Trump Administration Will End Medicare’s Part D Subsidy Program That Currently Helps 25 Million Beneficiaries
CMS is ending a subsidy program that helped keep Medicare drug premiums down — and seniors won't know the new costs until fall.
Seniors on Medicare are going to want to pay attention to the next few weeks, as the Trump administration makes some big changes to the program.
A new report from ABC News indicates that Medicare’s Part D subsidy program is shutting down in 2027. This comes after the program’s subsidies were already set to expire at the end of 2026. However, previous administrations usually made an effort to find some sort of bridge funding. Now, seniors who use Part D will need to take a closer look at their coverage to understand where they stand.
Dr. Mehmet Oz is the administrator for the Centers for Medicare & Medicaid Services. He broke the news to the press during a White House press briefing. (The Wall Street Journal had reported on this first.) The government claims that the Part D subsidy program actually helped corporate insurance companies. ABC’s reporting estimates that around 25 million people use the program. The subsidy’s end could result in higher prescription costs, increased premiums, and more for about half of the plan’s recipients.
Trump Administration Getting Rid of Medicare Part D Subsidy Program
Seniors looking for details on their increased monthly medication costs will have to wait. Nothing has been announced yet, though administration officials say enrollees should look toward fall 2026 for answers. Oz delivered a message blaming President Joe Biden for the rate hike.
“The Biden admin gave BILLIONS of taxpayer money DIRECTLY to Big Insurance Companies. This is unacceptable,” he typed. “We are stabilizing the market so this bailout is no longer needed. Premiums will go up by less than $10 for most Medicare recipients, with many even seeing LOWER premiums.”
Oz continued, “Every Medicare beneficiary still has access to low-cost plans, and we will continue to lower prescription drug prices for every American patient, from more MFN deals to our policy giving seniors access to GLP-1s for $50 a month.”
Near the end, he references “most favored nation” deals — under which pharmaceutical companies charge U.S. patients the same rate they charge in other countries.
Will Costs Really Rise?
An even clearer picture emerges from the US Government Accountability Office’s report on Medicare Part D, published in February of this year. Premium stabilization measures have been difficult to achieve since the Inflation Reduction Act of 2022. Read some of their findings below.
“The Centers for Medicare & Medicaid Services (CMS) implemented the voluntary Medicare Part D Premium Stabilization Demonstration (Demonstration) in 2025 to stabilize beneficiary monthly premiums and enrollment in Part D standalone prescription drug plans,” the report explained. “Nearly all plan sponsors opted to participate. Without the Demonstration, GAO’s analysis of CMS data showed that, if beneficiaries in standalone drug plans in 2024 remained in their plan in 2025, their monthly premium would have nearly doubled, on average.”
“In addition, monthly premiums for 37 percent of these beneficiaries would have increased by more than $40,” the abstract continues. “If these premium increases had taken effect, CMS officials expected widespread changes in enrollment for beneficiaries in standalone drug plans, which could disrupt beneficiaries’ access to their medications.”
Medicare Part D changes are coming in 2027, and millions of seniors will be watching closely this fall to find out exactly what it means for their wallets.
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