Trump administration ends Medicare Part D premium stabilization subsidy, potentially raising costs for millions of seniors

The Centers for Medicare & Medicaid Services (CMS) announced it will terminate the Medicare Part D Premium Stabilization Demonstration after the 2026 plan year, ending a temporary subsidy that had reduced standalone prescription drug plan premiums by an estimated $16 per month on average. The program, created by the Biden administration in 2024 to offset premium increases triggered by the Inflation Reduction Act's out-of-pocket caps, cost approximately $9.8 billion over two years. CMS Administrator Dr. Mehmet Oz said the market has stabilized and most beneficiaries would see premium increases of less than $10 per month, but independent analysts warn that some seniors could face steeper costs. The full impact on 2027 premiums will not be known until CMS releases plan data in September.