The administration announced it will end a Medicare Part D premium-stabilization subsidy after 2026, meaning it disappears in the 2027 plan year. The subsidy pays insurers to hold down monthly premiums on Medicare's prescription-drug plans, which cover roughly 25 million people, most of them older adults or people with disabilities.
The program directed an estimated $3.6 billion this year toward reducing average monthly premiums by about $16. The Centers for Medicare & Medicaid Services, led by Administrator Mehmet Oz, framed the move as ending a subsidy that mainly benefits large insurance companies. Oz said, “Premiums will go up by less than $10 for most Medicare recipients, with many even seeing LOWER premiums,” and the administration estimates about half of Part D enrollees will see an increase of less than $10 or a decrease.
Health-policy analysts are less sanguine. KFF, a nonpartisan health-policy group, estimates the change could push premiums up by as much as $20 a month for some enrollees. The true effect will not be known until insurers set their 2027 rates this fall.
The honest framing is that this is a contestable policy call with a real defense, Oz's point about insurer subsidies is not nothing, but its direct effect lands on seniors' drug costs, from an administration that campaigned on lowering them (see Trump Falls Asleep on Camera in the Oval Office During His Own Drug-Pricing Announcement With the Regeneron CEO and RFK Jr.).