Social Security comes with new changes after a law known as “One Big, Beautiful Bill” was approved and recently signed by President Donald Trump. Although some retirees will enjoy tax deductions, the law is not as beautiful as its name suggests.
This law includes massive cuts to Medicaid, restrictions on drug price negotiations under Medicare, and could even accelerate the collapse of the Social Security fund… And of course, it hasn’t exactly been a popular measure.
A tax deduction… but not for everyone.
Yes, that’s right. They have announced a $6,000 tax deduction for people over 65, that’s ok…
But let’s read the small letter, right? It is only for those that earn less than $75,000 per year (single) or $150,000 (as a couple). And above those limits, the deduction is gradually reduced until it disappears completely at $175,000 (single).
Who really benefits?
Only 88% of retirees would no longer pay federal taxes on their Social Security benefits, but it is a good number compared to the current 64%.
Yes, we love the idea, but let’s be realistic… But, let’s hear experts that warn that this change will benefit only middle and upper-class retirees, leaving out those who already need it the most…
Cuts to Medicaid?
While some enjoy tax relief, others are facing more difficulties. The law cuts over a trillion dollars from Medicaid, the program that helps cover medical expenses for those with the least. And while the eligibility requirements haven’t changed, there are now more obstacles to renew coverage.
Now, paperwork must be done more often and with more documents. The result? Many seniors could lose access simply for not submitting papers on time.
Hospitals in rural communities, which depend more on Medicaid payments to stay open, will be hit the hardest… Although the law includes a $50 billion fund for rural health, experts say that amount doesn’t make up for the losses the cuts will cause.
Less power to negotiate drug prices
Another thing that changes is Medicare’s ability to negotiate drug prices. Since 2022, negotiations were allowed to secure lower prices, but now many exceptions have been added. Especially for drugs intended for rare diseases, even if they are later used for other conditions…
For example, well-known drugs like Ozempic or Wegovy won’t drop in price before 2028. And that means more short-term costs for retirees (because they’re not just used for weight loss, but also for people with diabetes). The government, in addition, will stop saving about $5 billion due to this restriction.
The Social Security fund runs out faster
Recent reports already warned about it: the Social Security fund will run out of money in 2033. But with this new law, that date could arrive even sooner. Why? Because the approved tax deduction reduces the fund’s income, which speeds up its depletion.
If no action is taken, monthly Social Security payments could drop by 23%, and Medicare hospital benefits by 11%.
Managing things is getting harder
To make matters worse, in-person service at Social Security offices has also been reduced. You can no longer go without an appointment, and key service quality indicators have been removed from their website.
The goal is to make everyone use the online portal. But that’s a problem for many seniors who are not comfortable with technology or have a disability. It seems like they didn’t think of them…
Good or bad news?
It depends. The tax deduction may be a relief for some. But the Medicaid cuts, the drug restrictions, the risk of fund depletion, and the lack of in-person service are also real issues. What’s clear is that seniors need to stay informed, carefully review their situation, and demand more transparency and real solutions. Because this is not a minor detail: it directly affects their health, their money, and their quality of life.