Trump Warned The Iran War Will Cost You Your Medicare

At a White House Easter lunch, President Trump told attendees that the federal government can't pay for programs like Medicare and Medicaid while fighting the war with Iran.

"It's not possible for us to take care of daycare, Medicaid, Medicare, all these individual things," he said. "They can do it on a state basis. You can't do it on a federal. We have to take care of one thing: military protection. We have to guard the country."

Trump's remarks, as well as his past actions toward Medicare, should be concerning for anyone on or soon to be on Medicare, since they may significantly impact your retirement plan.

How the One Big Beautiful Bill Act affected Medicare

This isn't the first time that the Trump administration has cut funding to Medicare. According to Medicare Advocacy, when Trump signed H.R. 1, the One Big Beautiful Bill Act (OBBBA), into law on July 4, 2025, the bill cut over $1 trillion from health programs. It was the largest rollback of federal health care support in history.

The OBBBA cuts to Medicare

The OBBBA reduces tax rates and temporary deductions for Americans age 65 and older. It speeds up the timeline for when the Medicare Hospital Insurance Trust Fund will become insolvent by 12 years. That fund pays for expenses like skilled nursing, inpatient hospital services, and hospice care. According to the Congressional Budget Office, that fund could be insolvent, and full Medicare Part A payments for providers might end by 2040, unless Congress takes action.

The CMS moratorium and its impact on Medicare access

Provisions in the OBBBA also imposed a moratorium on the Medicare Savings Program and Medicaid Eligibility and Enrollment rules. Both rules were designed to help streamline the process of enrolling for Medicaid, particularly among older adults and people with disabilities.

A Congressional Budget Office analysis found that delaying the implementation of these rules could mean that 1.3 million fewer Medicare beneficiaries would have Medicaid coverage in 2034. A KFF analysis determined that if someone with an income of $967 per month lost those Medicaid benefits, they would have to pay $185 per month in Medicare premiums before accounting for other out-of-pocket costs.

The $500 billion in Medicare spending reductions

The Congressional Budget Office also confirmed that the OBBBA will trigger $536 billion in Medicare cuts. Under PAYGO budget rules, which specify that new legislation cannot increase the federal budget deficit unless other legislation offsets that deficit, the OBBBA will cut about $45 billion from Medicare in 2026. By 2034, that cut will grow to $76 billion, and from 2026 through 2034, the cuts will total $536 billion.

New Medicaid eligibility requirements

The OBBBA also adds new eligibility requirements to reduce the number of people enrolled in Medicaid. Some adults will need to meet work or training requirements to be able to keep their coverage. States are also required to verify Medicaid eligibility more frequently, and those increased verification requirements can cause even those who are eligible for the program to lose their coverage.

Republicans are considering additional federal health care cuts

While the OBBBA has had sweeping impacts on Medicare, Republicans spent much of 2026 weighing additional changes to help offset the cost of the Iran war. The Pentagon's initial request, reported in mid-March, was for $200 billion, but that figure didn't hold. By late July, House Republicans had instead passed a $95 billion budget blueprint (with roughly $70 billion earmarked for the war) and, separately, a $1.15 trillion defense bill containing tens of billions more for the conflict. Neither had cleared the Senate at that point; Senate Democrats had blocked the defense bill from coming to a vote, demanding concessions on the administration's handling of a war that had reignited in July after an April ceasefire collapsed.

Potential site-neutral payments for Medicare

One idea Republicans floated is a site-neutral payment change, which would equalize Medicare payments for services regardless of whether they're delivered in a hospital setting or a doctor's office. Seen as a cost-cutting measure for the federal government, hospital groups oppose it, arguing the payment reductions could prompt workforce reductions and service cuts. It remains an idea under discussion rather than enacted policy, and even Republican leadership has questioned whether it will advance.

Potential restrictions for Medicare Advantage billing

Republicans also discussed a crackdown on Medicare Advantage "upcoding," the practice by which private insurers' chart reviews add new diagnoses that increase what the government pays them. Government auditors say this has led to billions in overpayments, but critics of restricting the practice worry it would hold Medicare Advantage rates flat, translating into benefit cuts and higher costs for enrollees. Like site-neutral payments, this remains a proposal rather than passed policy, and Republican leadership itself has expressed doubt it will make the final bill.

Government auditors say the chart review practice has resulted in billions of dollars in overpayments. However, critics of the potential restrictions worry that the policy change will hold Medicare Advantage rates flat, resulting in benefit cuts and higher costs for Medicare Advantage enrollees.

Bottom line

The future of Medicare is uncertain, and the Trump administration could continue to reshape the program. The stakes are high for retirees; benefits they currently rely on may shrink, provider networks could narrow, and the policy debate is moving quickly.

Stay informed about potential changes to Medicare and review your current coverage and your cost-sharing situation. Understanding how potential changes could impact you may help you prepare yourself financially and, if needed, adjust your retirement plan. 

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