Trump Just Warned The Iran War Will Cost You Your Medicare

At a White House Easter lunch on Wednesday, President Trump told attendees that the federal government can't pay for programs like Medicare and Medicaid while fighting the war with Iran.

"It's not possible for us to take care of daycare, Medicaid, Medicare, all these individual things," he said. "They can do it on a state basis. You can't do it on a federal. We have to take care of one thing: military protection. We have to guard the county."

Trump's remarks, as well as his past actions toward Medicare, should be concerning for anyone on or soon to be on Medicare, since they may significantly impact your retirement plan.

How the One Big Beautiful Bill Act affected Medicare

This isn't the first time that the Trump administration has cut funding to Medicare. According to Medicare Advocacy, when Trump signed H.R. 1, the One Big Beautiful Bill Act (OBBA), into law on July 4, 2025, the bill cut over $1 trillion from health programs. It was the largest rollback of federal health care support in history.

The OBBA cuts to Medicare

The OBBA reduces tax rates and temporary deductions for Americans age 65 and older. It speeds up the timeline for when the Medicare Hospital Insurance Trust Fund will become insolvent by 12 years. That fund pays for expenses like skilled nursing, inpatient hospital services, and hospice care. According to the Congressional Budget Office, that fund could be insolvent, and full Medicare Part A payments for providers might end by 2040, unless Congress takes action.

The CMS moratorium and its impact on Medicare access

Provisions in the OBBA also imposed a moratorium on the Medicare Savings Program and Medicaid Eligibility and Enrollment rules. Both rules were designed to help streamline the process of enrolling for Medicaid, particularly among older adults and people with disabilities.

A Congressional Budget Office analysis found that delaying the implementation of these rules could mean that 1.3 million fewer Medicare beneficiaries would have Medicaid coverage in 2034. A KFF analysis determined that if someone with an income of $967 per month lost those Medicaid benefits, they would have to pay $185 per month in Medicare premiums before accounting for other out-of-pocket costs.

The $500 billion in Medicare spending reductions

The Congressional Budget Office also confirmed that the OBBA will trigger $536 billion in Medicare cuts. Under PAYGO budget rules, which specify that new legislation cannot increase the federal budget deficit unless other legislation offsets that deficit, the OBBA will cut about $45 billion from Medicare in 2026. By 2034, that cut will grow to $76 billion, and from 2026 through 2034, the cuts will total $536 billion.

New Medicaid eligibility requirements

The OBBA also adds new eligibility requirements to reduce the number of people enrolled in Medicaid. Some adults will need to meet work or training requirements to be able to keep their coverage. States are also required to verify Medicaid eligibility more frequently, and those increased verification requirements can cause even those who are eligible for the program to lose their coverage.

Republicans are considering additional federal health care cuts

While the OBBA has had sweeping impacts on Medicare, Republicans are considering additional changes in an effort to pay for a budget bill that includes $200 billion in funding for the Iran war and immigration enforcement. Among ideas like targeting implementing cost-sharing reductions that would lower the subsidies that some ACA participants receive and increasing their out-of-pocket costs, the Republicans have identified two potential changes to Medicare.

Potential site-neutral payments for Medicare

Republicans are considering a site-neutral payment change, which would equalize Medicare payments for services regardless of whether Medicare enrollees received those services in a hospital setting or a doctor's office. Seen as a cost-cutting measure for the federal government, hospital groups oppose the measure, stating that the payment reductions could prompt reductions in medical workforce and cuts in services.

Potential restrictions for Medicare Advantage billing

The Republicans are also considering a crackdown on the process of Medicare Advantage "upcoding." Through the Medicare Advantage program, the federal government pays private insurance companies to manage participants' health care. When plans perform chart reviews of their customers, they sometimes add new medical diagnoses, which increases the payments that the government makes to the Medicare Advantage plans.

Government auditors say the chart review practice has resulted in billions of dollars in overpayments. However, critics of the potential restrictions worry that the policy change will hold Medicare Advantage rates flat, resulting in benefit cuts and higher costs for Medicare Advantage enrollees.

Bottom line

The future of Medicare is uncertain, and the Trump administration could continue to reshape the program. The stakes are high for retirees; benefits they currently rely on may shrink, provider networks could narrow, and the policy debate is moving quickly.

Stay informed about potential changes to Medicare and review your current coverage and your cost-sharing situation. Understanding how potential changes could impact you may help you prepare and, if needed, adjust your retirement plan.

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