Article Summary –
The Centers for Medicare and Medicaid Services announced the end of the Medicare Part D Premium Stabilization Demonstration program, which provided temporary subsidies to make prescription drugs more affordable for Medicare Part D subscribers, set to conclude by the end of 2026. This decision follows a reduction in subsidies during the Trump administration and returns the program to traditional market conditions, but it has sparked concerns over potential premium increases for beneficiaries, as highlighted by stakeholders like Juliette Cubanski and Leslie Dach. Despite the CMS’s claim that the market is stabilizing and most beneficiaries will see minimal cost changes, Democratic members of Congress have urged reconsideration, citing the program’s success in stabilizing drug prices and maintaining affordability for seniors amid rising living costs.
The Centers for Medicare and Medicaid Services revealed in a July 28 memo that it will conclude a program by the end of 2026, which has reduced prescription drug costs for about 25 million Medicare Part D subscribers.
In July 2024, under President Joe Biden, the agency initiated the Medicare Part D Premium Stabilization Demonstration. This voluntary program for standalone prescription drug plans offered subsidies to help Medicare Part D subscribers pay for medications. For calendar year 2025, it granted a $15-a-month premium subsidy and capped annual premium hikes at $35.
In 2026, the Trump administration reduced the monthly subsidy to $10, allowing premiums to rise by up to $50.
John Brooks, Center for Medicare deputy administrator, stated: “For CY 2027, CMS analysis indicates Part D plan sponsors now have enough experience under the redesigned Part D benefit to support their assumptions in developing prescription drug plan (PDP) bids. Thus, CMS will cease the demonstration at the conclusion of CY 2026 to return to traditional market conditions in CY 2027.”
CMS administrator Mehmet Oz noted on X that “The Biden admin gave BILLIONS of taxpayer money DIRECTLY to Big Insurance Companies. This is unacceptable. We are stabilizing the market so this bailout is no longer needed.”
A Trump administration official informed the Wall Street Journal that 30% of Medicare Part D subscribers would experience monthly bill increases of less than $10, while 45% would see hikes between $11 and $20. Others may see no change or could even benefit from a decrease.
Juliette Cubanski, vice president of Medicare Policy at KFF, said, “Without these additional subsidies for 2027, some Part D standalone drug plan enrollees might face larger premium increases for drug coverage than in recent years, though specific premium amounts remain unknown.”
During his 2024 campaign, President Donald Trump promised: “Starting the day I take the oath of office, I will drive prices down rapidly and make America affordable again. We’re going to make it affordable again.”
Leslie Dach, chair of Protect Our Care, stated: “Donald Trump and Republicans are making health care more expensive for seniors at every turn. They are eliminating a key program that helps seniors afford medications, leaving countless to pay more for life-saving prescriptions. Seniors deserve lower drug costs and affordable health care. Instead of lowering costs, Trump and Republicans force seniors to pay more while providing tax breaks to billionaires.”
A CMS spokesperson explained: “The Part D market is stabilizing after three years of Inflation Reduction Act plan changes. This demonstration was always temporary to address market instability. Despite concerns, our data shows plan bids have stabilized, and over 85% of those impacted previously will have access to a Part D plan with lower costs or less than a $10 increase next year.”
On Aug. 4, 50 Democratic Congress members sent a letter to Oz urging the program’s continuation, stating: “The program has stabilized drug prices for nearly 25 million people, and ending it risks affordability during rising costs. Lower costs and increased coverage show the program’s success. Yet, CMS is ending it amid a cost of living crisis.”
The White House press office did not respond to a request for comment.
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