The Trump administration plans to end a temporary program designed to stabilize premiums for Medicare Part D prescription drug plans after 2026.
The Centers for Medicare & Medicaid Services says insurers have gained enough experience with the program to price their plans without continued federal support.
CMS Administrator Dr. Mehmet Oz said the change should not lead to major increases for most beneficiaries.
The agency expects premiums to rise by less than $10 for most Medicare recipients, although the impact will vary depending on the plan and location.
Medicare Part D is a major source of prescription drug coverage for older Americans and people with disabilities.
About 56 million people were enrolled in Part D plans in early 2026, including nearly 25 million in standalone prescription drug plans.
Medicare Part D Premiums Face Changes in 2027
CMS has also released preliminary figures for 2027.
The national average monthly bid amount is projected at $296.05, while the national base beneficiary premium is expected to be $41.33 per month.
Final 2027 Medicare Advantage and Part D premiums and plan details are expected in September.
The decision comes as Part D faces wider cost pressures.
The program has undergone major changes under the Inflation Reduction Act, including a $2,100 annual out of pocket cap for covered prescription drugs in 2026.
At the same time, insurers have faced higher costs under the redesigned benefit, contributing to changes in deductibles and cost sharing across plans.
The end of the Medicare Part D premium subsidy will therefore be closely watched by beneficiaries, insurers and policymakers.
While the administration expects the market to remain stable, the real effect will become clearer when insurers release their 2027 plans and premiums later this year.
For millions of Americans who depend on Medicare for prescription drug coverage, the change could mean different premiums depending on their plan.
The upcoming 2027 enrollment period will show whether the administration’s decision results in only modest increases or creates larger differences between individual plans.
