Trump Administration Ends $3.6 Billion Medicare Part D Premium Subsidy Program
The Trump administration is terminating a $3.6 billion subsidy program for Medicare Part D premiums, potentially raising costs for millions of seniors. The CMS administrator confirmed the subsidies will end after 2026, affecting roughly 75% of the 25 million beneficiaries with possible out-of-pocket increases.
The Trump administration plans to end a subsidy program that helped hold down premiums for Medicare drug plans, a move that could leave many seniors facing higher rates for their prescription coverage next year. The program provided an estimated $3.6 billion in subsidies to insurance companies this year to blunt increases in premiums for Medicare Part D. It will end after 2026, according to administration officials.
The CMS administrator confirmed via social media that the subsidies had been scrapped, arguing that they are no longer necessary and that Medicare beneficiaries will have other options for low-cost prescription drug plans.
Roughly 25 million people have Part D plans, and they will learn about their 2027 rates in the fall. Approximately 75% of beneficiaries should expect some kind of increase in their out-of-pocket costs.
Medicare Part D was created during the George W. Bush administration. Democrats later improved the program, and President Joe Biden's administration helped subsidize millions of seniors' prescription drug costs.