The Trump administration is ending a temporary Medicare Part D subsidy program in 2027, a move that could leave millions of older adults paying more for prescription coverage. The Centers for Medicare & Medicaid Services said this week it will wrap up the program, which was created in 2024 to blunt the effect of drug-cost changes tied to the Inflation Reduction Act.
The timing matters because beneficiaries will learn their 2027 Part D rates in the fall, in a midterm election year, when even small changes in monthly premiums can land hard for people living on fixed incomes. About 25 million Americans have Medicare Part D plans, and the subsidy program was designed to lower their prescription drug costs after the Biden administration put it in place two years ago.
Part D beneficiaries paid an average of $36 a month this year for prescription drug premiums with the subsidies in place. The Medicare Payment Advisory Commission said the subsidies offset the average premium by $16 in 2026, and CMS estimated the program cost $3.6 billion that year. Dr. Mehmet Oz said most Medicare beneficiaries would see less than a $10-per-month increase, though he also said some people would pay less than they did before. He added that every Medicare beneficiary still has access to low-cost plans and pointed to lower drug-pricing efforts that remain in place.
The change does not touch the separate out-of-pocket cap for standalone Medicare drug coverage, which was set at $2,100 in 2026 and is projected to rise to $2,400 for 2027. That matters because the premium subsidy was temporary, while the broader Medicare drug system still includes direct federal negotiations with pharmaceutical companies over some expensive drugs under a program created by Congress in 2022.
That is where the fight is sharpening. Senate Minority Leader Chuck Schumer said the Trump administration is actively raising prescription drug costs for 25 million seniors and called the decision “heartless, cruel, and completely by choice.” CMS, by contrast, is signaling that the hit will be limited for most people. The exact number of beneficiaries who will pay more, and by how much, will not be clear until the fall rate notices land.
For now, the outline is plain: the subsidy that softened Part D premiums is going away, and the first real test of how painful that becomes will come when 2027 notices arrive later this year.
