The Centers for Medicare and Medicaid Services announced in a memo dated July 28 that it will end a program at the end of 2026 that has made prescription drugs more affordable for about 25 million Medicare Part D subscribers.
In July 2024, under President Joe Biden, the agency launched the Medicare Part D Premium Stabilization Demonstration, a voluntary program of subsidies for the standalone prescription drug plans that Medicare Part D subscribers can select to help pay for their medications. The demonstration program, designed to last for up to three years, provided a $15-a-month subsidy of subscriber’s premiums for calendar year 2025 and capped how much those premiums could go up each year at $35.
For 2026, the Trump administration reduced the monthly subsidy to $10 and allowed premiums to increase by up to $50.
Center for Medicare deputy administrator and director John Brooks announced in the memo: “For CY 2027, CMS analysis of the bids submitted indicates that Part D plan sponsors had sufficient experience under the redesigned Part D benefit to support their assumptions in developing prescription drug plan (PDP) bids. Therefore, CMS will discontinue the demonstration at the end of CY 2026 to return the program to operating under traditional market conditions in CY 2027.”
“The Biden admin gave BILLIONS of taxpayer money DIRECTLY to Big Insurance Companies. This is unacceptable,” CMS administrator Mehmet Oz posted on X on July 28. “We are stabilizing the market so this bailout is no longer needed.”
A Trump administration official told the Wall Street Journal that 30% of Medicare Part D subscribers would see their monthly bills go up less than $10 a month and that 45% would see an increase of between $11 and $20. The rest will not see a change or will see a decrease, they said.
According to Juliette Cubanski, vice president and director of the Program on Medicare Policy at KFF, “Without these extra subsidies in place for 2027, some Part D stand-alone drug plan enrollees could face a larger premium increase for drug coverage next year than in recent years, though plan-specific premium amounts are not yet known.”
During his 2024 campaign, President Donald Trump promised: “Starting the day I take the oath of office, I will rapidly drive prices down and we will make America affordable again. We’re going to make it affordable again.”
“Donald Trump and Republicans are making health care more expensive for seniors at every turn. In the middle of a GOP-induced affordability crisis, they are eliminating a key program that helps seniors afford their medications, meaning countless seniors will soon pay more just to get the life-saving prescriptions they need,” said Leslie Dach, chair of Protect Our Care, in a statement. “For older Americans living on fixed incomes, even an extra ten or twenty dollars a month can mean choosing between filling their prescription, paying the electric bill, or buying groceries. Seniors deserve lower prescription drug costs and affordable health care. Instead of lowering costs, Donald Trump and Republicans continue to force seniors to pay more while handing tax breaks to billionaires and big corporations.”
In an emailed statement, a CMS spokesperson said: “The Part D market is stabilizing following three years of disruption due to the Inflation Reduction Act redesign in plan years 2024, 2025, and 2026—this demonstration was always intended to be a temporary measure to address market instability. We understand that outside organizations without plan bid information have voiced concerns, however our data shows that plan bids have stabilized; among the roughly quarter of Medicare beneficiaries enrolled in plans the previous demo impacted, over 85% of beneficiaries will have access to a Part D plan that is either lower cost or less than a $10 increase next year.”
On Aug. 4, 50 Democratic members of Congress sent a letter to Oz urging him to reverse the termination of the program, writing: “The demonstration program has stabilized drug prices for nearly 25 million people and CMS’s decision to end the demonstration puts affordability at risk during a time where seniors continue to face rising costs. … Lower costs and a rise in covered individuals indicate that the demonstration is working. Despite this fact, CMS has chosen to terminate the program amidst a cost of living crisis.”
The White House press office did not immediately respond to a request for comment for this story.
