If you rely on Medicare or Medicaid, you probably feel like the rules are always shifting. Just recently, a series of announcements revealed many new Medicare and Medicaid changes. It’s a lot to process, but understanding these shifts is vital for you and your family’s health care.
The Centers for Medicare and Medicaid Services, or CMS, released nine separate announcements covering everything from small payment adjustments to major new reforms. These updates have big implications for people with chronic health problems like low back pain or heart failure. These policy changes will also affect the operating margins of many providers, especially rural hospitals.
You’ll learn how these changes could impact low-income families, kids, seniors, and people with disabilities. Many people depend on these programs, sometimes even both at the same time. Let’s examine what CMS has planned for the nation’s largest health insurance programs.
Table of Contents:
- The Big Shifts Happening with Medicaid
- Unpacking the New Medicare and Medicaid Changes for Seniors
- A Closer Look at the New Model for Chronic Pain and Heart Failure
- Some Good News and How You Can Speak Up
- Conclusion
The Big Shifts Happening with Medicaid
Medicaid is seeing some significant adjustments that are direct policy changes from CMS. These are aimed at saving money and altering how care is managed. These changes will impact Medicaid eligibility and how states administer their programs.
Tackling Duplicate Coverage
Did you know that in 2024, CMS found that 2.8 million Americans were enrolled in two or more health programs at once? This isn’t about people who are dually eligible for both Medicare and Medicaid, which is a legitimate status. This is about individuals accidentally or intentionally enrolled in Medicaid in more than one state, or who had both Medicaid and a subsidized plan from the Affordable Care Act (ACA) marketplaces.
CMS says this duplicate coverage costs taxpayers more than $14 billion every year in wasted Medicaid spending. This kind of inefficiency in federal spending puts a strain on the entire system. To fix this, states will now be required to check their data for these dual enrollments at least twice a year, which could help cut federal spending significantly.
If you’re found to have duplicate private insurance and Medicaid, you’ll get a notice asking you to make a choice. If you ignore the letter, your ACA subsidy will automatically end in 30 days, which could leave you with a surprisingly large bill. Please don’t ignore this notice if you receive one, as it could cause you to lose coverage.
Shorter Coverage Periods Are Back
In the past, different states had some flexibility in how they run their Medicaid programs. Some states let adults stay on Medicaid for up to two years, even if their income changed slightly. Other states were working on letting children stay covered until they turned six without needing to re-qualify, a policy that many health policy experts supported.
The federal government is putting a stop to that practice. CMS has stated it will no longer approve state requests for these longer coverage periods. The agency wants everyone to go through a recertification process every six months to keep their benefits, a move that could affect millions of Medicaid enrollees.
According to CMS, these longer periods lead to “unsustainable expenditures” in Medicaid funding. If your state currently has one of these waivers, don’t expect it to get renewed once it expires. This health policy shift means more frequent paperwork for many families just to maintain their Medicaid coverage.
No More Medicaid Funds for Job Programs
This next change is interesting, especially with work requirements and community service being discussed so much in health news. Some states were using Medicaid funds to pay for job training or employment programs. The idea was to help Medicaid recipients meet work requirements and become more financially stable.
CMS has now said it will not approve any more funding for these programs within the new fiscal year. States with current job support waivers can keep them until they expire, but no new ones will be approved. Going forward, states will have to show clear cost savings or direct health benefits to get that kind of extra funding.
This decision represents a tightening of the rules around what constitutes a health-related expense under Medicaid. The focus is being narrowed to essential services directly tied to medical care. It is a departure from policies explored under President Donald Trump’s administration, which encouraged states to seek such waivers.
A New Way to Pay for Expensive Treatments
There’s a big development for people with sickle cell disease. CMS is rolling out a new payment model for cell and gene therapy that’s never been tried before. This initiative is happening in 33 states, Washington D.C., and Puerto Rico, and it could change how we pay for expensive prescription drug treatments.
The payment is based on results. CMS is telling drug companies that the treatments have to actually work, or the state Medicaid programs will get their money back. This is the first time the government has negotiated discounts based on patient outcomes for this type of therapy.
This is a big deal, and it’s a sign of things to come for the entire health insurance program. A little later, we’ll talk about how this same idea of paying for performance is showing up in some new Medicare changes for chronic conditions. Keep that in mind as it marks a substantial shift in how the government approaches health care costs.
Unpacking the New Medicare and Medicaid Changes for Seniors
Now, let’s look at the Medicare side of things. Many of these changes focus on improving the quality of care and cutting down on waste. A lot of it is technical, but the results could directly affect your healthcare experience and out-of-pocket costs.
A Push for Quality and Fairer Pricing
A constant theme in the new announcements is a focus on quality scores. Hospitals and surgery centers can now get a small payment increase if they meet certain quality reporting requirements. At the same time, Medicare is trying to reduce waste by changing how it pays for services at certain hospital-owned clinics, a move that could particularly impact urban areas with large health systems.
Have you noticed how many small doctor’s offices are being bought up by big hospital chains? When that happens, the price for the same service can go way up just because it’s now considered a “hospital service.” Medicare is cracking down on this by paying a rate that’s more in line with what a local doctor’s office would charge, helping to control costs for Medicare beneficiaries.
Another change that should help many people is the gradual elimination of the “inpatient-only” list. This was a list of about 253 procedures that Medicare would only cover if you were formally admitted to a hospital. This will be phased out over the next three years, letting more procedures be done safely and more affordably on an outpatient basis.
Shining a Light on Real Healthcare Costs
This next change, which was updated July, is one to watch. Starting January 1, 2026, hospitals will have to publicly share the real prices that are actually paid for their services. They won’t just be able to post a list of charges or a vague estimate; they’ll have to show what insurance companies and patients are truly paying.
