(LOOTPRESS) – Millions of older Americans enrolled in Medicare prescription drug plans could see higher monthly premiums beginning in 2027 after the Trump administration announced it will end a temporary federal subsidy program that has helped keep costs down for the past two years.
The Centers for Medicare & Medicaid Services (CMS) said the subsidy program, launched by the Biden administration in 2024, will expire as planned. The initiative was created to cushion premium increases tied to changes under the 2022 Inflation Reduction Act.
The decision affects approximately 25 million Americans enrolled in Medicare Part D prescription drug plans. Beneficiaries will learn what their 2027 premiums will be this fall—during the same period voters head to the polls for the 2026 midterm elections.
Administration Says Increases Will Be Limited
CMS Administrator Dr. Mehmet Oz defended the decision, saying the subsidy program cost taxpayers an estimated $3.6 billion in 2026 and primarily benefited insurance companies.
According to Oz, most Medicare beneficiaries will see premium increases of less than $10 per month, while some could actually pay less depending on the plan they choose.
Oz also emphasized that seniors will continue to have access to low-cost Medicare drug plans and said the administration remains focused on lowering prescription drug costs through additional initiatives, including expanding access to certain GLP-1 medications and continuing Medicare’s drug price negotiation program.
Democrats Blast Decision
Congressional Democrats sharply criticized the move, arguing it will increase healthcare costs for seniors already struggling with inflation and rising living expenses.
Senate Minority Leader Chuck Schumer accused the administration of “actively raising prescription drug costs for 25 million seniors,” calling the decision “heartless, cruel, and completely by choice.”
Democrats also pointed to recent Medicaid reductions and the expiration of Affordable Care Act premium subsidies as part of what they describe as a broader trend of making healthcare less affordable.
Annual Drug Spending Cap Remains
While monthly premiums may increase, one key protection for Medicare beneficiaries will remain in place.
The decision does not affect Medicare’s annual out-of-pocket prescription drug spending cap, which was set at $2,100 for 2026 and is projected to increase to $2,400 in 2027.
Full Impact Still Unknown
According to healthcare research organization KFF, Medicare Part D enrollees paid an average monthly premium of $36 in 2026, with the federal subsidy reducing average premiums by approximately $16 per month.
Exactly how many seniors will experience higher premiums—and by how much—remains unclear. Medicare beneficiaries can compare and switch prescription drug plans during the annual enrollment period, and costs vary significantly among insurers.
CMS is expected to release official 2027 Medicare Part D premium information in September.
AARP Warns About Affordability
AARP, which supported the temporary subsidy, said it is too early to know the full financial impact but warned that ending the program could make prescription drug coverage less affordable for many older Americans.
Healthcare policy experts also noted that even modest premium increases could strain seniors living on fixed incomes, especially as many continue to face higher costs for groceries, housing, fuel, and other everyday necessities.
With premium information set to be released just weeks before Election Day, Medicare prescription drug costs are expected to become a closely watched issue heading into the 2026 midterm elections.
