When Budgets Meet Bedside: How Medicare & Medicaid Cuts are Reshaping Hospice Care
This article discusses the impact of Medicare and Medicaid cuts on hospice care, exploring uncertainties and providing solutions during a difficult time.
Table of Contents
- Introduction
- The Big Beautiful Bill and Its Impacts on Medicare
- Impacts on Medicaid
- The Impact of Medicare and Medicaid Cuts on Hospices
- What Can Hospices Do to Thrive and Stay Afloat in the Face of Medicaid and Medicare Cuts
- FAQs
- Additional Resources
Key Takeaways
- Trump’s Big Beautiful Bill cuts funding and restricts eligibility for Medicare and Medicaid, both of which are popular choices for hospice insurance coverage.
- Hospice facilities may be impacted by fewer referrals, more denials, and difficulties with staffing and recruiting.
- Providers can reduce the impact by seeking out alternate funding sources, streamlining approval processes, focusing on staff retention, firming up partnerships, and advocating against the new policies.
Impact of Medicare and Medicaid Cuts on Hospice Care
Trump’s Big Beautiful Bill went into effect on July 4, 2025. It contains hundreds of provisions, but select health care workers are concerned about the impact of Medicare and Medicaid cuts on hospice care. It could lead to a loss of referral partners, financial strain, recruitment issues, pauses in oversight programs, and an overall increase in national debt. Hospice facilities throughout Los Angeles and Orange County are among those navigating these challenges.
Hospice workers are rightfully concerned, but with the right strategies, they can work around these issues and weather the storm. This article provides more information about the BBB, its impacts on Medicare, Medicaid, and hospice care, and possible solutions.
The Big Beautiful Bill and Its Impacts on Medicare
Medicare is the primary health insurance for adults age 65 and over. It also covers individuals with end-stage diseases, including hospice care. According to CMS.gov, 69.3 million people were enrolled in Medicare as of August 2025.
The BBB brought several changes to Medicare. Here’s what’s happened so far.
Restrictions on Eligibility
Under the new law, to be eligible for benefits as a retiree, you must be 65, you must have worked in the U.S. for at least 10 years, and you must have been a legal citizen or U.S resident for at least five years. This eliminates eligibility for some immigrants, including refugees, asylum seekers, and those with Temporary Protected Status.
Delayed Rules for Low-Income Enrollees
The BBB delayed two finalized rules that would have facilitated enrollment for very-low-income enrollees until October 1, 2034.
Potential Future Cuts
Depending on congressional action, the bill may generate an estimated $490 billion in Medicare cuts between 2027 and 2034 due to the statutory pay-as-you-go law.
Expansion of the Drug Price Negotiation Program
On a positive note, the administration announced an expansion of the Inflation Reduction Act’s drug price negotiation program to include Medicare Part B drugs.
No Medicare for Obesity Drugs:
The administration decided not to move forward with legislation that would allow Medicare to cover obesity drugs.
Medicare Advantage and Part D
Stricter rules for these programs might lead to fewer benefits. For example, the monthly premium for Medicare Advantage plans is expected to increase to $12.91, while perks like grocery cards and free or reduced-cost transportation might be eliminated.
Job Cuts
The budget cuts are expected to lead to significant job losses. A recent study published in the JAMA Health Forum projects that 302,000 jobs will be lost each year through to 2034.
Increasing Premiums:
Although there may be decreases in drug costs, premiums will rise as follows:
- Part B premium to increase by about $206.50 per month by 2025
- Part D deductible- the maximum will rise to $615 in 2026 from the previous $590
- Part D out-of-pocket cap: The out-of-pocket cap on prescription drugs will be $2100 in 2026.
Impacts on Medicaid
While Medicaid is not as focused on the elderly as Medicare, it provides services for the terminally ill in various age groups. Additionally, it is the primary payer for long-term care services covering home and community-based care for 7.8 million Americans and 1.5 million nursing homes across the country. The BBB threatens the following impacts:
Possible Cuts to Medicaid
Republicans want to cut funding to the program to reduce federal spending. Medicaid also funds hospice care, leading to an even greater impact on the industry.
