In June 2025, the U.S. House of Representatives introduced a budget reconciliation bill titled the One Big Beautiful Bill Act (OBBBA). The legislation proposes a number of administrative changes to existing federal health programs, including modifications to automatic enrollment procedures affecting individuals who qualify for both Medicare and Medicaid. The bill does not repeal current benefit programs but includes provisions that would revise the process through which certain low-income individuals access premium and cost-sharing assistance programs.
Individuals who are eligible for both Medicare and Medicaid, commonly referred to as dual-eligible beneficiaries, accounted for approximately 14 percent of the Medicare population in 2021 and represented about 30 percent of Medicare fee-for-service spending, according to the Medicare Payment Advisory Commission. One program that serves this population is the Low-Income Subsidy (LIS), also known as “Extra Help,” which assists with Medicare Part D prescription drug premiums and other related out-of-pocket costs. The Centers for Medicare & Medicaid Services has estimated that the average annual value of this benefit is approximately $6,200 per beneficiary.
Under current law, individuals who are enrolled in Medicaid and subsequently become eligible for Medicare are automatically enrolled in LIS. The OBBBA proposes to eliminate automatic LIS enrollment for individuals who lose Medicaid eligibility. According to the Congressional Budget Office, which is a nonpartisan legislative agency, approximately 1.38 million individuals who are dually eligible for Medicare and Medicaid may lose their Medicaid coverage between 2025 and 2034. As a result, those individuals would no longer be automatically enrolled in LIS and would instead need to apply for the benefit directly through the Social Security Administration.
The OBBBA also includes provisions to delay implementation of certain federal regulations related to the Medicare Savings Programs, which help low-income individuals pay for Medicare Part B premiums and, in some cases, additional cost-sharing obligations. These regulations were finalized by the Centers for Medicare & Medicaid Services in 2023 and 2024 and were designed to streamline enrollment processes by reducing paperwork and simplifying eligibility verification. CMS previously estimated that these regulatory changes would result in approximately 860,000 new enrollees in the Medicare Savings Programs. The legislation proposes to delay the implementation of these provisions from 2027 to 2035.
The Congressional Budget Office projects that this delay would result in a reduction of federal Medicaid expenditures by approximately $162 billion over ten years. It also estimates that the change would lead to approximately 2.3 million fewer Medicaid enrollees during that period, of whom approximately 60 percent would be dual-eligible beneficiaries.
For individuals affected by these changes, the loss of Medicaid coverage would require separate applications to maintain access to both LIS and Medicare Savings Programs. LIS applications must be submitted to the Social Security Administration, while applications for Medicare Savings Programs are processed by individual state Medicaid agencies. These processes generally require income and, in some cases, asset verification. In addition to overseeing eligibility determinations, state Medicaid agencies would remain responsible for ensuring compliance with federal due process requirements, including adequate notice and appeal rights. Agencies would also need to confirm that enrollment procedures align with applicable civil rights and nondiscrimination laws.
The proposed legislation is currently under congressional consideration and may be amended prior to enactment. Stakeholders such as state Medicaid agencies, Medicare Advantage plans, healthcare providers, and beneficiary support organizations may wish to monitor further developments to assess potential operational and compliance implications. The changes outlined in the bill focus on administrative processes and eligibility pathways and do not modify the statutory structure of Medicare or Medicaid benefit categories.