Millions of Americans depend on Social Security and Medicare to survive. Earlier this year, the President signed into law legislation that makes changes to the benefits our seniors rely on—so Congress Member Lou Correa wanted you to know more about what changes will be coming, and how it will impact you and your family. 

 TAX DEDUCTIONS FOR SENIORS

Taxpayers aged 65 and older will be able to deduct an additional $6,000 from their taxable income for tax years 2025 through 2028.

• The deduction will benefit middle and higher income seniors, lower-income seniors will feel less of an impact because the standard deduction wipes out most of their tax liability.
• Those making up to $75,000 in income (or $150,000 for joint filers) can see the full benefit. 
  • For those making above the $75,000 (or $150,000 for joint filers) income, this deduction will be phased out. 
• Nearly half of Americans aged 65 or older will NOT benefit because of their income levels.
• Taxpayers and their spouses would have to provide their Social Security numbers to claim the deduction.
• These benefits will sunset after four years.

 TAXES ON SOCIAL SECURITY

Federal income taxes have not been eliminated on Social Security benefits.

• The provision weakens Social Security funding by reducing the tax money it receives. It moves up the date the Social Security trust fund would run out by one year, from 2033 to 2032.
• Reports that seniors will receive a $6,000 check are inaccurate. Rather, some seniors may receive an additional tax deduction of up to $6,000
• Only half of Americans aged 65 or older will receive the deduction.

 CHANGES TO MEDICARE 

The President’s tax legislation made some important changes to Medicare costs and services.

Medicare Eligibility Policies

• The law restricts Medicare eligibility to U.S. citizens, green card holders, Cuban-Haitian entrants, and people residing under the Compacts of Free Association—eliminating Medicare eligibility for people not included in these groups, such as those with temporary protected status, refugees and asylees.

Medicare Savings Programs

• The law suspends a 2023 Biden administration rule to reduce barriers to enrollment in Medicare Savings Programs (MSPs), which provides Medicaid coverage of Medicare premiums and cost sharing for low-income Medicare beneficiaries.

Medicare Physician Fee Schedule

• Provides a temporary one-year increase of 2.5% to the Physician Fee Schedule for all services between January 1, 2026 and January 1, 2027.

Orphan Drugs and the Drug Price Negotiation Program

• The 2022 Inflation Reduction Act gave Medicare the power to negotiate prices for certain high-cost medications, with the first negotiated prices taking effect in 2026. 
• The law carves out orphan drugs, which are medications for rare disease, from Medicare drug price negotiations. 

Nursing Home Staffing Final Rule

• The law effectively suspends a 2024 Biden administration rule that requires long-term care facilities to meet minimum staffing levels (including a 24/7 Registered Nurse on-site and a minimum of 3.48 total nurse staffing hours per resident day).

 ANNUAL MEDICARE CHANGES

Some regular changes to Medicare are on the horizon, unrelated to the President’s signing of his tax legislation.

2025 Medicare Premiums 

• In November 2025, the updated premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs were announced, along with the 2026 Medicare Part D income-related monthly adjustment amounts.
• More information can be found here.
  • Medicare Part A
    • The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will be $1,736 in 2026, an increase of $60 from $1,676 in 2025.
  • Medicare Part B
    • The standard monthly premium for Medicare Part B enrollees will be $202.90 for 2026, an increase of $17.90 from $185.00 in 2025.The annual deductible for all Medicare Part B beneficiaries will be $283 in 2026, an increase of $26 from the annual deductible of $257 in 2025.

2026 Medicare Advantage Rates

• In April 2025, the 2026 Medicare Advantage payment policies were finalized. They included a 7.2% increase ($35 billion) in payments to Medicare Advantage plans.

Congress Member Lou Correa said, “As always, I am committed to serving you, advocating for issues that matter to our community, and connecting you to important resources. If you have questions about how these changes might impact you and your family, my office is here to help. Give us a call at (714) 559-6190.”

Links: 

1 https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors 

2  https://www.npr.org/2025/07/11/nx-s1-5459955/social-security-megabill-trump-tax-cuts 

3  https://medicareadvocacy.org/impact-of-the-big-bill-on-medicare/