WASHINGTON, D.C. - As the Senate takes up the House-passed One Big Beautiful Bill Act (OBBBA), some lawmakers are considering a slate of Medicare reforms aimed at reducing waste, fraud, and abuse within the program, which analysts say can be achieved through specific reforms that are not tied to partisan agendas.

Democrats in the Senate have largely objected to any cuts to Medicaid or Medicare, accusing President Donald Trump and Republicans of trying to “gut access to lifesaving medication and rip away health insurance to fund tax handouts for billionaires.” This is what Democratic National Committee Chair Ken Martin said in a recent statement.

Meanwhile, Republicans are looking for ways to offset the OBBBA’s estimated $3 trillion net cost. U.S. Sen. Rand Paul, for example, has heavily criticized the bill and his fellow Republicans for supporting a debt ceiling hike and increased spending. "I think they're asking for too much money," he said. 

President Trump has urged members of Congress only to look for “waste, fraud, and abuse” within Medicaid and Medicare and not touch benefits, while US House Speaker Mike Johnson is asking the Senate only to make light changes to OBBBA so Congress can pass the Trump-backed bill by the July 4 break.

The Congressional Budget Office estimates that the version of the bill passed by the House would reduce spending on Medicaid by approximately $793 billion over 10 years, which includes the adoption of new work requirements and increased administrative red tape. Medicare is slated for $490 billion in cuts over the same time period.

Without cuts, Medicare—the federal health insurance program for people 65 and older and certain younger individuals with disabilities—is expected to cost $13 trillion over the next decade. However, approximately 66 million Americans are enrolled in Medicare and rely on it for their health coverage.

Is It Possible to Cut Spending without Risking Coverage?

Believe it or not, there is broad consensus that Medicare needs reform. In fact, modern presidents from both parties, including Barack Obama, Donald Trump, and Joe Biden, have all proposed measures to rein in Medicare costs, often centered on eliminating inefficiencies and curbing provider overpayments.

One of the most widely endorsed ideas is adopting site-neutral payments, a change that would eliminate the practice of Medicare paying significantly higher prices for services provided in hospitals versus the same service in a physician’s office. The disparities are stark: Medicare pays, on average, 125% more for identical services when performed in a hospital setting.

According to the Committee for Responsible Federal Budget (CRFB), this site-neutral payments reform has made it into multiple budget proposals and legislation across administrations, including in Obama’s final budget, Trump-era budgets, and the House-passed Lower Costs, More Transparency Act. as well as the Same Care, Lower Cost Act from Senator John Kennedy (R-La.) and a framework from Senators Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.).

The CRFB estimates that site-neutral payments could save more than $150 billion by 2034 and reduce patient premiums and cost-sharing by tens of billions more.

Another major area of focus is Medicare Advantage (MA), a private-plan alternative to traditional Medicare. Over the next decade, MA overpayments could total $1.2 trillion—about 14% of the program’s cost. These excess payments stem largely from “upcoding,” where insurers inflate enrollees’ reported health risks to boost government reimbursements.

The CRFB says reining in this practice could deliver immense savings. The NO UPCODE Act, introduced by Senators Cassidy and Jeff Merkley (D-Ore.), aims to prevent insurers from manipulating risk scores to increase payments. 

While the Trump administration did not originally target MA overpayments in its budget plans, former Trump Budget Director Russ Vought proposed over $100 billion in MA savings in late 2022. Both the Biden and Trump administrations have since pushed for stricter audits of MA plans to recover improper payments.

But Wait, There’s More… 

Beyond site-neutrality and MA reform, several other Medicare savings proposals have drawn support from both parties:

• Post-Acute Care Reform: Streamlining payments to rehabilitation, skilled nursing, and other post-acute facilities could generate significant savings.
• Graduate Medical Education (GME): Revising how hospitals and residency programs are reimbursed for training new doctors.
• Bad Debt Reimbursement: Capping or eliminating reimbursements to providers for unpaid patient bills.
• Hospice Payment Reform: Adjusting payments to reflect actual service costs and discourage misuse.
• 340B Drug Discount Oversight: Reducing overpayments to hospitals that profit from buying discounted drugs while billing Medicare at full price, potentially saving up to $75 billion over ten years.
• Medicare Part D Adjustments: Encouraging the use of generic drugs to reduce costs for both the program and beneficiaries.

CRFB estimates that, taken together, these changes could save up to $300 billion through 2034—savings that would preserve the integrity of the Medicare program without reducing benefits.

If These Reforms Have Bipartisan Support, What’s The Hold Up?

Entitlement programs are not easily reformed in Washington. There are plenty of special and monied interests who like to keep things a certain way, and the prospect of cuts, even if they aren’t harmful to enrollees, is politically dangerous. 

Each of these reforms may not be easily understood with members of the public who rely on these programs, so they will automatically reject anything that can be labeled as a cut to that program by partisan or special interest groups.

For example, proposals like site-neutral payments are technically aimed at hospital billing practices, not patients, but they’ve still been labeled as “Medicare cuts” in political messaging.

The immediate reaction from Democrats when Trump and Senate Republicans said they wanted to target “waste, fraud, and abuse” was to accuse them of saying that about the Medicare program at-large, even when every modern Democratic president has targeted Medicare “waste, fraud, and abuse.”

And while reports suggest the possibility of these reforms, there isn’t any guarantee they will be included in the final bill, especially when Republican leaders are pressuring their members to pass the bill as is or make little changes to it. 

Both sides have accused the other of wanting to hurt middle-class Americans. Republicans say Democrats want to raise taxes on workers, while Democrats say Republicans want to take away their health care. And as a result, the can gets kicked down the road a little further on changes both sides ultimately agree are needed.