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Rachel V Thomas

Trump Administration To End Medicare Part D Subsidies, Raising Drug Costs for Millions of Elderly Americans

The Donald <span>Trump administration</span> plans to end <span>Medicare Part D</span> premium subsidies after 2026, ending a program that has helped keep prescription drug plan premiums stable, according to the Centers for <span>Medicare</span> &amp; <span>Medicaid</span> Services (CMS).

The decision could affect millions of Americans, particularly those aged 65 and older, who may face higher prescription <span>drug costs</span> beginning next year.

The CMS said its review of insurers' 2027 bids found that health plans now have sufficient experience to accurately price Medicare Part D plans without government support, according to The Wall Street Journal.

<h2>Subsidy Program to End After 2026</h2>

The program, to end after 2026, provides insurance companies with an estimated $3.6 billion in subsidies this year to limit premium increases for Part D plans.

"We are stabilizing the market so this bailout is no longer needed. Premiums will go up by less than $10 for most ⁠Medicare recipients, with many even seeing lower premiums," CMS Administrator Dr. <span>Mehmet Oz</span> said in a post on X.

"Every Medicare beneficiary still has access to low-cost plans, and we will continue to lower prescription drug prices for every American patient, from more MFN deals to our policy giving seniors access to GLP-1s for $50 a month,” he added.

Around 25 million Americans enrolled in traditional Medicare have stand-alone Part D prescription drug plans, paying an average monthly premium of $36, according to KFF. 

Another 31 million beneficiaries receive prescription drug coverage through Medicare Advantage, the privately managed alternative for people aged 65 and older.

The previous Biden administration had introduced the subsidy program ahead of the 2024 presidential election to offset policy changes that would have sharply increased Medicare Part D premiums in 2025.

Dr Oz said that the Biden administration’s approach was “unacceptable” and that it “gave BILLIONS of taxpayer money DIRECTLY to Big Insurance Companies.”

<h2>Uncertainty Over Premium Increases</h2>

However, it remains unclear how many beneficiaries will pay more or how large those increases will be. Premiums vary by plan, and beneficiaries will have an opportunity to compare and switch coverage during this fall's enrollment period. CMS said premiums for individual plans will be released in September.

AHIP, a major trade group representing health insurers, said it is reviewing the announcement, the New York Times reported. 

“At a time of sharply rising prescription drug costs, health plans are focused on keeping Part D coverage and benefits as affordable as possible,” said Chris Bond, a spokesman, in a statement.

A Trump administration official told Bloomberg that the majority of older Americans will see no increase in premiums or may even pay less.

<h2>CMS Releases Preliminary 2027 Part D Details</h2>

CMS also released preliminary information on 2027 Medicare drug plan bids. The national average monthly bid amount, used to calculate government subsidies for plans, will be $296.05 in 2027.

The agency said the national base beneficiary premium for Medicare Part D will be $41.33 next year. Annual increases will remain capped at 6% through 2029 under provisions of the Inflation Reduction Act.

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The Donald Trump administration plans to end Medicare Part D premium subsidies after 2026, ending a program that has helped keep prescription drug plan premiums stable, according to the Centers for Medicare & Medicaid Services (CMS).The decision could affect millions of Americans, particularly those aged 65 and older, who may face higher prescription drug costs beginning next year.The CMS said its review of insurers' 2027 bids found that health plans now have sufficient experience to accurately price Medicare Part D plans without government support, according to The Wall Street Journal.Subsidy Program to End After 2026The program, to end after 2026, provides insurance companies with an estimated $3.6 billion in subsidies this year to limit premium increases for Part D plans."We are stabilizing the market so this bailout is no longer needed. Premiums will go up by less than $10 for most ⁠Medicare recipients, with many even seeing lower premiums," CMS Administrator Dr. Mehmet Oz said in a post on X."Every Medicare beneficiary still has access to low-cost plans, and we will continue to lower prescription drug prices for every American patient, from more MFN deals to our policy giving seniors access to GLP-1s for $50 a month,” he added.Who Could Be Affected?Around 25 million Americans enrolled in traditional Medicare have stand-alone Part D prescription drug plans, paying an average monthly premium of $36, according to KFF. Another 31 million beneficiaries receive prescription drug coverage through Medicare Advantage, the privately managed alternative for people aged 65 and older.The previous Biden administration had introduced the subsidy program ahead of the 2024 presidential election to offset policy changes that would have sharply increased Medicare Part D premiums in 2025.Dr Oz said that the Biden administration’s approach was “unacceptable” and that it “gave BILLIONS of taxpayer money DIRECTLY to Big Insurance Companies.”Uncertainty Over Premium IncreasesHowever, it remains unclear how many beneficiaries will pay more or how large those increases will be. Premiums vary by plan, and beneficiaries will have an opportunity to compare and switch coverage during this fall's enrollment period. CMS said premiums for individual plans will be released in September.AHIP, a major trade group representing health insurers, said it is reviewing the announcement, the New York Times reported. “At a time of sharply rising prescription drug costs, health plans are focused on keeping Part D coverage and benefits as affordable as possible,” said Chris Bond, a spokesman, in a statement.A Trump administration official told Bloomberg that the majority of older Americans will see no increase in premiums or may even pay less.CMS Releases Preliminary 2027 Part D DetailsCMS also released preliminary information on 2027 Medicare drug plan bids. The national average monthly bid amount, used to calculate government subsidies for plans, will be $296.05 in 2027.The agency said the national base beneficiary premium for Medicare Part D will be $41.33 next year. Annual increases will remain capped at 6% through 2029 under provisions of the Inflation Reduction Act.

trump administration to end medicare part d subsidies, raising drug costs for millions of elderly americans

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