The temporary aid cost an estimated $3.6 billion in 2026, and officials say most beneficiaries would see less than a $10 monthly increase when 2027 rates are released in September.
Millions of older adults in Medicare Part D could face higher monthly prescription drug premiums in 2027 after the Centers for Medicare & Medicaid Services ended a temporary subsidy program launched in 2024. The aid was created by the Biden administration to cushion prescription drug coverage costs tied to the 2022 Inflation Reduction Act. CMS Administrator Dr. Mehmet Oz said terminating the program would stop billions of taxpayer dollars from flowing to insurers and estimated the subsidy cost the agency $3.6 billion in 2026. He said most beneficiaries would see less than a $10-per-month increase, while some could pay lower premiums than before. The move does not change Medicare's annual out-of-pocket cap for standalone drug coverage, which was $2,100 in 2026 and is projected to rise to $2,400 in 2027. KFF said Part D beneficiaries paid an average of $36 a month this year with the subsidies in place, while MedPAC said the assistance lowered the average premium by $16 in 2026. The policy shift lands in a midterm election year, with roughly 25 million Americans in Medicare Part D set to learn their 2027 rates in the fall as voters cast ballots in November.