The administration of US President Donald Trump on Tuesday announced plans to wind down the Medicare Part D premium subsidy program introduced under Joe Biden, The Hill reports. The changes will come into force at the beginning of 2027. It is unclear how much monthly premiums will increase and whether the increase will affect all program participants.
Medicare Part D is voluntary prescription drug coverage offered by private insurance companies. It helps Medicare beneficiaries pay for both brand-name and generic drugs. Coverage can be purchased as a separate plan in addition to Original Medicare or as part of a comprehensive Medicare Advantage plan.
The largest insurers operating under Medicare Part D include UnitedHealth Group, Humana and CVS Health-owned Aetna, writes Reuters.
About 25 million Americans have stand-alone Medicare Part D drug plans. These are mainly elderly people and patients with disabilities.
As The Washington Post notes, the subsidy program allowed an average reduction in monthly premiums of $16. However, its cancellation does not mean that the cost of insurance will automatically increase by the same amount. The head of the Centers for Medicare and Medicaid Services (CMS), Mehmet Oz, assured that for most program participants the increase will be less than $10 per month.
“For most Medicare beneficiaries, premiums will increase by less than $10, and many will even pay less. Low-cost insurance plans continue to be available to everyone with Medicare. “We will continue to lower prescription drug costs for all American patients – including through new most-favored-price agreements and our program allowing seniors to get GLP-1 drugs for $50 a month,” Oz wrote on social network X (formerly Twitter) on Tuesday.
CMS said detailed data on the new rates is scheduled to be released in September. The agency also provided preliminary information about 2027 Medicare applications. The national average monthly claim in 2027 will be $296.05.
The base rate that will be used to calculate monthly premiums for Medicare Part D is set at $41.33. Under the Inflation Reduction Act, annual inflation through 2029 is capped at 6%.
