The administration of US President Donald Trump plans to end a subsidy program that has helped keep Medicare Part D prescription drug premiums lower, according to a report by The Wall Street Journal.
The subsidy program provides insurers with an estimated $3.6 billion in subsidies this year and is set to expire after 2026, the report said. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, stated: "We are stabilizing the market so this bailout is no longer needed."
Annual subsidy to insurers under the Medicare Part D program, set to expire after 2026.
About 25 million Part D beneficiaries will learn their 2027 premiums this fall. An administration official estimated that 25% of enrollees will see premiums stay the same or decrease in 2027, while about 30% will pay less than $10 more per month. Most of the remaining 45% are expected to face increases of $11 to $20 monthly, although lower-cost plans will still be available for those who switch.
According to a Government Accountability Office report, the subsidy program has pumped an estimated $9.8 billion into the market, with $6.2 billion in 2025 and $3.6 billion in 2026. Millions of older Americans could pay more for their prescription drug coverage next year, as the change affects 2027 premiums.
We are stabilizing the market so this bailout is no longer needed.