Medicare Part D Premium Subsidy Ends Early, Raising Concerns for Beneficiaries
The federal subsidy that helped keep Medicare Part D drug plan premiums low will cease on Jan. 1, 2027, prompting worries about higher costs for millions of enrollees.
An approximately $9.8 billion subsidy that limited premium growth for Medicare Part D standalone drug plans will end on Jan. 1, 2027, after the Trump administration decided to discontinue the Premium Stabilization Demonstration. The program, launched in 2024 to offset cost increases from the Inflation Reduction Act’s deductible caps, previously restricted premium rises to $35-$50 per year. While CMS expects most enrollees to face less than $10 extra in premiums, experts warn that some, like Ann Bush, a 70-year-old with diabetes and a kidney transplant, could confront higher co-pays and medication costs.
Open enrollment runs Oct. 15-Dec. 7, when plan sponsors will issue Annual Notices of Change; beneficiaries should scrutinize these notices for any shifts in formulary or cost-sharing. The subsidy’s end does not affect Medicare Advantage, Medigap, or the GLP-1 Bridge program, and the Low-Income Subsidy (Extra Help) remains intact. Stakeholders recommend using SHIP counseling or Medicare.gov to compare plans.
Why it matters
Ending the subsidy could raise drug-plan costs for millions of seniors and affect their ability to afford essential medications.
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