The Centers for Medicare and Medicaid Services (CMS) confirmed that the program, implemented in 2024 during the administration of former President Joe Biden, will expire at the end of this year and will not be renewed. The initiative had been created to cushion the impact of the changes introduced by the Inflation Reduction Act and help keep premiums for Medicare Part D prescription drug coverage stable.
The measure comes at a politically sensitive time, when the cost of living continues to be one of the main concerns of voters heading into the November legislative elections.
Experts warn of a greater impact on pockets
Although the Trump administration maintains that most beneficiaries will see increases of less than $10 a month and some will even pay less, health policy experts believe that the end of the subsidy represents a change that could significantly affect millions of seniors on fixed incomes.
Juliette Cubanski, vice president and director of KFF's Medicare Policy Program, said the elimination of federal support contradicts efforts the White House has promoted to reduce drug prices. “President Trump has used very strong rhetoric about drug prices and negotiating deals with manufacturers to lower them,” he explained. However, he added that eliminating these subsidies “could translate into higher premium costs for millions of people with Medicare.”
According to KFF, the program allowed the premiums of independent Part D plans to be reduced by an average of $16 per month during 2026, when the average cost was around $36 per month. Without that support, some beneficiaries would have faced increases close to 50%.
The White House defends the decision
CMS Administrator Dr. Mehmet Oz defended the end of the program by assuring that it was temporary aid and is no longer necessary due to the stabilization of the market. "The Biden administration gave billions of taxpayer dollars directly to big insurance companies. This is unacceptable," Oz said.
According to CMS, more than 85% of beneficiaries enrolled in affected plans will have access to an option whose cost will be lower or increase by less than $10 next year. The official premiums for 2027 will be published between September and October, during the period prior to open enrollment.
However, organizations such as Protect Our Care and the Center for Medicare Advocacy questioned the decision, considering that the savings for the government will be limited compared to the economic impact it could represent for millions of older adults. The subsidy program cost nearly $9.8 billion between 2025 and 2026, according to the Government Accountability Office.
In 2025, about 23 million Americans were enrolled in stand-alone Part D drug plans. Although eliminating the subsidy does not change the annual out-of-pocket limit for prescription drugs — which will increase from $2,100 in 2026 to $2,400 in 2027 — specialists warn that any increase in premiums could put additional pressure on seniors already facing rising prices for food, housing and fuel.
