Trump Administration Ends Medicare Part D Subsidy, Leading to Higher Premiums for Most Seniors
The Trump administration has decided to end the $3.6 billion Medicare Part D Premium Stabilization Demonstration program after it expired at the end of the 2026 plan year. This move will result in higher prescription drug premiums for approximately 75% of roughly 25 million Medicare beneficiaries starting in 2027, with about 45% facing increases between $11 and $20 per month. The subsidy had helped keep average standalone Part D premiums around $36 a month. Without it, the base premium is projected to rise to $41.33 by next year. The decision removes financial support that private insurers relied on for profitability during the transition period under the redesigned Medicare benefit structure from the Inflation Reduction Act. The 2027 enrollment season will be a critical test of whether healthcare insurers can maintain membership and profit margins without federal assistance, as beneficiaries receive their new premium notices this fall. While some seniors may see no change or even lower premiums, most are expected to pay more.
Topics: drug premiums federal subsidies Medicare Trump administration