On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law by President Donald Trump. This law brings changes to taxes, Medicare, and healthcare programs across the country. Many of these changes may directly affect older Americans, especially those on Medicare. 

If you're 65 or older, here’s what you need to know about how the new law could help—or hurt—you. 

The Pros 

1. New tax deduction for seniors 

If you’re 65 or older, you may now deduct up to $6,000 from your income when filing your taxes. If you’re married and filing together, you can deduct up to $12,000. 

This deduction applies to all income, including Social Security, retirement income, and even part-time work. 

What it may mean for you: 
This could reduce your taxable income, which might lower the amount of tax you owe each year. 

[Please note: This deduction begins to shrink if you make more than $75,000 (or $150,000 for couples), and you won't be able to take advantage of this tax break if your income is above $175,000 (or $250,000 for couples).] 

2. More support for telehealth 

The new law makes it easier for seniors to use telehealth services. If you see your doctor by phone or video, your health plan may now cover the visit without requiring you to pay your full deductible first. 

What it may mean for you: 
This can save you money and help you get care more easily, especially if you live far from a doctor or have trouble traveling. 

3. Funding for rural hospitals 

Some small-town and rural hospitals are struggling to stay open. This new law provides extra funding to help them keep their doors open. 

What it may mean for you: 
If you live in a rural area, this could help protect your access to care nearby. 

4. No tax on Social Security for many seniors 

Thanks to the new deduction, more than 88% of Social Security recipients will now owe no federal tax on their benefits. 

What it may mean for you: 
That means more money may stay in your pocket, especially if Social Security is your main source of income. 

5: Tax deduction for car loan interest 

If you buy a car that was made in the U.S. and take out a loan, you may now be able to deduct up to $10,000 per year in interest payments from your federal taxes. 

What it may mean for you: 
If you’re financing a new car, this could lower your taxable income and help you save money at tax time. 

[Please note: This only applies to loans (not leases or cash purchases), and your income must be under $150,000 (or $300,000 for couples).] 

The Cons 

1. Medicare spending is being cut 

The new law includes cuts to Medicare spending starting in 2026. At this point, we don’t know the effect of how much will be covered and which services will be available. 

What it may mean for you: 
You may see higher premiums, fewer plan choices, or reduced services in the future—especially if you're enrolled in a Medicare Advantage plan. 

2. Medicaid changes could affect long-term care 

The law also includes big cuts to Medicaid, the program that helps low-income people with healthcare. Many seniors use Medicaid to help pay for nursing homes or long-term care. 

What it may mean for you: 
If you depend on Medicaid for care—or may in the future—these changes could lead to reduced access or longer wait times for services. 

3. Fewer energy-efficiency savings 

The bill ends some tax credits for things like solar panels or energy-saving appliances. 

What it may mean for you: 
If you're a homeowner looking to reduce your energy bills or upgrade your home, you may now get less financial help. 

4. Tax deduction is temporary 

The senior tax deduction only lasts through 2028. Unless Congress renews it, the benefit will go away after that. 

What it may mean for you: 
This is a short-term savings opportunity. It's important to plan ahead and understand that it may not last. 

What do you need to do now? 

There isn’t anything you need to do right now, but you should check your income to see if you qualify for the new tax deduction. You can watch for updates in 2026 and beyond, as more changes roll out. 

OBBB may bring both helpful tax breaks and healthcare support, but also cuts to programs many seniors rely on. If you're 65 or older, you may benefit from lower taxes and better access to telehealth. But you should also be aware of possible future changes to Medicare and Medicaid. 

Another thing to note: this law is not permanent—some parts expire in 2028. That’s why staying informed is the best way to make smart choices for your health and finances. 

[Please note: this article is current as of August 13 and is for informational purposes only.] 

Additional resources 

• irs.gov: https://www.irs.gov/newsroom/one-big-beautiful-bill-act-tax-deductions-for-working-americans-and-seniors 
• ssa.gov: https://www.ssa.gov/news/press/releases/2025/#2025-07-03