The federal government is ending the temporary Part D Premium Stabilization Demonstration after 2026.
The subsidy is being eliminated for 2027. It was created to prevent sharp Part D premium increases after the Inflation Reduction Act changed the drug benefit.
The program cost Medicare about $9.8 billion over 2025–2026. In 2026 alone, it was estimated to cost about $3.6 billion.
For 2026, CMS reduced the subsidy supporting plans from $15 to $10 per beneficiary per month, while also increasing the limit on year-over-year premium increases from $35 to $50.
This is not a cut to the Part D drug benefit itself. The $2,100 annual out-of-pocket cap remains in place for 2026 (but still adjusted each year), and the underlying Part D redesign remains.
The immediate consequence of ending the subsidy is that stand-alone Part D premiums could rise in 2027. CMS says most people will see an increase of less than $10 per month, although independent analysts caution that increases will vary substantially by plan.
Final 2027 premiums aren’t expected until September.
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