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Administration to Pull Back on Premium Help for Part D Beneficiaries
On Tuesday, the Trump administration announced that it would end the Part D Premium Stabilization Demonstration at the end of 2026, a year earlier than originally envisioned. This program helped to keep premiums for standalone Part D plans in check as Inflation Reduction Act (IRA) Part D changes went into effect.
IRA Shifted Costs From Beneficiaries to Plans
The IRA restructured Part D, including by adding an inflation-adjusted out-of-pocket cap on enrollee spending ($2,000 in the first year, $2,100 in 2026) and shifting some Medicare cost liabilities onto plans, which responded by raising their proposed premiums. Some of this increase was expected, but many plan rates exceeded initial projections, resulting in sharply higher premiums.
Medicare Advantage plans that include Part D can use Medicare dollars to keep premiums low in ways that standalone Part D plans cannot.
Medicare Advantage plans that include Part D (MA-PDs) were not similarly affected. They can cover increased costs through overly generous rebates and other overpayment. This gives MA-PDs an unfair advantage—they can use Medicare dollars to keep premiums low in ways that standalone plans cannot. As a result, amid skyrocketing Part D premiums, many people could be drawn to an MA-PD’s lower drug plan rates, even if MA was not the best choice for them otherwise. Choosing between MA and Original Medicare is a complicated, highly personal consideration. Imbalances in premium-setting undermine that decision-making.
Part D Premium Stabilization Demonstration
Importantly, because Congress could foresee that plans would want to increase premiums to offset any additional costs, they included a mechanism in the IRA to protect enrollees from significant premium spikes under the restructuring. That safeguard limits increases in the Part D base premium to 6% growth each year. However, because this cap is an average, premiums for individual Part D plans can have more variation.
The program was intended to help willing standalone Part D plans minimize financial risk and keep premiums down.
To address this, the Biden administration created a temporary program to further stabilize rates. The voluntary demonstration began in 2025 and was to run for at least three years. The program was intended to help willing standalone Part D plans minimize financial risk and keep premiums down—enabling more people to purchase affordable drug coverage, preventing plans from exiting the market, and positioning standalone plans to compete more effectively with MA-PDs.
Premium Subsidy Reduced in 2026, Eliminated in 2027
For 2026, the Trump administration kept the demonstration in place but scaled it back.
Now the Trump administration is eliminating the demonstration a year early. Unfortunately, this risks enrollees facing jumps in standalone Part D premiums, a worsening affordability crisis and, potentially, a less stable Part D market.
In some cases, any increased premiums may be relatively small. But plans will have to take into account the elimination of this subsidy while building their 2027 bids, and the ultimate impacts on limited beneficiary budgets could still be significant.
Risks for People With Medicare
At a time when people with Medicare are already struggling with rising costs, we at Medicare Rights are concerned this decision will unnecessarily erode beneficiary choice, health, and financial security. It is likely to make it harder for older adults and people with disabilities to access and afford needed care and may increase enrollment in MA-PD plans that carry increased exposure to administrative barriers like prior authorization.
Medicare Rights is concerned this decision will unnecessarily erode beneficiary choice, health, and financial security.
We urge the administration to reconsider this decision, and we continue to call upon policymakers to do more to help beneficiaries afford their care and coverage, including by limiting drug prices through extended drug price negotiation, increasing access to assistance programs, and adding an out-of-pocket cap to Original Medicare to help protect people from unexpected costs.
Read more about Medicare Rights’ priorities for Original Medicare and private plans and information needs.
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13 Comments on “Administration to Pull Back on Premium Help for Part D Beneficiaries”
Kristina Wolf
July 30, 2026 at 5:00 pmMy part D premium ALREADY increased 1100% this year! I am afraid of what is going to happen next. What can we do???
Anne Grace
July 30, 2026 at 6:56 pmGet rid of all the GOP/MAGA in office. My co-pays have already gone up more than 400%.
Richard Streby
August 3, 2026 at 8:37 pmIt’s just another way the GOP is forcing people to MA. Enrolies of original Medicare is now below 50% and as that further dwindles, increasing MA enrollment they will push to privatize Medicare and once that happens health care will be unaffordable. Period!
