What Happened?
The Trump administration ended the Medicare Part D Premium Stabilization Demonstration in 2026, cutting short a program designed to run through 2027. The program brought average stand-alone premiums in 2025 down to $39, compared with the $84 they would have reached without it. The Congressional Research Service (CRS), Congress's nonpartisan research arm, published a new report on the impacts of the program's early termination.
The trial program grew out of the Inflation Reduction Act of 2022, which redesigned the Part D benefit and capped annual growth in the base beneficiary premium at 6 percent through 2030. After reviewing 2025 bids, the Centers for Medicare & Medicaid Services (CMS) found a 179 percent increase in the national average monthly bid amount compared with 2024 and launched the voluntary trial program to stabilize the market.
Why Does it Matter to Me?
Seniors enrolled in stand-alone Part D drug plans face higher monthly premiums starting in 2027 now that the subsidy program has ended.
CMS estimated the trial program would cost a combined $9.8 billion across 2025 and 2026. The Medicare Payment Advisory Commission (MedPAC) found the program lowered average stand-alone premiums by $26 per month in 2025 and $13 per month in 2026, compared with the 6 percent cap alone.
An October 2 analysis by KFF found that while many stand-alone plan enrollees would see modest premium changes in 2027, others could pay substantially more if they do not switch plans.
The number of stand-alone plans shrank by about 49 percent between 2024 and 2026, from 709 to 360, and the CRS report notes that fewer plans makes the market more vulnerable to large enrollment shifts.
Both Sides, Now
MedPAC found the demonstration lowered average stand-alone Part D premiums by $26 in 2025 and $13 in 2026, and H.R. 10374 would continue it until the Secretary of Health and Human Services determines that ending it would not increase premiums. More than 50 members of Congress have signed a letter asking CMS to reverse its termination decision.
CMS announced on July 28 that the demonstration would conclude at the end of the 2026 plan year, stating its bid analysis indicated additional subsidies were no longer needed. Congress did not authorize the termination; CMS made the decision administratively, and Congress's role now is to pass legislation that would reinstate the program.
What Happens Next?
A bill called the Affordable Premiums for Seniors Act of 2026 was introduced Sept. 14 and referred to the House Energy and Commerce and Ways and Means Committees; it would continue the trial program until the Secretary of Health and Human Services determines that ending it would not increase premiums.
The 6 percent annual cap on base beneficiary premium growth holds only through 2030, after which premiums could rise faster each year.
Those two committees must act on the bill before it can receive a full House vote. The question is whether Congress can move fast enough to protect seniors from higher drug costs before the 2027 plan year takes effect.
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