President Trump has been in office just over 100 days. Confusion over possible changes to Medicare and Medicaid continue to weigh heavily on the hearts and minds of the millions of people, especially those over the age of 65, who depend on these programs.
In the months since Trump took office, he has signed a whirlwind of executive orders, including several key changes to Medicare — some of which have been walked back. Trump also outlined his plans for the next four years during his joint address to Congress in March, including authorizing the Department of Government Efficiency (DOGE) to investigate overspending, fraud and waste within the Medicare, Medicaid and Social Security programs.
Medicare is the primary health insurance for adults aged 65 and older. It also covers those with certain disabilities or illnesses, such as end-stage renal disease or Lou Gehrig’s disease. According to the most current data from the Centers for Medicare and Medicaid Services (CMS), just over 68 million people were enrolled in Medicare, including both Original Medicare and Medicare Advantage plans. This came at a cost of $1.03 trillion, or about 14% of total federal spending in 2024, according to KFF.
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Although it's still early into his second term, Trump has made several notable changes to Medicare, which could impact the financial stability of millions of Americans. (A separate story looks at what Trump has done with Social Security so far).
Robert F. Kennedy, Jr. to head the HHS
At the Department of Health and Human Services, under the leadership of Robert Kennedy Jr., 10,000 jobs have been eliminated, along with billions of dollars for research at top universities. And it looks like fluoride in drinking water may be the next to go, according to Health Secretary Robert F. Kennedy Jr.
Earlier this month, the Centers for Medicare and Medicaid Services announced an unusually steep rate increase for private health insurers that provide plans for older Americans through Medicare Advantage, at a cost of an extra $25 billion.
One of Kennedy's first major actions as the head of HHS included terminating about 10,000 full-time workers. The HHS also announced it would streamline operations by consolidating 28 divisions within HHS to 15 and create a new division to be called the Administration for a Healthy America, or AHA. The Centers for Medicare and Medicaid will decrease its workforce by approximately 300 employees.
Read: Whooping Cough: Highest Infection Rate Since 1948
The Administration blocks Medicare from covering obesity drugs
The Trump administration has decided not to go forward with a proposal for Medicare and Medicaid to cover obesity treatments covered under the 2026 Medicare Advantage and Part D policies.
One day after the Senate confirmed Dr. Mehmet Oz as head of the Centers for Medicare and Medicaid Services, the CMS said in a filing that it would not start covering anti-obesity drugs for its beneficiaries. (Legislation passed in 2003 prohibits Medicare, the federal health program for adults 65 and older, from covering medication solely for weight loss).
Under President Biden, CMS had proposed reinterpreting the law to allow for the coverage of weight loss drugs for obese, rather than overweight patients. CMS has now decided not to move forward with that coverage.
Read: Trump Administration Blocks Medicare From Covering Obesity Drugs — Why It Matters
Dr. Mehmet Oz lays out his vision for CMS
As the new administrator for the Centers for Medicare and Medicaid Services (CMS), Dr. Mehmet Oz vowed to work to modernize Medicare, the marketplaces and Medicaid.
“Great societies protect their most vulnerable. As stewards of the health of so many Americans – especially disadvantaged youth, those with disabilities, and our seniors, the CMS team is dedicated to delivering superior health outcomes across each program we administer. America is too great for small dreams, and I’m ready to get work on the President’s agenda,” Oz wrote.
Several of the initiatives Dr. Oz plans to focus on include:
- CMS will improve transparency to give Americans the information they need about costs.
- Equipping health care providers with better information about the patients they serve and holding them accountable for health outcomes. The CMS says Oz will work to streamline access to life saving treatments.
- Identifying and eliminating fraud, waste and abuse.
- Focusing on prevention, wellness and chronic disease management instead of only sick care.
- Oz pointed to programs CMS operates that can be used to focus on improving holistic health outcomes.
During his opening remarks to the Senate Finance Committee this past March, Dr. Oz said, "We have a generational opportunity to fix our healthcare system and help people stay healthy for longer." Republicans questioned Oz about his plans to eliminate fraud from the $1 trillion Medicare and Medicaid programs. At the same time, Democrats asked for clarity on whether he would support cutting Medicaid funding. Despite repeated questioning, Oz refused to commit to opposing cuts to Medicare or Medicaid.
Dr. Oz has been confirmed by the U.S. Senate to lead the Centers for Medicare and Medicaid Services. His confirmation took place on April 3, 2025, with a party-line vote of 53-45. Oz has already proposed a vision for Medicare that would increase private-sector involvement in the form of Medicare Advantage plans.
Read: Trump Picks Dr. Oz as Head of Medicare and Medicaid
Medicare and Medicaid job cuts
Robert F. Kennedy Jr. said he would cut 10,000 jobs — in addition to 10,000 employees who took an earlier layoff package — drastically reducing the agency's size from about 82,000 to 62,000.
In late March, the U.S. Department of Health and Human Services (HHS) announced a dramatic restructuring in accordance with President Trump's Executive Order. The restructuring will serve multiple goals without impacting critical services, per a recent press release by the HHS.
