What Nobody is Telling You About the ‘Big Beautiful Bill’

The One Big Beautiful Bill Act of 2025,  President Trump’s marquee tax-and-spending package, may have a cheerful name, but for most Americans, it’s anything but beautiful. This 900-page legislation permanently extends the 2017 tax cuts and introduces a range of new deductions.

The broad outcome? 

Great for the rich and ultra-rich, terrible for the majority of Americans, damaging to the economy, and blowing up the national debt. 

Independent analyses conducted using the Penn Wharton School Model show the top 10% of earners reap about 80% of the bill’s total benefits, with the richest 0.1% seeing annual income boosts averaging over $290,000. 

Meanwhile, the economy is projected to shrink by 0.3% over the next decade as a result of this bill, and federal deficits are expected to soar by roughly $4.3 trillion during that period. In short, the wealthy are partying, while the country foots the bill in slower growth and staggering debt.

Smoke and Mirrors for Middle-Class Taxpayers

Republican leaders are already hailing the bill as a big win for “regular folks.” Don’t buy it. Aside from the permanent extension of prior tax cuts (which primarily benefit higher earners), the Big Beautiful Bill throws only a few modest bones to average households, and even those are mostly temporary and minimal. 

Here are some of the touted perks for working Americans, which the GOP claims will help middle-class families:

“No Tax on Tips” (2025–2028)

Tipped employees (like restaurant servers) can deduct the tips they earn – potentially up to $25,000 of tip income – from federal taxes. But in reality, very few will ever hit that cap. The average U.S. waiter earns only about $36,530 a year (salary plus tips), so most tipped workers might save at most a couple of hundred dollars on taxes. It’s a negligible benefit that ends after 2028.

“No Tax on Overtime” (2025–2028)

Workers earning overtime pay can deduct their extra overtime wages (up to a certain amount, such as $12,500) from their taxable income. Again, this sounds nice but provides little savings for the typical worker, and it also expires in 2028.

Auto Loan Interest Deduction (2025–2028)

The bill allows deducting up to $10,000 in interest on new car loans. Few middle-class families pay that much interest in a year, and this break is also temporary.

Slightly Higher Standard Deduction for Seniors

Older taxpayers receive an additional standard deduction (approximately $4,000–$6,000 per senior) through 2028, a modest measure aimed at easing the tax burden on Social Security income. It helps a bit, but certainly doesn’t offset what seniors may lose elsewhere (as we’ll see below).

All of these goodies sunset after 2028, meaning they’ll vanish in a few years. For most working families, the actual dollar impact of these provisions is negligible, especially when compared to the substantial, permanent tax cuts bestowed on top earners and wealthy business owners. The bill’s “big benefits for regular folks” are largely an illusion.

A Hidden Consequence: Threat to Seniors’ Nursing Home Care

Amid all the debate on taxes and deficits, one critical consequence of the Big Beautiful Bill has been under-reported in the media: its impact on seniors who depend on Medicaid to afford nursing home care. 

“Medicaid covers 63% of long-term nursing home residents.”

Unfortunately, the new bill’s massive spending cuts put this safety net at serious risk, potentially upending the lives of vulnerable seniors, now, or in the future. 

Deep Medicaid Cuts

To help “pay for” its tax giveaways, the bill slashes federal spending on programs like Medicaid by roughly $1 trillion over the next decade. It achieves this through measures such as imposing work requirements and tightening Medicaid eligibility, among other cuts.

According to the Congressional Budget Office, these changes will cause millions of low-income Americans to lose Medicaid coverage, and many of those affected will be older adults in need of long-term care. 

Medicaid isn’t just a health insurance program for the poor; it’s also the primary funder of long-term nursing home stays for seniors once their savings are exhausted. Again, about 63% of long-term nursing home residents are covered by Medicaid.

Most facilities rely on Medicaid reimbursements for the majority of their patients. Already before this law, Medicaid was underpaying nursing homes – nearly two-thirds of providers say Medicaid pays less than 80% of actual care costs. 

