Trump ends Medicare Part D subsidy after 2026

The Trump administration will end a federal subsidy program that has helped stabilize premiums for Medicare Part D prescription drug plans, a move officials confirmed on Tuesday, July 28, 2026. The change, which will take effect after the 2026 plan year, is expected to lead to higher monthly costs for many of the roughly 25 million older Americans enrolled in these standalone drug plans.

Officials at the Centers for Medicare & Medicaid Services stated that the temporary stabilization program is no longer necessary. They said a review of insurance company bids for 2027 showed insurers have gained sufficient experience with the system to accurately price their plans without the extra financial support. CMS Administrator Dr. Mehmet Oz defended the decision in a statement, asserting the move would stabilize the market and that the bailout was no longer needed. He projected that premiums would increase by less than $10 for most Medicare recipients, with many even seeing lower premiums.

The subsidy program was designed to cushion premium increases as insurers adapted to changes in the Part D benefit structure. According to federal estimates, the program reduced the average Part D plan...