TO: Interested Parties
From: Rep. Lou Correa (CA-46)
DATE: August 14, 2025
RE: Is Social Security Changing? Here’s what to know.
Today marks the 90th anniversary of Social Security–America’s promise that if you work hard, you will be able to retire comfortably–being signed into law. 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 I 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.
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The deduction will have less of an impact on lower-income seniors because the standard deduction wipes out most of their tax liability.
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Middle income seniors stand to benefit the most.
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Those making up to $75,000 in income (or $150,000 for joint filers) can see the full benefit. But it will phase out at a 6% rate for incomes above this rate.
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Nearly half of Americans aged 65 or older will NOT benefit because of their income levels.
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Taxpayers and their spouses would have to provide their Social Security numbers to claim the deduction.
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These benefits will sunset after four years.
TAXES ON SOCIAL SECURITY
Federal income taxes have not been eliminated on Social Security benefits.
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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.
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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
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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
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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.
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It terminates Medicare coverage no later than 18 months from enactment for anyone who is currently covered but no longer eligible under these changes.
Medicare Savings Programs
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In September 2023, the Biden administration issued a final 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.
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The law prohibits provisions from this rule that have not already gone into effect from being implemented or enforced until October 1, 2034.
Medicare Physician Fee Schedule
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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
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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.
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The law carves out orphan drugs, which are medications for rare disease, from Medicare drug price negotiations.
Nursing Home Staffing Final Rule
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A 2024 Biden administration final rule 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).
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The law prohibits the Secretary of Health and Human Services from implementing, administering, or enforcing the minimum staffing levels required by the final rule until October 1, 2034.
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
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In November 2024, the updated premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs were announced, along with the 2025 Medicare Part D income-related monthly adjustment amounts.
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More information can be found here.
Medicare Part A
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The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will be $1,676 in 2025, an increase of $44 from $1,632 in 2024.
Medicare Part B
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The standard monthly premium for Medicare Part B enrollees will be $185.00 for 2025, an increase of $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries will be $257 in 2025, an increase of $17 from the annual deductible of $240 in 2024.
2026 Medicare Advantage Rates
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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.
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.
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