The Trump administration's move to end subsidies for Medicare drug plans could cost consumers

Health The Trump administration's move to end subsidies for Medicare drug plans could cost consumers July 29, 20264:58 PM ET By  Sydney Lupkin Premiums for Medicare Part D drug coverage could rise next year because subsidies to insurers are set to end. Eric Thayer/Getty Images hide caption toggle caption Eric Thayer/Getty Images The Trump administration is ending subsidies that helped keep costs down for Medicare drug coverage. The change could mean higher Medicare Part D premiums for millions of beneficiaries in 2027. Under the Inflation Reduction Act of 2022, Medicare patients' out-of-pocket drug spending was capped at $2,000 starting in 2025, and it changed the way insurers pay for drugs. Living Better How to navigate the maze of drug discounts to get the best price That meant that while seniors would have to pay less at the pharmacy counter and therefore have easier access to expensive prescription drugs, insurers would be on the hook for more of the bill. At first, insurers didn't know how much more they'd be spending — or how high to set premiums. To ease the transition for insurers, the Biden administration created temporary subsidies to stabilize premiums through what's called a demonstration project. The subsidies were expected to last through 2027, but they're ending a year early. Sponsor Message Dr. Mehmet Oz, who oversees the Centers for Medicare and Medicaid, made the announcement on the social media platform X. "The Biden admin gave BILLIONS of taxpayer money DIRECTLY to Big Insurance Companies," he wrote. "This is unacceptable." CMS estimated that the subsidies would cost $9.8 billion in 2025 and 2026, according to a report by the Government Accountability Office published in February. About 23 million people were enrolled in standalone Medicare Part D drug plans in 2025, according to the report. Oz went on to say that the subsidies are no longer needed, adding that most people with Medicare will pay less than $10 more in premiums next year. But...