Key facts
- The Trump administration plans to end a subsidy program for Medicare drug plans.
- The program is set to expire after 2026.
- This subsidy program provided approximately $3.6 billion to insurers this year.
- Medicare Part D offers prescription drug coverage to millions of beneficiaries.
- An administration official cited reduced need for subsidies and potential premium increases for some beneficiaries.
The Trump administration intends to end a subsidy program that helps to keep down premiums for Medicare drug plans, the Wall Street Journal reported, citing government officials. The program, which is expected to provide insurers with approximately $3.6 billion in subsidies this year to offset increases in Medicare Part D premiums, will not be renewed beyond 2026.
Medicare Part D provides prescription drug coverage to millions of Medicare beneficiaries through private insurance plans. Rising healthcare costs are a significant concern in the U.S., particularly for seniors on fixed incomes. According to data from the health policy research group KFF, nearly 25 million people were enrolled in standalone Medicare Part D plans in 2026.
An administration official told the Journal that the subsidies provided insurers with an incentive to raise premiums, as the government absorbed much of the additional cost. The official also stated that the subsidies are no longer necessary, as other measures to control Medicare Part D costs remain in place. The Department of Health and Human Services, which oversees the Centers for Medicare & Medicaid Services (CMS), did not immediately respond to a request for comment.
The official indicated that approximately a quarter of Medicare Part D beneficiaries would see their premiums remain unchanged or decrease next year, while about 30% would experience monthly increases of less than $10. CMS Administrator Dr. Mehmet Oz stated that the market is being stabilized and the "bailout is no longer needed."