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One Big Beautiful Bill and Your Retirement

Understanding the Impact of the One Big Beautiful Bill on Your Retirement

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law, extending many provisions from the original 2017 Trump tax cuts. Several provisions from the new legislation could impact your income, taxes, and Medicare benefits. Let’s dive into what they could mean for you.

Changes to Taxes

The OBBBA introduces several tax adjustments that impact retirees:

  • Increased Standard Deduction: The OBBBA permanently increases the standard deduction, which was set to expire at the end of 2025. When it comes to lowering individual tax bills, most taxpayers choose the standard deduction because it’s more simple than itemizing. With the OBBBA increase, choosing the standard deduction might increase your spendable income, allowing you to keep more of your money, but individual circumstances will determine if that’s possible.
  • Senior Bonus Deduction: Available for tax years 2025 through 2028, a new senior bonus deduction will help offset Social Security taxes. This change provides additional relief for retirees, potentially resulting in significant savings. The deduction allows individual taxpayers 65 and older to claim up to $6,000 or up to $12,000 for joint filers, whether they itemize or not.
  • Charitable Deduction for Nonitemizers: Starting in 2026, taxpayers who claim the standard deduction — not just those who itemize their taxes — can benefit from an above-the-line deduction for cash gifts to public charities. This addition encourages charitable giving while offering tax benefits and goes into effect in 2026.
  • Estate and Gift Tax Exemption: The bill permanently increases the federal estate and gift tax exemption amount, which could be beneficial if you’re planning to pass on wealth to your heirs.
  • Pass-Through Business Deduction: For those with pass-through business income, the 20% deduction is extended permanently, providing ongoing tax relief.

Changes to Medicare

One of the most consequential impacts of the legislation involves health insurance for people under the age of 65 — namely, those relying on Medicaid, the joint federal and state program that provides health coverage to millions of low-income Americans, and those receiving subsidies to buy plans through the Affordable Care Act’s state and federal health marketplaces. Compared to those changes, the bill’s impact on Medicare is minimal. However, it’s important to be aware of several changes to Medicare, including:

  • Medicare Physician Fee Schedule: In 2026, there will be a 2.5% increase in the Medicare Physician Fee Schedule, potentially affecting the reimbursement rates for health care providers and, subsequently, your access to services. The increase, which comes after five years of cuts, is widely viewed as an incentive for doctors to continue to provide Medicare. But because the OBBBA only increases payments for one year, some organizations like the American Medical Association are calling for more systemic Medicare physician payment reform to ensure the sustainability of physician practices, especially in rural areas where access to health care is limited.
  • Eligibility Changes: The bill eliminates Medicare eligibility for some individuals with lawful immigration status who have paid into the program. This change may not affect many, but it's essential to stay informed if it applies to you or your loved ones.
  • Long-Term Care Staffing Moratorium: A 10-year moratorium (through fiscal year 2034) on the implementation, administration, or enforcement of the minimum staffing levels in long-term care facilities may impact the quality of care in these environments.
  • Rural Hospital Stabilization Fund: The OBBBA establishes a $50 billion fund that aims to stabilize rural hospitals. The law provides $10 billion per year through the rural health fund for fiscal years 2026 through 2030, a five-year period.

Because the OBBBA is so far-reaching, the implications remain to be seen. If you need assistance in understanding how the legislation may impact you, contact your Licensed Insurance Agent at Insuractive®. If they are unable to assist you, they can connect with a retirement planning advisor or another professional who can.



Not connected with or endorsed by the United States government or the federal Medicare program. The insurance services described on this website are provided by Insuractive, a Nebraska resident agency. Insuractive is also licensed as a non-resident insurance agency, or otherwise authorized to transact business as an insurance agency, in all states and the District of Columbia. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.

Please note that neither Insuractive nor any agents acting on its behalf should be viewed as providing legal, tax or investment advice. Consult with and rely on your own qualified adviser.

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