US to end Medicare Part D subsidies, risking higher 2027 premiums
Why it matters: About 23 million standalone Part D enrollees could face premium increases after a program expected to run through 2027 stops early.
The Trump administration is ending temporary subsidies that helped hold down Medicare Part D premiums, a move that could raise costs for millions of beneficiaries in 2027. The payments, created by the Biden administration under a demonstration project, were meant to cushion insurers as the 2022 Inflation Reduction Act shifted more drug costs onto plans while capping patients’ out-of-pocket spending at $2,000 starting in 2025. The Centers for Medicare and Medicaid Services estimated the subsidies would cost $9.8 billion in 2025 and 2026. A Government Accountability Office report said about 23 million people were enrolled in standalone Medicare Part D plans in 2025. KFF said the subsidies cut this year’s average standalone drug-plan premium by $16.