Medicare seniors aren’t going to be happy: changes are coming to their medications’ coverage that is expected to cost them more next year.
Specifically the federal agency over Medicare is ending a subsidy program to insurance companies for their standalone Part D drug plans that has helped keep enrollees’ premiums in check.
That means starting in 2027 seniors enrolled in standalone Part D drug plans could face a larger premium increase than they have in recent years.
The details of how much premiums could hike will not be known until September when the U.S. Centers for Medicare and Medicaid releases Part D drug plan specifics, including premiums.
In Florida about 1.5 million seniors 65 and older are enrolled in traditional Medicare with standalone Part D prescription drug plans that they choose, according to CMS data.
About 2.8 million are enrolled in private Medicare Advantage plans where their Part D plan is included.
The subsidies that were provided to insurance companies that is ending was for Part D standalone plans with traditional Medicare.
KFF, a leading independent health policy research group, sounded the alarm for the millions of seniors who get their prescriptions through original Medicare.
In 2025, roughly 23 million Americans were on traditional Medicare with standalone Part D plans for their prescriptions, according to KFF data.
“Without these extra subsidies in place for 2027, some Part D stand-alone drug plan enrollees could see a larger premium increase for drug coverage next year than they’ve faced in recent years, though plan specific premium amounts are not yet known,” Juliette Cubanski, vice president and director of the program on Medicare policy for KFF, said.
What are the details
The Part D stabilization program was announced in 2024 by the Biden administration that went into effect in 2025.
It gave an estimated $3.6 billion in subsidies to insurance companies to keep premiums from increasing for Medicare prescription plans, according to The Wall Street Journal.
The Part D premium stabilization was a voluntary program for standalone prescription drug plans “to address volatility and variation in standalone premiums following benefit changes mandated by the Inflation Reduction Act (IRA),” according to CMS.
The IRA capped out-of-pocket drug spending for Part D enrollees and shifted more costs onto Part D plan sponsors, or insurance companies, that led to higher expected costs and premiums for the standalone plans, according to CMS.
The federal agency says insurance companies have gained “sufficient experience” to support bid development, suggesting that the extra financial support provided under the stabilization program is no longer needed.
The stabilization program is no longer necessary, CMS Administrator Dr. Mehmet Oz said on X.
“We are stabilizing the market so this bailout is no longer needed,” Oz said on X, according to Healthcare Finance.
In 2025 the base beneficiary premium was reduced by $15, and the monthly premium increase was limited to $35, according to KFF.
For the current year the base premium reduction was $10 and a maximum allowable premium increase was $50.
The subsidies reduced the average monthly Part D standalone premium by $26 in 2025 and $16 in 2026, according to MedPAC.
Do you have an opinion about this topic? Write a letter to the editor and send it to letters@naplesnews.com and/or mailbag@news-press.com. Keep it to 250 words or fewer and include your contact info. Have more to say: Send a guest column of no more than 600 words.
Liz Freeman is a health care reporter. Reach her by emailing lfreeman@naplesnews.com
Please support local community journalism and stay informed about Southwest Florida news by subscribing to The News-Press and Naples Daily News; download the free News-Press or Naples Daily News app, and sign up for daily briefing email newsletter, food & dining and growth & development newsletters here and here.
This article originally appeared on Naples Daily News: Medicare subsidy cuts may hike seniors’ drug plan costs
Reporting by Liz Freeman, Fort Myers News-Press & Naples Daily News / Naples Daily News
USA TODAY Network via Reuters Connect
By Liz Freeman, Fort Myers News-Press & Naples Daily News | USA TODAY Network
