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Part D Subsidy Ends
The Trump administration plans to end a Medicare prescription drug plan subsidy that helped hold down premiums for Medicare drug plans, a move that could leave many seniors facing higher rates for their prescription coverage next year.
“monthly premiums on Medicare prescription drug plans, known as Part D, will increase by less than $10 for most enrollees”
The Centers for Medicare & Medicaid Services said it is ending the Medicare prescription drug plan subsidy implemented by the Biden administration to lower prices due to changes ushered in by the 2022 Inflation Reduction Act, and CMS Administrator Mehmet Oz said the subsidies were no longer necessary.
CMS officials said monthly premiums on Medicare prescription drug plans, known as Part D, will increase by less than $10 for most enrollees and some will see lower premiums.
The Wall Street Journal reported that the program is giving insurance companies an estimated $3.6 billion in subsidies this year and will end after 2026, while Reuters said the subsidies had been scrapped after Oz confirmed via social media.
CMS said it will release details in September on monthly premiums for Medicare prescription drug plans, and consumers can review and change plans during Medicare open enrollment, which runs from Oct. 15 through Dec. 7 for coverage that begins Jan. 1, 2027.
Who Pays More
As of February, about 25 million people were in a stand-alone Medicare Part D plan, often paired with traditional government-run Medicare insurance, and another 31 million were in a Medicare Advantage plan that typically includes prescription drug coverage.
A Trump administration official said the Inflation Reduction Act increased costs for prescription drug coverage, and the law imposed a $2,000 cap in 2025 on what Medicare enrollees paid out of pocket for prescription drugs that increased to $2,100 in 2026.
The demonstration project cost the federal government $9.8 billion in 2025 and 2026, and the Trump administration official said that if it had remained in place, one company, UnitedHealth Group, would have received a $1.5 billion.
KFF’s Juliette Cubanski said the demonstration project aimed to stabilize Part D premiums and enrollment amid the Inflation Reduction Act changes, and she said, "This temporary demonstration appeared to work as intended to stabilize year-over-year premium increases and enrollment."
Cubanski also said that with the demonstration project now ended, some Part D recipients "could see a larger premium increase for drug coverage next year than they've faced in recent years," as premiums vary among plans and enrollees shop during the fall open enrollment period.
GLP-1 Coverage and Politics
The CMS decision comes as Medicare began covering popular GLP-1 weight-loss medications for millions of enrollees under a pilot program on July 1, with older adults paying a monthly $50 copay and Medicare covering the rest.
“"We are stabilizing the market so this bailout is no longer needed."”
CMS Administrator Mehmet Oz said in a social media post announcing the policy change, "We are stabilizing the market so this bailout is no longer needed," as the agency said it would discontinue the Part D Premium Stabilization Demonstration at the end of this year.
The Anadolu Ajansı report said the program provides insurers about 3.6 milliards de dollars de subventions this year and will take fin après 2026, with about 25 millions de bénéficiaires de la partie D seeing their 2027 premiums in the fall.
Quartz reported that CMS said it expects to publish the final 2027 plan premiums in September, and it said the national average monthly bid will be $296.05 for next year with a national base beneficiary premium of $41.33 for 2027.
In a statement carried by Quartz, Kendall Witmer, spokesperson for the Democratic National Committee, said, "Republicans are doing everything possible to make healthcare unaffordable for Americans, especially seniors," while AHIP spokesperson Chris Bond said providers remain committed to making Part D coverage as affordable as possible despite rising drug costs.
