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Medicare ends Part D Premium Stabilization Demonstration, raising 2027 risk
CMS ended the Part D Premium Stabilization Demonstration after it held average monthly plan premiums under $40 in 2025, at a federal cost of $9.8B in 2025 and 2026.
Yahoo Finance reports that the U.S. Centers for Medicare and Medicaid Services has ended the Part D Premium Stabilization Demonstration, a program that subsidized stand-alone Medicare drug plan insurers to prevent premium increases.
According to the article, the stabilization effort was introduced under the Inflation Reduction Act of 2022 and supported a cap that limited beneficiary out-of-pocket prescription costs to $2,000 per year starting in 2025. The article says that while the cap reduced patient costs, it shifted pressure to insurers, which the demonstration was designed to offset.
The article cites a Kaiser Family Foundation report saying the demonstration worked as intended by keeping the average monthly PDP premium under $40 in 2025. It also points to a U.S. Government Accountability Office estimate that premiums would have risen from about $43 in 2024 to about $81 in 2025 without the program, and that the program cost the federal government $9.8 billion across 2025 and 2026.
With the demonstration ending, the article says the Trump administration is effectively shifting the burden back toward patients by allowing insurers to raise 2027 premiums for people who buy stand-alone Medicare drug plans. It adds that the shift could affect beneficiaries already concerned about the price of prescription drugs.