Reducing the workforce by 10,000 full-time employees is expected to save taxpayers $1.8 billion per year. According to the release, the restructuring will improve Americans’ experience with HHS by making the agency more responsive and efficient while ensuring that Medicare, Medicaid, and other essential health services remain intact.
“We aren't just reducing bureaucratic sprawl. We are realigning the organization with its core mission and our new priorities in reversing the chronic disease epidemic,” HHS Secretary Robert F. Kennedy, Jr. said. “This Department will do more — a lot more — at a lower cost to the taxpayer.”
Cuts to Medicaid?
Although not directly related to Medicare, it's worth mentioning that Medicaid, the state and federal program that provides health coverage for millions of low-income Americans (about 25% of the U.S. population), is at center stage in Congress’s bid to pass President Donald Trump’s sweeping agenda.
In simplest terms, Republicans want to reduce the cost of the $816 billion program as part of a long-term plan to cut federal spending and implement Trump’s tax cuts and his border and energy measures. Democrats adamantly oppose cuts to the program.
The total cost of Medicaid and CHIP in 2023 was $896 billion. About 70% of that amount, $616 billion, was paid by federal taxpayers. The rest was paid with state taxes. Trump has consistently said he will reduce Medicaid spending by eliminating fraud and abuse but will not cut benefits.
Democrats say the program does not contain enough fraud and waste to produce the savings Republicans want and they have urged Republicans to reconsider cutting the program.
Read: Medicare Premiums 2025: IRMAA Brackets and Surcharges for Parts B and D
The Administration cancels some payment trials
Aligning with Trump's efforts to reduce costs while maintaining the quality of care, the Center for Medicare and Medicaid Innovation (CMMI) has announced plans to cancel six payment trials by the end of 2025. The changes by the Trump Medicare innovation center are meant to change the way healthcare providers are paid, according to Axios. These programs include initiatives like Primary Care First, Making Care Primary and End-Stage Renal Disease Treatment Choices.
Read: President Trump's Stances on Social Security and Medicare
Trump pauses hospice industry oversight
The administration has put a hold on a federal program designed to increase oversight of hospice care, which receives over $25 billion annually from Medicare. This pause is meant to root out and eliminate fraud and waste and address fraudulent billing and improper patient enrollments. The program, initiated during the Biden administration, required noncompliant hospices to take corrective action or face expulsion from Medicare. The pause amounts to a win for the hospice industry, which said the Biden plan would penalize well-meaning operators without identifying underperforming ones.
Read: Hospice Is Often Misunderstood: What Is It, and Who Is It For?
OMB steps back funding freeze of Medicare grants and loans
In January, the Office of Management and Budget (OMB) issued a memo to temporarily pause the disbursement of federal grants and loans, including those for Medicare. However, before carrying through with the action, the OMB faced legal challenges and was blocked by federal judges. This led to confusion and concerns about potential impacts on Medicare funding. As of late February, a federal judge continued to block the OMB from freezing federal assistance, delivering another blow to the Trump administration's ongoing efforts to shrink federal spending.
Read: What a Federal Grants Pause Could Have Meant for Social Security and Medicare
Trump reverses Biden’s prescription drug price caps
The Trump administration has reversed some price cap negotiations on prescription drugs. Trump's reversal of Biden's policy is unlikely to immediately increase the cost of prescription drugs for Medicare and Medicaid recipients. However, whether the move will make it easier for drug companies to raise prices in the future is unclear. Some Medicare cost reduction programs were established under the Inflation Reduction Act (IRA) and can only be repealed by Congress. The IRA capped insulin copays at $35, for example.
Read: Trump Revokes Biden's Order to Lower Drug Prices for Medicare
The Administration gives DOGE the green light
So far, DOGE has taken charge of the Medicare enrollment system to modernize it and reduce costs after previous contractors failed to deliver results. In March, Musk said he believes Medicare payment systems are where “the big money fraud is happening.” Under DOGE’s federal restructuring, many probationary employees were fired at the Centers for Medicare and Medicaid Services (CMS), which houses Medicare and Medicaid.
According to a recent court filing, affiliates of DOGE have access to 19 sensitive systems at the HHS, as reported by WIRED. Nine of those are previously undisclosed. This access includes a centralized accounting system for all CMS programs and several additional HHS accounting systems that pay government contractors. No Medicare or Medicaid beneficiaries' personal information has been accessed.
Read: What You Need to Know About Elon Musk's DOGE's Access to Medicare Systems
Republicans' new funding bill
The Senate approved a House-passed spending bill that would maintain current federal spending levels through September 30, and have ongoing implications for those who receive Medicaid and Medicare. The bill guarantees no disruptions in benefits. It also postpones scheduled reductions to the Medicaid Disproportionate Share Hospital program, allowing low-income hospital providers to continue receiving support and extended services, including telehealth, which was initially poised to end on March 31. The bill also maintains full funding for veterans and their health care services and benefits.
Read: On Medicare and Need Telehealth? You Have Three More Months to Use These Services
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