E
August 27, 2026 at 5:40 pmI agree with you and then above opinions. My husband worked decades, killing himself to commute more than 3 hours to and from thee u.s.p.s.. He went to college to become an airline pilot upon ending his masters degree and flight school program in Florida because that is where the college is. Daytona Beach. My husband was examined mid year and found to have an acuity issue. So he came back continued with a job he had since he was 17. I had no idea how little he made. When the post office was looking for lms operators or O.d.i.s. clerks my husband passed. The eye issue meant no flying solo either. So he had no issues working with the post office. Down the road in his early 30’s and two kids later he was diagnosed with m.s.( Multiple sclerosis). Our world went crazy then he went back held his head up and continued working over another decade for the usps w/ m.s… He lasted a good period of time. His coworkers were the best. But eventually that eye trouble did get diagnosed as he became legally blind, his health has taken drastic realities. He can’t do anything. He put through the post office his pension not to take more out until he turned retirement age. I was his full-time caregiver. O/,t p/ t. A large portion of his pension he signed papers so the post office held back money for an annuity in case something happens to him we receive a hefty annuity upon. Well you know. The post office gives him hos full pension and he has s.s. and unfortunately he had to live in a nursing facility. Cancer came for me at 46 my daughter at 16 and son 19. We couldn’t care for him the way we once did. Our own bodies were and are under attack. It’s a rare. What they call orphan illness. It is multi faceted. My kids are doing better than me. Im 68 I too worked during the beginning after our surgeries. I worked to pay back all our bills, chemo the whole thing. When his pension kicked in. In full it went directly to nursing home as well as his social security. I was holding the short straw again. I worked through all three different chemo years. Until they said it wasn’t going to work. Ive worked 20 years for the school district snd I too have a pension and s.s.. I cant afford to live on my own in my physical state or financial state. I pay a bot of rent to family members hoping I can live a longer life. Healthcare isnt lost on us. We pay through the post office for my husband’s medical insurance to cover just my care though its for both of us. Medicare became part of the post office plan last year
So part d is primary and private insurance is secondary. My daughter cares for me at home and works at a college full time. So we have our hands full. They say im keeping myself alive by listening to my body. Now that’s frightening. We both pay a lot to medicare. My husband started receiving a bit of help for medication from medicaid awhile ago. I pay our large sum monthly health premiums and we both have medicare a large sum taken out of each month added to the private insurance. I wont survive if I can’t have access to the hospital I go to now per the oncologist, ” she won’t survive in the outside community.” I know they’re right. I tried 7 hospitals and once stabilized they sent me to my hospital. Things I need others don’t know about.ye, I agree with all of you. It’s costly. I worry 24/7 about the usps being made private by the guy on the hill. My medicine costs me a lot. No chemo just stuff that happens when you age with a rare incurable disease. I feel young I look great despite all going on. But if medicare part d is having these changes its already attached to the post offices medical insurance that isn’t an advantage plan. After midterms the guy on the hill who ignores the constitution and is responsible for all the havoc will announce the sell off of the oldest federal government institution, the USPS! Will we see my husband’s annuity thst part that they held back from his pension for his family , me? In case he leaves before me. We lived in 19 grand a year 4 people for decades. I couldn’t afford day care. I have no family hence the rare inherited disease. It was mentioned once briefly on grays anatomy. I thought, great we will get awareness some attention money something going to help people like us. Yes this is ling because I have tons of questions. The usps has been around before we declared democracy. The constitution ect.. I know computers but pen to paper works effectively and is a nice touch for those we love. So mid terms please turn out so we can turn this around and right a sinking ship he created.
Mimi
July 30, 2026 at 5:15 pmUnfortunately, the Inflation Reduction Act is what created this problem in the first place and what has caused drug plan premiums to skyrocket ever since it took effect.
Lorraine
July 30, 2026 at 6:10 pmIt is time to do away with Advantage plans, period. Maybe the excess paid to Advantage plan providers could be use to reduce medical premiums for all Americans. That excess runs about $83 billion a year.
Ritch
July 30, 2026 at 7:52 pmIMO, Mimi is absolutely correct.
The Inflation Reduction Act is what created this problem in the first place and what has caused drug plan premiums to skyrocket ever since it took effect.
Unfortunately, when the IRA was passed, there was very little substantive analysis and accurate reporting done as to the potentially negative long-term impact of the IRA on Medicare Part D premiums and the (already) uneven ‘playing field’ that exists between Original Medicare and Medicare Advantage Plans. Legislating major benefit changes to Part D Plans and shifting those RX drug costs from policyholders to the insurance companies providing the Part D policies was bound to drive up premiums significantly.
These premium subsidies simply postponed how long it would be before the increase in drug costs were passed back to Part D beneficiaries in the form of higher premiums.
Regrettably, it’s another example of how politicians are better at “kicking the can down the road” than they are at truly solving complicated problems.
