White House Ending Medicare Drug Subsidy

A federal program that has helped steady premiums for Medicare prescription drug plans is going away. The Trump administration will phase out $3.6 billon in subsidies to insurers after 2026, saying the companies no longer need the support on Medicare Part D plans, reports the Wall Street Journal. The move means that millions of seniors may face higher Medicare drug premiums next year, notes the New York Times, but the particulars likely won't become clear until the fall.

An administration official tells the Journal that about 45% of Medicare Part D enrollees are projected to face monthly hikes of roughly $11 to $20, and 30% would see increases of under $10, though some could avoid increases by switching plans. The remaining 25% would see no hike or perhaps a decrease. Dr. Mehmet Oz, head of the Centers for Medicare & Medicaid Services, framed the move on X as ending a Biden-era "bailout" that he said encouraged higher pricing and gave "billions" to big insurers, per Reuters. Still, analysts say rising use of pricey GLP-1 and specialty drugs—and cost shifts under the Inflation Reduction Act—will keep pressure on premiums.