Medicare Cost Cap Act of 2026

Bill Number

S. 4886

Origin Chamber

Senate

Congress

119th Congress, Session 2

Status

Introduced

Latest Action

2026-06-24: Read twice and referred to the Committee on Finance.

Last Updated

2026-07-07T04:53:29Z

AI-Generated Summary

Medicare Cost Cap Act of 2026

Purpose This legislation amends the Social Security Act to cap annual out-of-pocket costs for Medicare fee-for-service beneficiaries and expand eligibility for assistance programs serving low-income Medicare enrollees, beginning in 2028.

Key Provisions

• Out-of-Pocket Cap: Establishes a new annual limit of $5,000 on cost-sharing (deductibles, copayments, and coinsurance) for covered Part A and Part B services starting in 2028; the limit adjusts annually based on growth in Medicare spending per beneficiary and rounds to the nearest $5.
• Cost-Sharing Relief: Once the annual limit is reached, beneficiaries pay no further out-of-pocket amounts for covered services that year; Medicare pays providers at full allowable rates.
• Eligibility Changes for Low-Income Programs: Removes the resource (asset) test for the Medicare Low-Income Subsidy (LIS) under Part D and the Medicare Savings Program (MSP) under Medicaid starting in 2028.
• Income Threshold Alignment: Raises the income eligibility limit for both LIS and MSP to 200 percent of the federal poverty level (from the current 150 percent for LIS and varying state levels for MSP).
• Automatic Cross-Enrollment: Requires bidirectional deeming so that full-benefit dual eligibles, SSI recipients, and certain MSP enrollees automatically qualify for LIS, and vice versa; states must treat SSA data as applications for MSP.

Significant Changes to Existing Law

• Adds Section 1899D to Title XVIII, creating a new Medicare out-of-pocket protection mechanism not previously present.
• Modifies Sections 1813, 1833, 1866, and 1842 to adjust payment rules and provider billing restrictions once the cap is met.
• Amends Sections 1860D-14, 1905(p), 1902, 1933, 1935, and 1144 to eliminate asset tests, raise income limits, and streamline eligibility determinations between Medicare and Medicaid programs.
• Changes effective dates apply prospectively from January 1, 2028.

Potential Impacts

• On Citizens: Reduces financial risk for Medicare beneficiaries facing high medical expenses; expands access to premium and cost-sharing assistance for individuals with incomes between 150 and 200 percent of the poverty line.
• On Government Agencies: Increases federal Medicare and Medicaid expenditures; requires new tracking systems by the Centers for Medicare & Medicaid Services (CMS) and coordination between the Social Security Administration and state Medicaid agencies.
• On International Relations: No direct effects identified.

Main Stakeholders Affected

• Medicare beneficiaries enrolled in fee-for-service coverage.
• Low-income individuals potentially eligible for LIS or MSP.
• Healthcare providers and suppliers billing Medicare.
• CMS, the Social Security Administration, and state Medicaid agencies responsible for eligibility and payment administration.

Notable Legal, Constitutional, or Political Implications The bill expands federal entitlements under the Social Security Act through amendments to existing Medicare and Medicaid authorities. It introduces administrative procedures for cost tracking and data sharing between federal and state agencies. No explicit constitutional challenges are addressed in the text.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Blunt Rochester, Lisa [D-DE]

Cosponsors (14)

Sen. Wyden, Ron [D-OR], Sen. Schumer, Charles E. [D-NY], Sen. Merkley, Jeff [D-OR], Sen. Luján, Ben Ray [D-NM], Sen. Markey, Edward J. [D-MA], Sen. Warren, Elizabeth [D-MA], Sen. Reed, Jack [D-RI], Sen. Duckworth, Tammy [D-IL], Sen. Welch, Peter [D-VT], Sen. Booker, Cory A. [D-NJ], Sen. Gillibrand, Kirsten E. [D-NY], Sen. Padilla, Alex [D-CA], Sen. Van Hollen, Chris [D-MD], Sen. Murray, Patty [D-WA]

Recent Actions

• 2026-06-24: Read twice and referred to the Committee on Finance.
• 2026-06-24: Introduced in Senate

Bill Versions

• Medicare Cost Cap Act of 2026 — issued 2026-06-24 — PDF (15 pages)