The Budget Reconciliation Act of 2025 (H.R. 1 or P.L. No. 119-12) makes significant changes to Medicaid and Medicare. Many of these changes will have direct negative impacts on older adults and people with disabilities, while others will affect them indirectly.
This resource details impacts of the law’s changes specifically on people who are dually eligible for Medicare and Medicaid. It is designed to assist advocates in effectively communicating to their dually eligible clients about how H.R. 1’s changes will affect them and empower advocacy to shape implementation of the law to help prevent coverage losses for this population.
Who are People Dually Eligible?
People dually eligible qualify for both Medicare and Medicaid at the same time. There are approximately 12 million people dually enrolled in Medicare and Medicaid. Around 65% of people dually eligible are age 65 and over and 35% are under age 65.
To qualify for Medicare, individuals must either be age 65 and over, receiving Social Security disability benefits for 24 months, or have certain conditions like End Stage Renal Disease (ESRD). For individuals dually eligible to qualify for Medicaid, they must have low incomes and limited assets and be eligible based on either their age (65+) or disability. Note that people with Medicare or age 65+ cannot enroll in Medicaid Expansion under the Affordable Care Act.
Reduced Federal Funding to States
H.R. 1 cuts $990 billion over the next 10 year in federal Medicaid funding for states. The largest funding cut is limiting provider and insurer taxes that help states fund their share of Medicaid. The size of cuts will vary by state, but all states will face reductions.
Impact on People Dually Eligible
Historically, when states face budget shortfalls, they find savings by cutting Medicaid benefits that are optional under federal law. Many of these optional benefits are those that people dually eligible rely on because Medicare does not cover them – including at-home care through home and community-based services (HCBS), dental, vision, and hearing. HCBS are at particular risk, since they account for half of all optional Medicaid spending. During the Great Recession, every state cut HCBS through benefit reductions, limiting eligibility, and/or reducing provider payment rates. States could also roll back income and asset eligibility expansions for their aged & disabled Medicaid programs and Medicare Savings Programs that serve people dually eligible.
Advocacy Tip
Cuts to Medicaid are not inevitable. Aging and disability advocates must engage with their state lawmakers to elevate the importance of Medicaid for people dually eligible and push for revenue solutions that can fill budget holes and prevent cuts. For more, watch our State Revenue Strategies for Aging and Disability Advocates Webinar.
Moratorium on Streamlining Medicaid and Medicare Savings Program Eligibility and Enrollment
H.R. 1 immediately stopped enforcement of many provisions in the Medicaid Streamlining Eligibility and Enrollment Rules until 2034. These rules aimed to help low-income Medicare enrollees enroll in and remain enrolled in Medicaid and Medicare Savings Programs (MSPs) by modernizing eligibility rules and processes.
Impact on People Dually Eligible
States are no longer required to take certain steps to streamline enrollment in Medicaid and MSPs for older adults and people with disabilities. As a result, the same administrative barriers that have been in place for decades that make it harder for people to enroll in Medicaid and MSPs will remain in place, unless a state takes action on its own to implement the provisions. If states maintain the status quo, it is estimated that millions of low-income older adults and people with disabilities who are eligible for Medicaid and MSPs will continue to face enrollment barriers and improper terminations.
Advocacy Tip
States still have the option to implement most provisions in the Streamlining Rules. Implementing these changes would make it easier for eligible people to enroll and stay enrolled in Medicaid and MSPs, reduce churn, and also reduce administrative costs for states. Read more in Justice in Aging’s Issue Brief, Final Rule to Streamline Access to Medicaid.
Medicare and Medicaid Eligibility Restrictions for Lawfully Present Immigrants
H.R. 1 limits eligibility for Medicare and Medicaid to three specific categories of non-citizens: legal permanent residents (green card holders), Cuban/Haitian family reunification program entrants, and Citizens of the Freely Associated States (Micronesia, the Marshall Islands, and Palau). All other lawfully-present immigrants will no longer be eligible for Medicaid in most states as of October 2026, and will have their Medicare coverage terminated in January 2027.
Impact on People Dually Eligible
Many lawfully present immigrants with Medicare, such as refugees, asylees, and people with temporary protected status (TPS), will have the health coverage they rely on and paid into taken away. Because H.R. 1 also strips their eligibility for Medicaid and Marketplace premium tax subsidies, they are likely to become uninsured. Legal permanent residents and other immigrants who remain dually eligible may still have coverage disrupted due to erroneous application of new rules, confusion, and chilling effects.
Other Medicaid Eligibility Changes
While only a few changes directly impact Medicaid eligibility for people dually eligible, implementation of these other eligibility changes under H.R. 1 is challenging for states and increases the opportunity for eligibility and enrollment system errors broadly. Advocates for dually eligible individuals should be proactive in securing protections and monitoring for inadvertent and erroneous Medicaid coverage disruptions.
Work Requirements for Medicaid Expansion Enrollees
People dually eligible for Medicare and Medicaid are not subject to work requirements.
