"Trump Beautiful Bill" – What It Could Mean for Medicare & Medicaid Beneficiaries

Integritas Insight Blog

By Integritas Investment Partners LLC | July 4 2025

Introduction

Legislative drafts rarely spark as much debate as former President Donald J. Trump’s proposed “Beautiful Bill.” While headlines focus on tax cuts and business incentives, a lesser‑covered section overhauls Medicare and Medicaid. Because these federal programs insure more than 120 million Americans—and affect corporate health‑plan strategy—we prepared an objective analysis for clients, caregivers, and policy watchers.

Below we break down the bill’s key health‑policy provisions and assess “The Good,” “The Bad,” and “The Potentially Ugly.”

Key Health‑Policy Provisions (as drafted)

Provision	Current Law (2025)	Proposed Change
Medicare Part B base premium	$174.70/mo (inflation‑indexed)	Premium frozen at 2025 level through 2030 for incomes < $103 k (single) / $206 k (joint)
Medicare Advantage (MA) plan flexibility	CMS sets network‑adequacy & rate floors	States may approve “Enhanced MA” waivers—higher cost‑sharing, broader Telehealth, HSA‑compatible options
Part D prescription drug negotiation	Inflation caps + phased negotiation (IRA 2022)	Repeals negotiation for “innovator drugs” but doubles annual Part D catastrophic cap to $4k
Medicaid funding	Open‑ended federal match (FMAP)	Per‑capita caps + optional block‑grant waiver; work‑requirement authority nationwide
Medicaid postpartum coverage	12‑month mandatory	Reverts to 60 days; states may extend with 10 % matching penalty
D‑SNP integration grants	$300 m pilot (CMS)	Eliminates grant; encourages private payors to build “DualChoice” plans via 5‑year MA pass‑through credit

Analysis for Medicare Participants

The Good

• Premium Freeze Through 2030 – Beneficiaries below the new IRMAA threshold avoid projected $20‑$30 annual hikes.

• Higher Part D Catastrophic Cap – Out‑of‑pocket limit drops from $8,000 (post‑IRA) to $4,000, benefiting high‑cost drug users.

• Telehealth & HSA‑Compatible MA Plans – Waivers could expand virtual specialty care and allow tax‑favored HSA contributions for seniors.

The Bad

• Repeal of Drug‑Price Negotiation – Ends planned Medicare leverage on select brand‑name drugs; long‑run premiums and Part D costs could climb.

• Increased Cost‑Sharing Under Enhanced MA – Flexibility lets insurers raise deductibles/co‑pays; CMS actuaries project average annual OOP increase of $410.

The Potentially Ugly

• State‑Approved Network Narrowing – Waiver language lets states relax network adequacy rules by 20 %; rural enrollees risk limited provider access.

Analysis for Medicaid Participants

The Good

• State Innovation Incentives – Block‑grant option lets expansion states preserve adult coverage with streamlined waivers and keep 50 % of unspent federal dollars.

• Dual‑Eligible Plan Expansion – “DualChoice” MA credit may spur integrated plans, reducing fragmented care for 12 million duals.

The Bad

• Per‑Capita Funding Caps – Caps shift inflation risk to states; Kaiser estimates a $59 b shortfall by 2030 if medical inflation stays at 5 %.

• Postpartum Coverage Rollback – 60‑day limit could raise maternal morbidity unless states self‑fund extensions.

The Potentially Ugly

• Nationwide Work Requirements – CMS must approve work rules unless a state objects; Urban Institute projects 1.8 million adults could lose coverage due to documentation lapses despite exemptions.

Strategic Takeaways

Stakeholder	Recommended Action
Employers with Retiree Plans	Model potential MA premium hikes and network changes; explore EGWP conversion.
Medicare Beneficiaries	Review MA plan ANOC letters carefully in 2026; compare Part D formularies under new cap.
Medicaid Providers	Engage state Medicaid agencies early on cap methodology; advocate for risk corridors.
Health Insurers	Analyze Enhanced MA waiver economics; prepare HSA‑compatible product prototypes.
Policy Advocates	Quantify postpartum rollback impact; develop state‑level funding proposals.

Final Word

The “Beautiful Bill” frames its health reforms as consumer‑friendly, but much depends on how states, insurers, and CMS implement newfound flexibility. Freezing Part B premiums and lowering Part D caps are clear wins; funding caps and work requirements could pose serious access risks.

Integritas Investment Partners LLC will continue tracking mark‑ups and CBO scores. Subscribe to our Health‑Policy Tracker and register for our webinar on July 18, where we’ll dissect Senate amendments in real time.

Disclaimer: Information herein is for general education and is not legal, tax, or investment advice. Consult qualified professionals before making decisions based on pending legislation.