The Senior Citizens League (TSCL) Monthly Washington Update for the end of January 2025
The month of January certainly has generated a considerable volume of news out of Washington, D.C. As he had promised, immediately after his inauguration, President Trump signed an extraordinary number of executive orders that included issuing pardons for those convicted of assaulting police officers and others convicted in the January 6, 2020, assault on the Capitol; revoking security clearances for critics; issuing major directives concerning those employed in the federal workforce; and ordering a massive effort to deport illegal immigrants, among many other things.
In this issue, we report how some of his orders may affect seniors in the coming months and years.
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Trump Ends Drug Pricing Test Programs
President Donald Trump’s second-term health care agenda is taking shape with a clear focus on undoing several Biden-era policies. Even though he has long supported drug-pricing reforms, he reversed a Biden executive order that created three new drug-pricing models to lower the cost of prescription drugs for people on Medicare and Medicaid.
The first initiative focused on helping state Medicaid programs cover the costs of high-price, highly effective cell and gene therapies by establishing multistate purchasing agreements and enabling states to avoid paying for ineffective treatments.
The second model sought to reduce Medicare payments for drugs granted accelerated approval by the FDA, encouraging manufacturers to complete confirmatory trials promptly.
The third pilot project aimed to standardize $2 flat co-pays for generic drugs used to treat chronic conditions in Medicare prescription drug plans, promoting medication adherence.
In his reversal orders related to the implementation of the Medicaid Act and Affordable Care Act (ACA), Trump instructed the directors of the White House’s Domestic Policy Council and the National Economic Council to review and take all necessary steps to rescind, replace, or amend all actions that resulted from the revoked orders. By March 6, the directors must provide the President with an additional list of Biden-era orders, other actions he should revoke, and a list of replacement orders, memoranda, or proclamations.
While executive orders alone cannot change the law of the land or create or rescind regulations, they can signal an Administration’s intent and guide and direct federal agency policy and other actions.
So far, key initiatives by former President Joe Biden, such as the $35 monthly cap on insulin, the $2000 annual OOP cap on prescription drugs, and Medicare’s authority to negotiate drug prices under the Inflation Reduction Act (IRA), remain unaffected by Trump’s executive actions. However, these moves could hint that the incoming administration may be unwilling to move forward on these current policies.
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Medicaid May be Headed to the Chopping Block
At his recent hearing before a Senate committee, Secretary of Health and Human Services, Robert F. Kennedy. Jr. seemed confused about Medicaid and how it is funded. When asked how he would reform Medicaid, he had no answer.
This comes on top of the news that top Republicans in the House of Representatives are passing around a 50-page list of ideas on how to cover the cost of an extension of the 2017 Trump tax cuts, which will allow corporations to pay lower taxes, among other things. The list includes cuts to Medicaid and new tariffs on all imports to pay for those cuts.
So, what is Medicaid, and how many seniors rely on Medicaid for their healthcare?
Medicaid is a joint federal and state program that provides health coverage to over 72 million Americans, including children, pregnant women, parents, seniors, and individuals with disabilities. Medicaid is the single largest source of health coverage in the United States.
Millions of seniors and older Americans rely on Medicaid coverage. Approximately 7.2 million Americans over age 65 are enrolled in Medicaid, and more than 11 million Americans aged 50 to 64 have health coverage through Medicaid – many thanks to the Affordable Care Act’s Medicaid expansion.
Nearly 6 million older adults live below the federal poverty level. Medicaid is a lifeline for millions of seniors and older Americans on fixed incomes.
Medicaid funds nearly half of long-term care nationwide. As seniors age, long-term care services become more essential, serving about 70 percent of seniors who will need some form of long-term care in their lives.
Medicaid pays for about 62 percent of long-term care residents in nursing homes. Medicaid covers nursing home bills for over 60 percent of residents in nursing homes. For instance, in 2019, this totaled over $50 billion. The median private nursing home room cost over $100,000 yearly in 2024.
Approximately 12 million seniors who Medicare covers also have Medicaid coverage. Nearly 8 million dual-eligible Medicare-Medicaid beneficiaries are “full benefit” Medicaid enrollees with access to a range of Medicaid benefits not otherwise covered by Medicare, such as transportation to medical appointments and medical equipment.
Seniors and older adults depend on Medicaid for affordable, comprehensive care. Older Americans often have more complex health issues, requiring additional medical attention that is costly and would be out of reach if not for Medicaid. Nearly half of dual enrollees are seniors of color, and over half of dual enrollees suffer from long-term disabilities.
TSCL will be watching this issue closely because, as we show above, Medicaid covers more than just seniors. It is clearly a program that affects millions of seniors.
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Surprise! Immigrants – Both Legal and Illegal - Help Fund Social Security
As Congress struggles to produce legislation to ensure Social Security is fully funded far into the future, it will have a new problem to deal with. If President Trump carries out his threat to deport all illegal immigrants in the U.S., Social Security will face a more significant deficit than it otherwise would.
Studies by think tanks and the Congressional Budget Office have shown that the Social Security Administration receives billions in free money each year from an unexpected source: legal and illegal immigrants.
Some economists project a broad drag on the economy as a result of Trump’s actions — and it could cost Social Security roughly $20 billion in cash flow annually, according to actuaries at the Social Security Administration, which sends benefits to 68 million Americans each month, totaling $1.5 trillion last year.
Foreign-born workers contribute to Social Security at the same tax rate as everyone else but have lower predicted Social Security benefits than native-born Americans because, on average, they earn lower lifetime wages and have fewer years of employment that count toward their calculated benefits.
In addition, recent migration trends suggest that foreign-born workers are increasingly returning to their home countries to retire. As a result, many who pay into the Social Security system during their working years may not be eligible to receive benefits because non-residents can only do so under certain circumstances. Foreign-born contributors can generate net gains for the Social Security trust fund by not fully drawing benefits.
As far as illegal immigrants are concerned, in 2022, they contributed $25.7 billion in Social Security taxes, typically by working under borrowed or fraudulent Social Security numbers. Unauthorized immigrants, however, are ineligible to claim Social Security benefits.