New Qualifications
Under the new ruling, people 19-64 will need to work at least 80 hours a month to qualify for Medicaid. It does not explain how people with dependent children or disabilities will qualify.
Out-of-Pocket Fees
Beginning in October 2028, adults with incomes between the poverty level and 138% of that level will be required to pay a $35 out-of-pocket fee for Medicaid assistance, making access difficult.
Job Loss
The lack of funding will lead to job loss. Although there is no projected number of jobs lost through Medicaid cuts specifically, A Kip Linger article estimates a loss of 477,000 healthcare jobs by 2029.
The Impact of Medicare and Medicaid Cuts on Hospices
So, what does this mean for hospice workers? Although we have yet to see the full impact of the bill, things don’t look so great. Here are some possible impacts.
Loss of Referral Partners
Medicare and Medicaid cuts also affect hospitals and long-term care facilities, which hospices count on for referrals. If those facilities close, it could lead to decreased patient intake.
Reduced Access to Care
This issue will work both ways, as fewer people will be able to afford care. Additionally, hospices may not be in an ideal position to provide care due to staffing cuts and possible closures.
Changes to Oversight
The Trump administration previously suspended the hospice Special Focus Program, which was designed to identify poor-performing hospices and mandate quality improvements, raising concerns about fraud and abuse in the industry. Things could get worse as hospices will have even less of a budget to provide supervision and purchase effective equipment.
More Denials
The new ruling limits access to care and requires more intensive documentation, meaning even people who should qualify may get denied. This also leads to more administrative work for hospice workers.
Difficulty with Recruitment
The shift means many hospice workers will leave the industry, and it will be difficult to find workers to replace them.
Although the Centers for Medicare & Medicaid Services (CMS) has proposed a modest rate increase of 2.4% for 2026, this could be overshadowed by a sequester threat triggering an additional 4% potentially resulting in a total 6% cut to Medicare payments if not waived.
What Can Hospices Do to Thrive and Stay Afloat in the Face of Medicaid and Medicare Cuts
The Big Beautiful Bill is not so beautiful for hospices and hospice workers, but certain strategies can help them stay afloat during difficult times. Los Angeles and Orange County hospice providers may find the following approaches particularly useful:
Protecting Direct Hospice Revenue
The cuts threaten various healthcare institutions, but hospices have an advantage as federal law established mandatory minimum payment requirements that states must meet to fund their facilities. Once payers and stakeholders understand that hospice offers a mandated benefit that serves a vulnerable population, they may have more faith in the system.
Tighten Eligibility Documentation to Reduce Denials
With increased regulatory burdens, hospices will find themselves dealing with more administrative burdens and denials. They can avoid this by strengthening internal audit processes and by creating a denials team to overturn claim rejections quickly.
Track Metrics to Gain Funding from Alternative Sources
Hospices that demonstrate value and show good performance metrics may qualify for grants and donations. Tracking metrics can help facilities prove they deserve additional funding.
Prepare for Patient Losses
Patient losses may occur due to limited eligibility. However, hospices can diversify their target audience by connecting with those with Medicare FFS, Medicare Advantage, and employee-sponsored programs. They can also develop a billable palliative care service line under Medicare Part B to communicate with patients before they reach the hospice stage.
Focus on Staff Retention
Hospices may not be able to offer their workers much in terms of pay, but they can focus on retention by producing a more pleasant work environment, taking steps to mitigate burnout, and providing a competitive benefits package, considering workers may be losing their insurance, too.
Strengthen Referral Partnerships
Referring facilities may close as well. However, Southern California hospice providers can strengthen these relationships by working with at-risk facilities and establishing clear pathways for patients with advanced-stage diseases. Offer education, in-service training, and easy referral channels to solidify bonds.
Advocate for Policies That Prevent Medicare Cuts
Hospice workers can advocate against Medicare and Medicaid cuts by contacting elected officials and urging them to oppose the new legislation that protects existing programs. They may join industry and advocacy groups to leverage their resources and make their voices stronger. Raising public awareness also helps.
“The future for hospice and palliative care organizations is to keep their eye on quality, safety, and making sure access is open, including for those who might have their health care change in the bill that just passed because of their ability to get consistent, reliable, and supportive care- those community resources might very well go away.”
