The Trump administration announced it will end a subsidy program aimed at keeping premiums low for Medicare Part D beneficiaries.
In a notice posted Tuesday, the Centers for Medicare & Medicaid Services released key guidance for Part D plans as they prepare bids ahead of the upcoming annual enrollment period. In it, the agency said it would sunset the Part D Premium Stabilization Demonstration at the end of the 2026 plan year, returning the program to "traditional market conditions" in 2027.
The demonstration was first implemented in the 2025 plan year.
In a statement posted to his X account, CMS Administrator Mehmet Oz, M.D., said that, through the program, "the Biden admin gave BILLIONS of taxpayer money DIRECTLY to Big Insurance Companies."
The change was first reported in the Wall Street Journal, and a CMS official told the newspaper that the subsidies led payers to raise their rates, as the feds would cover the cost.
"We are stabilizing the market so this bailout is no longer needed," Oz wrote.
CMS said in the notice that, based on an analysis of bids, the agency believes plans "had sufficient experience under the redesigned Part D benefit to support their assumptions in developing the prescription drug plan bids," leading it to end the subsidy program.
Full details on the current Medicare Advantage and Part D landscape, as well as average premiums, will be released in September, according to the notice.
CMS did say, though, that the base beneficiary premium for 2027 will be $41.33. Under the Inflation Reduction Act, the base premium cannot increase by more than 6% per year between 2024 and 2029.