Trump's Tax Law Could Trigger Disaster for Medicaid

The upcoming law, set to take effect in 2027, will reduce the duration of retroactive coverage period Medicaid. Presently, Medicaid pays for medical expenses from the previous three months before an individual applies, provided they were qualified at that time. With the updated legislation, this timeframe will decrease to two months for standard participants, which includes many low-income older adults, and to just one month for individuals enrolled through the Medicaid expansion program.

This shift raises significant concerns for elderly individuals depending on Medicaid for long-term care in nursing homes, where healthcare expenses tend to be greater. Backdating eligibility is essential following unexpected health crises like accidents or brain attacks, when family members focus first on urgent medical treatment rather than navigating the lengthy and complicated process of applying for Medicaid, which may require several weeks or even months.

In Indiana, a comparable exemption revealed that almost 14% of recipients missed out on an average of $1,561 in reimbursement amounts. The effects of the OBBBA are anticipated to be significantly more severe, as those who enroll later could encounter tens of thousands up to hundreds of thousands of dollars in un-covered healthcare expenses. The typical cost for private payment at a nursing facility is close to $11,000 monthly in 2025, which may result in substantial medical debts and forced removals from housing.

Experts like Harry Nelson and Sam Brooks have called the change 'catastrophic,' predicting it will reshape long-term care perceptions for decades. This change comes as the U.S. population ages and the baby boomer generation increasingly requires long-term care. Vulnerable populations, such as those in rural areas who often delay Medicaid enrollment until a crisis, could face significant risks.

The Trump Administration's Perspective

Kush Desai, an employee at the White House, mentioned that the "One Big Beautiful Bill" seeks to safeguard and maintain Medicaid by cutting down on inefficiency, deceit, and misuse. He underscored the government's dedication to the welfare and health of elderly individuals, pointing out the elimination of taxes on Social Security payments as evidence of this pledge.