What Seniors Need To Know About The Big Tax And Budget Bill
By JCA on July 24, 2025
by Howard Gleckman for his blog
The massive 2025 budget bill, which Congress passed on July 3, would slash safety net programs for older adults, people with disabilities, and their family caregivers, though many of those cuts may not take effect for years. At the same time, the bill would lower taxes for some older adults.
The measure would reduce Medicaid spending by nearly $1 trillion over the next decade, largely by cutting the federal payments for the program and imposing a work requirement on many recipients, perhaps including some family caregivers.
It would block a Biden-era rule to require minimum staff to care for patients and residents of nursing homes while approving more spending to deport immigrants, which likely will make the current severe shortage of care workers much worse.
It also would increase the standard deduction for older adults, but excludes a tax break for family caregivers once promised by President Trump and fails to enhance tax-free savings that can be used to pay for long-term care.
Here is what some key provisions will mean for older adults and people with disabilities:
Medicaid: The budget bill would slash Medicaid spending by nearly $1 trillion over the next decade.
Work requirement: Older adults and young people with disabilities generally are exempt from the work requirements. But because the law is so vaguely written, family caregivers of older adults may not be.
Cuts to federal Medicaid contributions: The bill limits the ability of states to impose taxes on Medicaid providers, such as nursing homes and hospitals.
Medicaid home and community-based care: Given the massive cuts in federal payments, it seems improbable that states will be expanding HCBS anytime soon.
Care workers: The bill would effectively repeal a Biden Administration rule aimed at requiring nursing homes to maintain minimum levels of staffing, including 24/7 RNs on site.
Taxes: The budget bill raises the standard deduction for older adults by $6,000. The Tax Policy Center estimates that fewer than half of seniors would benefit from the higher standard deduction.