Nursing Homes on the Brink

A recent nationwide survey by the American Health Care Association (the nursing home industry group) found that if these Medicaid reductions go into effect, over one-quarter of nursing home operators say they would likely be forced to close their facilities. 

“That’s 1 in 4 nursing homes potentially shutting their doors.”

Picture the fallout – thousands of elderly residents evicted or displaced, families scrambling to find any open bed for mom or dad (possibly hours away in another county or state), and hardworking nursing aides and staff out of jobs. 

Even among facilities that stay open, more than half say they’ll have to reduce the number of Medicaid-funded beds (meaning they’ll accept fewer low-income seniors). In practice, that could mean long waiting lists for nursing home slots or seniors being turned away if they can’t pay privately.

This crisis isn’t some distant hypothetical; it would hit home fast. 

Nursing home care is astronomically expensive: the median cost of a semi-private nursing home room is about $9,277 per month, or roughly $111,000 a year, and a private room averages $10,646 per month. 

Private long-term care insurance is held by only ~3–4% of Americans over 50. The default plan for millions of middle-class families is therefore to rely on Medicaid if an elder’s health declines and nursing care is needed. 

Under current rules, seniors often must “spend down” their assets to qualify for Medicaid – essentially going broke to get care. But at least Medicaid has been there as a backstop. Now, with funding cuts and stricter rules, that backstop is fraying.

Families and Futures at Risk

The human toll of these cuts is heartbreaking. Many of us have stories of a parent or grandparent in a nursing facility – we know the relief of having Medicaid step in when personal funds run dry. With this bill, I fear more seniors will deplete their life savings and still find no safety net, or they’ll be cared for at home by overwhelmed family members because no facility will take them. 

We could see a resurgence of “spousal impoverishment”, where a healthy spouse at home is left destitute because nursing home bills drain the couple’s resources. We could also see an increase in bankruptcies or financial ruin among families trying to pay for care privately to keep a loved one in a decent facility.

Ultimately, the One Big Beautiful Bill is effectively putting nursing home care on the chopping block. This trade-off has received far fewer headlines than the flashy tax provisions, but it deserves attention—and outrage.

Solutions and Next Steps

From a personal finance perspective, the takeaway is clear: don’t be fooled by the hype around this bill. It’s not designed to help the average American household. In fact, it may hurt you indirectly by eroding public services (like Medicaid for elder care) that many families count on.

Start Planning Now

Start planning now for how you'd handle long-term care needs. You and your spouse need to have a conversation with your parents or grandparents. If you have siblings, they should be involved as well.

Having no plan is a plan for failure; it's a plan for loved ones to count on living with you in their final years. There's nothing wrong with wanting that or not wanting that. But failing to prepare for the new reality is a problem.

Given that so few people have long-term care insurance and Medicaid may be less reliable, you might consider exploring alternative strategies, such as setting aside dedicated savings, investigating life insurance policies with long-term care riders, or researching community resources.

Consider reaching out for guidance. I do not sell long-term care insurance, but I can provide you with expectations for costs, considerations, and help you pull together a new budget that reflects the changes caused by the passage of the One Big Beautiful Bill. 

Sources

1. Penn Wharton Budget Model – Senate-Passed Reconciliation Bill: Budget, Economic, and Distributional Effects budgetmodel.wharton.upenn.edubudgetmodel.wharton.upenn.edu

2. Bipartisan Policy Center – What’s in the 2025 House Republican Tax Bill (Tip and Overtime Tax Deduction Details)bipartisanpolicy.orgbipartisanpolicy.org

3. BLS – Average Waiter/Waitress Annual Income www.bls.gov/oes/2023/may/oes353031.htm 

4. Center for American Progress – $1 Trillion in Medicaid Cuts… (Medicaid cut estimates) americanprogress.orgamericanprogress.org

5. Verywell Health – Medicaid Look-Back Period (Medicaid as payer for 63% of long-term nursing home stays) verywellhealth.com

6. American Health Care Association – Press Release, June 2025 (Survey: 27% of nursing homes may close) ahcancal.org

7. KFF Health News / NYT – Why Long-Term Care Insurance Falls Short (LTC insurance held by only ~3–4% over 50) kffhealthnews.org