I absolutely agree with this article that it’s criticality important for people on Medicare to be able to choose whether their needs are better met with Original Medicare, a Part D Drug Plan, and a Medicare Supplement Plan that basically allow Medicare beneficiaries to see ANY Medical Providers who accept Medicare OR a Medicare Advantage Plan that bundles drug coverage and offers limits on out of pocket costs while limiting the Medical Providers you can see and often requiring pre-authorization for certain medical services.
It’s a shame that the IRA didn’t come up with a better way to fix the problem of some Part D policyholders having to pay extremely high out of pocket costs for some of their Rx medications. The solution it offered was inevitably going to put us where we are now, which, IMO, is a most alarming place to be.
RR
July 30, 2026 at 7:53 pmThis administration is stealing our healthcare to build monuments to their useless selves. Remember this at the Midterms. VOTE BLUE
Mitzi
August 1, 2026 at 1:02 amI am in favor of adding an out-of-pocket cap to Original Medicare.
Ritch
August 1, 2026 at 5:49 amIMO, Mimi is absolutely correct.
The Inflation Reduction Act is what created this problem in the first place and what has caused drug plan premiums to skyrocket ever since it took effect.
Unfortunately, when the IRA was passed, there was very little substantive analysis and accurate reporting done as to the potentially negative long-term impact of the IRA on Medicare Part D premiums and the (already) uneven ‘playing field’ that exists between Original Medicare and Medicare Advantage Plans. Legislating major benefit changes to Part D Plans and shifting those RX drug costs from policyholders to the insurance companies providing the Part D policies was bound to drive up premiums significantly.
These premium subsidies simply postponed how long it would be before the increase in drug costs were passed back to Part D beneficiaries in the form of higher premiums.
Regrettably, it’s another example of how politicians are better at “kicking the can down the road” than they are at truly solving complicated problems.
I absolutely agree with this article that it’s criticality important for people on Medicare to be able to choose whether their needs are better met with Original Medicare, a Part D Drug Plan, and a Medicare Supplement Plan that basically allow Medicare beneficiaries to see ANY Medical Providers who accept Medicare OR a Medicare Advantage Plan that bundles drug coverage and offers limits on out of pocket costs while limiting the Medical Providers you can see and often requiring pre-authorization for certain medical services.
It’s a shame that the IRA didn’t come up with a better way to fix the problem of some Part D policyholders having to pay extremely high out of pocket costs for some of their Rx medications. The solution it offered was inevitably going to put us where we are now, which, IMO, is a most alarming place to be.
Craig Marcott
August 3, 2026 at 3:03 pmRitch and Mimi are correct when they point out that the Inflation Reduction Act (IRA) of 2022 is what is causing a large part of the increases in the cost of Part D plans. Among other things, Medicare reduced its cost-sharing of 80% to 20%, transferring that to the insurance carriers while limiting the maximum out-of-pocket of covered drugs to the $2,000 (2025) and $2,100 (2026). The insurance companies responded by presenting bids that were commensurate with the shift in cost and risk. Those bids resulted in The Premium Stabilization Program which was the Biden Administration’s way of dealing with the increases which would have adversely affected the democrats in the 2024 election since it was the Biden administration and the democratic congress which created and passed the legislation. Obviously, the results were not intentional, but they were predictable. In fact, it was predicted that premium costs would rise sharply, that some carriers would pull out of the market, and that drug coverage would be affected. All of this happened. As someone who both sells Medicare Supplement plans and who has one, along with a PDP plan and will therefore be affected by this mess, it is extremely frustrating to watch legislation being proposed and passed that you know will have adverse effects on Medicare beneficiaries. Btw, one consequence that was not mentioned is that many of the PDP carriers eliminated commissions and made their plans unavailable to agents, the result being less advice available for people who really need it. Two things to note: 1) The Premium Stabilization Program was not legislated and is considered by many to be unconstitutional. It is very unlikely that it would have been continued. 2) “Blue” caused the current problem and therefore is unlikely to be the one to fix it. Unfortunately, the current administration is not helping the situation. It would be nice to get serious politicians to address this, but quite frankly I don’t see many on either side of the aisle willing to address this. And as former President Raegan said, the closest thing to eternity on earth is a political program. 2027 is going to be another wild ride in Medicare world.
Debra
August 6, 2026 at 4:42 pmOne does not need a PAID broker to figure out what coverage or plan to get when there are SHIP/SHINE counselors in all states.
No one has mentioned in this thread of comments how much more Medicare Advantage plans cost the government than original Medicare. Why do we, the taxpayers, continue to subsidize MA plans?
Lovena Levy
August 6, 2026 at 10:52 pmThis is so hard to digest, it seems as if all the hardship is rising along with inflation.,less income higher cost of living. SMH