(José Niño, Headline USA) Seniors who buy stand alone Medicare drug coverage will shop for 2027 plans without a federal cushion that has held their premiums down for two years.
The Trump administration is winding down the subsidy program that pays insurers to blunt premium increases in Medicare Part D, the Wall Street Journal reported. Payments stop after 2026. The Journal put this year’s outlay at an estimated $3.6 billion, and a Government Accountability Office report tallied roughly $9.8 billion across both years, $6.2 billion in 2025 and $3.6 billion in 2026.
Centers for Medicare and Medicaid Services Administrator Mehmet Oz defended the decision on social media, casting the payments as a giveaway to insurers rather than help for patients.
“We are stabilizing the market so this bailout is no longer needed,” Oz wrote. “Premiums will go up by less than $10 for most Medicare recipients, with many even seeing LOWER premiums.”
An administration official told the Journal the extra money invited insurers to push rates higher, confident Washington would absorb the difference. Other cost controls in Part D stay in place, the official said. Had the program run another year, the official added, UnitedHealth Group alone would have collected more than half the funding.
A UnitedHealth spokesman told the Journal the company remains “committed to working with CMS, ensuring seniors have access to affordable prescription medicines.”
The official gave the Journal a breakdown of what roughly 25 million Part D enrollees can expect. About a quarter should see premiums hold steady or fall. Another 30 percent face increases below $10 a month. The remaining 45 percent will mostly land in the $11 to $20 range. Shoppers willing to switch plans can still find cheaper options, the official said. The average Part D premium ran near $36 a month this year, according to KFF.
Underlying costs explain much of the pressure. Plans absorbed rising bills for GLP-1 medications and other specialty drugs, and the 2022 Inflation Reduction Act shifted more of the tab onto insurers while cutting what enrollees pay out of pocket. Juliette Cubanski of KFF expects those forces to persist into 2027.
The Medicare Payment Advisory Commission calculated that the program trimmed the average Part D premium by roughly 40 percent in 2025 and about 27 percent this year.
Steeper premiums could drive more beneficiaries toward Medicare Advantage, which usually bundles drug coverage and often charges nothing extra. Insurers have already retreated from the stand alone market, where the number of available plans has fallen by roughly half in two years.
CMS expects to publish final 2027 premiums in September, weeks before enrollment opens and months before voters weigh health costs in the midterms.
José Niño is the deputy editor of Headline USA. Follow him at x.com/JoseAlNino
