Trump administration moves to end Medicare drug plan subsidies

The administration of US President Donald Trump plans to end a subsidy program that has helped keep Medicare Part D prescription drug premiums lower, The Wall Street Journal reported on Tuesday, warning that the move may lead to higher costs for many seniors in 2027.

The program, which provides insurers with an estimated $3.6 billion in subsidies this year, will expire after 2026. About 25 million Part D beneficiaries will learn their 2027 premiums this fall.

“We are stabilizing the market so this bailout is no longer needed,” said Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, in a post on the US social media platform X.

An administration official estimated that 25% of enrollees will see premiums stay the same or decrease in 2027, while about 30% will pay less than $10 more per month.

Most of the remaining 45% are expected to face increases of $11 to $20 monthly, although the official said lower-cost plans will still be available for those who switch.

Part D plans offer stand-alone drug coverage alongside Medicare’s traditional medical benefits. Higher premiums for the Part D plans could push more Medicare enrollees into Medicare Advantage, the private-insurer version of Medicare, which generally wrap in drug benefits and often charge no premiums at all.

The subsidy program has pumped an estimated $9.8 billion into the market, $6.2 billion in 2025 and $3.6 billion in 2026, according to a Government Accountability Office report.