The Trump administration is ending a temporary Medicare Part D subsidy program after 2026, a move expected to increase prescription drug plan premiums for many of the roughly 25 million Americans enrolled in standalone Medicare drug plans beginning in 2027. Federal officials say most beneficiaries will see monthly premium increases of less than $10, while some plans could become cheaper, but many seniors are expected to pay more than they do today.
The subsidy program was introduced to stabilize premiums after major changes to Medicare’s prescription drug benefit. The Centers for Medicare & Medicaid Services (CMS) now says insurers have had enough time to adjust to the new system and that taxpayers should no longer fund the temporary payments. CMS will instead rely on the Inflation Reduction Act’s provision limiting the national base Part D premium increase to 6% annually through 2029.
For 2027, CMS has set the base beneficiary premium at $41.33 per month, up 6% from 2026. However, actual premiums vary widely by insurer and plan, with final prices scheduled for release during Medicare’s annual open enrollment season this September. CMS also announced the national average monthly bid amount will be $296.05, a key benchmark used to calculate government payments to prescription drug plans.
The changes could reshape competition across the Medicare market. Higher standalone drug plan premiums may encourage more retirees to move into Medicare Advantage plans, many of which include prescription drug coverage as part of a broader package. Insurers with strong Medicare Advantage businesses could benefit if enrollment shifts accelerate.
For seniors, the most important takeaway is that premiums are only one part of the equation. Drug formularies, pharmacy networks and out-of-pocket costs can vary significantly between plans, making this year’s open enrollment especially important for anyone taking regular prescription medications. Final plan pricing and benefits will be released before enrollment begins on October 15.
JBizNews Desk | Washington
© 2026 JBizNews. All Rights Reserved.
Reproduction or distribution without written permission is prohibited.
