the 2025 reconciliation law was being debated, CBO estimated it would reduce federal Medicaid spending by $911 billion over the 2025–2034 period, measured against the January 2025 baseline — the snapshot of what Medicaid was expected to cost under existing law before any changes were made. That is not a rounding error. Nine hundred eleven billion dollars represents a fundamental restructuring of one of the largest health programs in the country.
CBO's February 2026 projections — the most recent detailed baseline available — show how those cuts are expected to ripple through the system over time. By 2035, federal Medicaid spending is now projected to reach $941 billion, compared to the $1.03 trillion that was projected before the reconciliation law passed. That is an 8% reduction in a single year's spending. Across the entire 2025–2035 window, cumulative federal Medicaid spending is now projected to be $503 billion lower than what was expected under the January 2025 baseline. To put that in human terms: that is $503 billion less flowing into state Medicaid programs to pay for doctor visits, hospital stays, long-term care, and the Medicare cost-sharing assistance that millions of low-income seniors depend on every month.
Enrollment projections tell an equally striking story. CBO's latest figures show Medicaid enrollment is expected to be 13% lower by the end of the budget window compared to pre-law projections. That means millions of people who would have been covered under Medicaid's previous rules may no longer qualify — or may lose coverage through new administrative requirements built into the law, such as work reporting requirements and more frequent eligibility redeterminations. For seniors, the most direct concern is what happens to the roughly 12 million dual-eligible beneficiaries who use Medicaid to fill the gaps that Medicare does not cover. If states face reduced federal matching funds and tighter eligibility rules, some of those beneficiaries may find their Medicaid benefits reduced or eliminated.
It is important to understand why the 8% spending reduction and 13% enrollment drop actually understate the full effect of the reconciliation law. CBO notes that other economic and technical factors — things like rising healthcare costs, population aging, and updated economic assumptions — would have pushed Medicaid spending higher on their own. The fact that the new baseline is still lower despite those upward pressures means the law's cuts are even deeper in real terms than the headline percentages suggest. In other words, if the reconciliation law had never passed, Medicaid spending in 2035 would likely have been well above $1.03 trillion. The law did not just slow growth — it reversed a trajectory that was already climbing.
For Medicare Advantage enrollees specifically, the Medicaid cuts carry a particular concern. Many Medicare Advantage plans — especially Dual Eligible Special Needs Plans, known as D-SNPs — are specifically designed to coordinate benefits for people who have both Medicare and Medicaid. In 2025, there were more than 800 D-SNP contracts operating across the country, according to CMS.gov data, serving millions of beneficiaries who rely on these plans to integrate their Medicare and Medicaid benefits into a single, coordinated package. If state Medicaid programs reduce benefits or tighten eligibility in response to lower federal funding, the supplemental benefits that D-SNPs offer — things like dental, vision, transportation, and meal delivery — may be restructured or reduced in future plan years. D-SNP benefits are tied to what state Medicaid programs authorize, so federal cuts to Medicaid can cascade directly into what these plans are permitted to offer.
Data Snapshot: According to CMS.gov data, total Medicaid and CHIP enrollment stood at approximately 79 million individuals as of early 2025, before the reconciliation law's provisions began taking effect. CBO's February 2026 projections suggest that figure could fall significantly over the coming decade as new eligibility rules, work reporting requirements, and reduced federal matching rates take hold. The scale of that potential disenrollment — projected at 13% below pre-law estimates by the end of the budget window — would represent one of the largest coverage contractions in Medicaid's 60-year history.
If you are a low-income Medicare beneficiary who currently receives help from Medicaid, there are concrete steps you can take right now to protect yourself. First, find out exactly which Medicaid benefits you currently receive. These may include Medicare Savings Programs (MSPs), which pay your Part B premium of $185 per month in 2025 and may also cover your Part A and Part B deductibles and copays. There are four MSP levels — Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), Qualifying Individual (QI), and Qualified Disabled and Working Individuals (QDWI) — each with different income thresholds that vary by state. If you are not already enrolled in an MSP and your income is at or below roughly 135% of the federal poverty level, you may still qualify and should apply through your state Medicaid office immediately, before any new eligibility rules take effect.
Second, pay close attention to any mail you receive from your state Medicaid agency. Under the reconciliation law's new provisions, states are required to conduct more frequent eligibility redeterminations — meaning your Medicaid coverage could be reviewed and potentially terminated if you do not respond to paperwork requests or if your income or assets are reassessed under new criteria. During the COVID-19 pandemic unwinding period from 2023 to 2024, millions of people lost Medicaid coverage simply because they did not respond to renewal notices or had outdated contact information on file. The same risk exists now. Make sure your state Medicaid office has your current address, phone number, and email address.
Third, if you are enrolled in a D-SNP or any Medicare Advantage plan that coordinates with Medicaid, mark your calendar for the Annual Enrollment Period, which runs from October 15 through December 7 each year. During AEP, you can switch Medicare Advantage plans, return to Original Medicare, or add or change a Part D drug plan. If your D-SNP reduces its supplemental benefits in 2026 or 2027 in response to state Medicaid changes, AEP is your window to find a plan that better meets your needs. You can compare plans at Medicare.gov's Plan Finder tool, which is updated each fall with the following year's plan details, premiums, and benefit structures.
For beneficiaries who are not yet dual-eligible but are approaching the income thresholds, the reconciliation law's changes to Medicaid eligibility rules make it more important than ever to understand your state's specific rules. Medicaid is a joint federal-state program, and while the federal government sets minimum standards, states have significant flexibility in how they implement eligibility criteria, covered services, and provider payment rates. Some states may respond to reduced federal funding by cutting optional benefits like dental or vision coverage for adults, reducing provider payment rates that could affect access to care, or implementing new administrative requirements that make it harder to maintain enrollment. Your state Medicaid agency's website is the authoritative source for current eligibility rules and benefit changes in your state.
The broader Medicare Advantage market may also feel indirect effects from Medicaid restructuring. Insurance companies that operate both Medicare Advantage plans and Medicaid managed care plans — which includes most of the major national insurers — will be managing significant changes to their Medicaid business at the same time they are competing for Medicare Advantage enrollment. That dual pressure could influence plan design decisions, network configurations, and the generosity of supplemental benefits in Medicare Advantage plans more broadly, even for beneficiaries who are not dual-eligible. It is worth watching how plan offerings evolve during the 2026 and 2027 AEP cycles as the full effects of the reconciliation law become clearer.
If you need personalized help navigating these changes, your State Health Insurance Assistance Program — SHIP — offers free, unbiased counseling from trained volunteers who can help you understand your Medicare and Medicaid options, review your current coverage, and identify programs you may be eligible for. SHIP counselors are available in every state and can be reached through the SHIP National Technical Assistance Center at shiphelp.org or by calling 1-800-MEDICARE. This is not a sales call — SHIP counselors do not sell insurance and have no financial interest in what plan you choose. In a policy environment this complex and this consequential, that kind of independent guidance is genuinely valuable.