The Trump administration announced on Tuesday, July 29th, 2026, that it will end a key subsidy program for Medicare Part D, the government health insurance prescription drug benefit used by tens of millions of older or disabled Americans. The subsidies, which currently cost the government billions of dollars and help keep prescription drug insurance premiums at an average of $36 per person per month, are set to expire at the end of the year.
Centers for Medicare & Medicaid Services Administrator Mehmet Oz stated that the subsidy program aimed to keep premiums in check but claimed it primarily benefited corporate insurance companies. The administration expects the changes to take effect in 2027, with enrollees learning their new monthly costs later in the fall.
An administration official indicated that ending the subsidies will likely lead to higher prescription costs and increased premiums for about half of Medicare Part D recipients. According to the health policy nonprofit KFF, premiums could rise by as much as $20 a month for some, though for most recipients, premiums are expected to increase by less than $10, with many even seeing lower premiums.
Mehmet Oz emphasized, "Every Medicare beneficiary still has access to low-cost plans, and we will continue to lower prescription drug prices for every American patient, from more MFN deals to our policy giving seniors access to GLP-1s for $50 a month," referring to "most favored nation" deals that ensure pharmaceutical companies charge U.S. patients the same rates as in other countries. He also noted, "We are stabilizing the market so this bailout is no longer needed."
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