This is huge for consumers, especially those with high-deductible plans or health savings accounts. I recently had to help my son shop for health care prices after he aged out of our family plan, and it was nearly impossible to get a straight answer. Having real price transparency will make it easier for people to make informed decisions about where to get care, a topic often covered by outlets like KFF Health News.
All these adjustments are part of a larger strategy. The nonpartisan Congressional Budget Office often analyzes these types of changes. In fact, CBO estimates project these pricing and payment adjustments will save Medicare about $11 billion over the next decade.
Cutting Down on Waste and Fraud
You may remember stories about companies billing Medicare for millions in urinary catheters that people never needed. It seems like fraudsters have found a new target: skin substitutes. According to a CMS press release, federal spending on these products has skyrocketed from $256 million in 2019 to over $10 billion in just five years.
These skin substitutes can be billed at as much as $2,000 per square inch. This made them an easy way for dishonest providers to inflate their bills. This is why you’re seeing Medicare tighten the rules and payment policies around this particular treatment, protecting both taxpayers and low-income Medicare beneficiaries from predatory practices.
More Help for Preventing Chronic Disease
There’s also some positive news about prevention. If a currently proposed rule gets finalized, Medicare will cover lifestyle coaching, nutrition help, and peer support for people who have prediabetes, all at no cost. This is a great step toward stopping diabetes before it starts for millions of Medicare enrollees.
This kind of preventive care support can be a lifeline, especially for people who also qualify for Medicare Savings Programs based on their income. Often, eligibility for these savings programs is tied to thresholds similar to those for Supplemental Security Income. This change shows a commitment to proactive health care rather than just reactive treatment.
CMS is also rethinking how it measures quality. They are getting rid of 10 quality measures that didn’t directly improve patient health. In their place, they’re adding five new ones focused on the prevention of chronic disease, bringing us to a very important, and slightly concerning, new proposal.
A Closer Look at the New Model for Chronic Pain and Heart Failure
What I’m about to share is technical, but please stick with me. This is critical for anyone on Original Medicare who deals with chronic low back pain or heart failure. CMS is proposing a completely new payment model for these conditions, and it could change how you get care.
It’s called the “Accelerating Specialty Model,” or ASM. A direct quote from the press release on CMS.gov states: “The model aims to enhance the quality of care and reduce low-value care… Participants will be held accountable for their performance, generating savings.” This sounds good, but what does it mean for patients?
It means that starting in 2027, specialists who treat people with heart failure or low back pain on Original Medicare will be paid based on their performance. Their pay will be tied to the health outcomes of their patients. They’ll be financially responsible for how well you do, a major shift in health policy.
| Component | Description |
|---|---|
| Performance Period | Five years, from January 2027 to December 2031. |
| Financial Risk | Specialist payments can be adjusted up or down by 10% in the first year based on performance scores. |
| Key Metrics | Reduced hospitalizations, lower use of “low-value” procedures, and improved patient-reported outcomes. |
I have some real concerns about this. I have seen loved ones fight for years to get proper care for chronic low back pain. I’ve seen how hard it is just to get a doctor to order the right imaging to figure out what’s wrong.
The new model wants to reduce what it calls “low-value care,” like “unnecessary procedures” and “avoidable hospitalizations.” But who gets to decide what’s unnecessary? I worry that financially incentivizing doctors this way could make it an even harder fight for patients to get the tests and treatments they need, like MRIs or even physical therapy.
This is my own perspective based on my experiences. When you tie a doctor’s paycheck to a patient’s progress for a condition that is notoriously difficult to “fix,” it feels like a risky path. These two conditions were chosen because they are among the most expensive chronic conditions for Medicare to treat, and some may view this as a way to implement deep cuts to care.
In the first year, a specialist’s payments could go up or down by 10% based on their performance scores. That’s a significant swing. Again, this only affects people on Original Medicare with one of these two conditions. Hopefully, it truly does improve care as CMS hopes, but it’s something to watch very closely because it will definitely affect people in a profound way.
Some Good News and How You Can Speak Up
It’s not all doom and gloom. There was definitely some good news mixed in with these announcements. Sometimes my skepticism gets the best of me because of the experiences I’ve had with the health insurance system.
For example, CMS is making permanent many of the telehealth flexibilities that started during the pandemic. This makes it easier to access care from home, a big win for people in rural areas or with mobility issues. They are also looking to cover more digital tools and mental health devices starting in 2026.
Most importantly, you have a voice in this. For the proposed rules we’ve discussed, including that new chronic care model, there is a 60-day public comment period. It is open until September 12, 2024.
You can go to FederalRegister.gov to find the rule and leave a comment. You can let them know what you think and share your concerns. If you are someone with a chronic condition on Original Medicare, making your voice heard on this is especially important, regardless of your background or immigration status.
Conclusion
These new Medicare and Medicaid changes are significant, and they will roll out over the next few years. We’re seeing a clear push to control costs, tie payments to results, and increase transparency in health care. Some of these changes, like clear pricing from hospitals and expanded telehealth, are long overdue and will genuinely help people.
Other shifts, like the new payment model for chronic conditions, raise some serious questions that many will be watching. The conversation around federal health policy is always evolving, moving away from past priorities like the tax cuts signed into law by President Trump. Now, the focus is on restructuring payments and managing federal spending within the programs themselves.
Staying informed about how the new Medicare and Medicaid changes will work is the first step in being your own best advocate. Being prepared and understanding what’s happening gives you the power to ask the right questions. This allows you to make the best choices for your health and finances in the years ahead.
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