Nancy Littlefield, president and CEO, Virginia-based Hospice of the Piedmont, in the article “Unknown, Chaotic, Crisis, Hospice Leaders Reflect on Trump’s Big Bill
Action Guide for Hospice Workers
| Pressure Points for Hospices | Symptoms | Practical Actions |
| Fewer referrals | Long-time partners are sending fewer referrals; patients are only referred in the final days or hours | Visit top referrers, explaining what’s changed, how to deal with it, and provide guidelines for easy & fast referrals |
| More denials and a demand for additional documents | Spike in denials, longer time to payment, clinicians are unsure of what’s required | Run document training and refreshers, simplify approval processes, and form a team to specifically deal with these issues |
| Tightening margins and cash flow restraints | Delayed payments to vendors, need for more credit lines, and more time spent on budgeting | Clean up AR and focus on common billing errors, negotiate big contracts, trim non-essential spending |
| Staff burnout, difficulty recruiting, and retaining talent | Open positions are unfilled, increased turnover, call-outs, and low morale | Add flexible scheduling, offer small but meaningful retention perks, and provide peer support for complex cases |
| Pressure to cut visit frequency and rely on telehealth | Pressure to do more with less, families feel unsupported and anxious, and staff are unsure when telehealth is appropriate | Write clear guidelines explaining when telehealth is needed and how to run effective visits, and give families clear guidelines on what to expect |
| Community partnerships downsizing or closing | Local clinics are closing or reducing services, and there are fewer community resources | Map which services are available, create an updated resources list for social workers and families, and hold meetings with at-risk partners to plan transitions |
| Policy changes are creating confusion and fear | Staff anxious about job security and changing rules, families asking more questions about coverage and eligibility, mixed messages from social media | Hold staff meetings explaining policy updates, designate a team to train others, and prepare simple talking points for families |
| Need for new funding streams | Traditional revenue failing, grants & donations not keeping pace with needs | Capture and share quality metrics, identify potential add-on services, and ask local foundations and donors for support |
Hospices may consider themselves lucky as ‘mandatory minimum payment requirements’ protect them somewhat. However, the real threat is indirect. As many as 300 rural hospitals may close, impacting referrals, while patients can lose coverage for support services and personal care that hospices depend on to function. This is especially concerning in Southern California, where many families rely on community-based support services to supplement hospice care.
Hospice Workers- Opal Cremation is On Your Side
Opal Cremation has worked closely with Los Angeles and Orange County hospice facilities for years, and we would hate to see them suffer. We provide support through education, online resources, workshops, and in-house visits. Our team wants you to understand your options.
Please reach out to us to book a visit, request a package, or join one of our webinars. We would love to get a chance to help you learn more about surviving healthcare cuts and the other useful resources we offer.
Our team can also explain more about afterlife care and our Los Angeles direct cremation services. We have everything you need to guide your patients through this transition, without hidden fees, unwanted surprises, and additional family burden.
Call us at 888-968-2299 or reach out online to schedule our services today.
FAQs
Who is eligible for hospice?
Anyone with a life expectancy of six months or less if the disease runs its course and is certified by two clinicians, and who elects the hospice benefit, is eligible for care.
What does Medicare’s hospice benefit cover?
Medicare’s hospice benefit covers interdisciplinary team care, medications and supplies, durable medical equipment, four levels of care, including routine and general home care, general inpatient, and inpatient respite, and 24/7 bereavement support to families after the death.
How could cuts affect visit frequency or staffing?
The cuts may cause hospices to tighten visit schedules, rely more on telehealth, and experience staff shortages.
Could payment caps or audits influence admission or length of stay?
Yes, the annual Medicare hospice’ aggregate cap’ can make some hospices reluctant to admit patients expected to live longer, or they may be more likely to review eligibility frequently. Patients who meet the criteria should still be admitted and recertified, provided they meet the quality standards.
What happens if my hospice says I’m no longer eligible?
If the hospice says you are no longer eligible, you can request a detailed explanation and supporting documentation. Ask for an expedited review if applicable. Contact your state’s Beneficiary and Family-Centered Care-Quality Improvement Organization (BFCC_QIO) or 1-800-MEDICARE for guidance. You may also seek a second opinion.