Under H.R. 1, states that have fully or partially expanded Medicaid must implement work requirements by January 1, 2027. Work requirements only apply to adults ages 19-64 enrolled in the Medicaid Expansion program, not to individuals enrolled through aged or disabled pathways or enrolled in SSI, SSDI, or Medicare. Expansion enrollees must either satisfy the work requirement or meet an exemption under the law. Exemptions include, for example, being a caregiver or being deemed medically frail.
Impact on People Dully Eligible
Since people dually eligible are not subject to work requirements, they should not be required to prove they are excluded from requirements, fill out application questions about work requirements, or submit any documentation regarding work requirements. However, due to the complexity of implementing these changes, states may erroneously send notices to people dually eligible requiring them to either prove they are exempt from work requirements or prove work activity.
People dually eligible could also be impacted if their caregiver, who could be subject to work requirements, faces barriers to obtaining an exemption.
Advocacy Tip
Advocates should work with their states to ensure that people dually eligible are automatically and permanently excluded from work requirements, and that caregivers and other people enrolled in Medicaid Expansion who are subject to work requirements can obtain exemptions as easily and automatically as possible. Read more in our Justice in Aging Work Requirements Toolkit.
Cost Sharing and More Frequent Renewals for Medicaid Expansion Population
People dually eligible are not subject to H.R. 1’s more frequent renewals or cost sharing requirements.
H.R. 1 requires states to reassess eligibility for Medicaid Expansion enrollees every six months effective January 1, 2027. The law also requires states to impose some cost sharing for certain services on the Medicaid Expansion population effective October 1, 2028.
Impact on People Dully Eligible
People who are dually eligible are not subject to these new requirements. However, because applying different rules to different groups is complex, Medicaid agencies may erroneously apply these rules to dually eligible individuals. Health care providers, who serve many types of patients, may also incorrectly charge dually eligible people cost‑sharing amounts. Improper billing of dually eligible individuals is already a problem, and H.R. 1 could make this issue worse.
Advocacy Tip
Advocates should work with their Medicaid agencies to ensure their eligibility systems apply these rules to the Expansion population only and not to dually eligible individuals. If dual eligible clients are billed, advocates should dispute these charges using Justice in Aging’s Improper Billing Toolkit. If advocates see widespread improper billing of people dually eligible, please contact Justice in Aging at info@justiceinaging.org.
Reduced Retroactive Coverage Period
Currently, federal law requires states to provide Medicaid coverage retroactively for up to three months when someone initially applies and would have been eligible. H.R. 1 reduces the maximum retroactive eligibility period from three months to two months for people dually eligible for Medicare and Medicaid effective January 1, 2027.
Impact on People Dually Eligible
The reduction of the retroactive coverage period from three to two months reduces financial protections for dually eligible enrollees in the SLMB or QI Medicare Savings Programs. It may also impact access to care for people who experience medical emergencies and need Medicaid to pay for long-term care. Any delay in submitting the application could result in services not being covered.
It is also possible that people dually eligible are erroneously subjected to the shorter one-month retroactive period that applies to the Medicaid Expansion population only.
Advocacy Tip
It is important for people to submit their Medicaid application as soon as possible and not delay to ensure that services rendered prior to the application date are covered and minimize medical debt. Advocates should also work with their Medicaid agencies to ensure their eligibility systems correctly apply the correct retroactive coverage periods to the correct populations and that they are conducting education and outreach on the change.
Reduced Home Equity Exclusion
H.R. 1 restricts and freezes the maximum amount of home equity that is excluded when determining eligibility for Medicaid long-term care at $1 million. States can continue to set higher limits for homes on land zoned for agriculture. This provision takes effect on January 1, 2028. As under current law, the home equity limit does not apply if the Medicaid applicant’s spouse, child under age 21, or disabled child is living in the home, and waivers for demonstrated hardship remain.
Impact on People Dually Eligible
Twelve states currently have home equity limits above $1 million, meaning some people dually eligible in those states could lose Medicaid eligibility or have to sell their home to qualify or maintain eligibility when this cap takes effect. Due to inflation, many more people dually eligible will be impacted by this change in the years to come. They either will have to sell their home or lose access to essential long-term care.
Advocacy Tip
Advocates should work with their Medicaid agencies to ensure applicants are notified of existing protections, such as hardship waivers and exemptions, and that these protections are properly and fairly applied. If advocates notice widespread issues with implementation of the change in the home equity limit or that individuals who need long-term care are dissuaded from enrolling in Medicaid due to misunderstanding or misinformation, please contact Justice in Aging at info@justiceinaging.org.
Conclusion
Despite lawmakers’ claims that these cuts would protect Medicaid for those who need it most, H.R. 1 puts coverage and care at risk for older adults and people with disabilities including those dually eligible for Medicare and Medicaid. These harms are not inevitable. States are making choices in how they implement H.R. 1 and support their Medicaid programs. They can mitigate harm by streamlining Medicaid and MSP enrollment, building in protections and testing new eligibility and work‑requirement systems, and raising revenue to fund Medicaid and other programs.
Advocates must stay closely engaged with their state agencies and legislators, monitor for errors and harmful impacts, and use all available tools to prevent coverage losses and protect access to needed care for people dually eligible.
