Medicare Part D Is NOT Ending in 2027 — Here's What's Actually Happening

SHORT ANSWER: Medicare Part D is not ending. What's actually ending after 2026 is a temporary federal subsidy — the Part D Premium Stabilization Demonstration — that helped keep stand-alone drug plan premiums lower over the past two years. Without it, some seniors with stand-alone Part D plans could see premium increases in 2027. The core protections you rely on, including the out-of-pocket drug cap, are staying in place.

If you've seen headlines saying "Medicare Part D will end in 2027," you're not alone in being confused — and worried. Those headlines are misleading. Part D itself continues. What's changing is a behind-the-scenes federal payment to insurance companies that has been keeping drug plan premiums artificially low. When that goes away, some of the cost will likely land in seniors' monthly bills. Here's exactly what's happening and what to do about it.

WHAT'S ACTUALLY CHANGING

A subsidy is ending — the program continues

In 2024, the Biden administration created a program called the Part D Premium Stabilization Demonstration. It was designed as a temporary cushion — running for two years, 2025 and 2026 — to keep drug plan premiums stable while insurance companies adjusted to major changes the Inflation Reduction Act was making to Part D benefits.

The Trump administration announced on July 28, 2026 that CMS will not extend that subsidy into 2027. CMS Administrator Dr. Mehmet Oz said insurers now have "sufficient experience" pricing plans under the new rules and no longer need the federal support.

Here's what that means in plain English:

✓ The subsidy that has been holding stand-alone Part D premiums down goes away after 2026.

✓ Insurance companies will have to price their 2027 plans without federal help.

✓ Part D itself, the drug cost cap, insulin price limits, vaccine coverage, and Extra Help for low-income seniors all continue as they are.

The program is still there. The federal cushion that made it cheaper is not.

WHO'S AFFECTED

Only stand-alone Part D members feel the impact

The change affects stand-alone Part D drug plans — and only stand-alone Part D drug plans. If you have Original Medicare paired with a stand-alone Part D drug plan (about 25 million Americans), you're in the group directly affected. These are the plans that participated in the Premium Stabilization Demonstration, and losing that subsidy is what may push premiums up in 2027.

CMS says most beneficiaries will pay less than $10 more per month, though independent analysts at KFF and MedPAC warn some plans could see steeper increases. The subsidy had been lowering stand-alone Part D premiums by an average of $16 per month in 2026.

If you have Medicare Advantage with drug coverage (MAPD), this policy change doesn't apply to you — those plans never participated in the demonstration in the first place. If you qualify for Extra Help (the Low Income Subsidy), your protections are unchanged and premiums for you should remain low or free.

WHAT TO DO THIS FALL

Three simple steps to protect yourself for 2027

You don't have to panic. But if you have a stand-alone Part D drug plan, it's worth paying attention this fall.

✓ Read your Annual Notice of Change (ANOC) letter. It arrives by September 30 from your Part D plan and spells out exactly what's changing about your specific plan in 2027 — including your new premium.

✓ Check every medication you take. Look at your ANOC to confirm all your prescriptions are still covered, and check whether any have moved to a higher (more expensive) copay tier. Even one drug moving up a tier can cost you hundreds per year.

✓ Compare plans during the Annual Election Period (October 15 – December 7). This is your window to switch drug plans without penalty. If your current plan's changes don't work for you, this is when to fix it.

WHY THIS FALL'S REVIEW MATTERS

Premium changes will vary widely by carrier.

In a typical year, most people don't need to switch drug plans. This year is a little different for stand-alone Part D members. When the federal subsidy goes away, the amount that Part D plans raise premiums will vary widely — some carriers will absorb the impact more than others. The plan that was cheapest for you in 2026 may not be the cheapest for you in 2027.

Comparing your current plan against the others available in your area for the medications you take is the best way to make sure you're not overpaying next year. If you'd like a second set of eyes on your ANOC or want help walking through the numbers, we're happy to help.

HAVE QUESTIONS? WE'RE HERE.

If you've seen the headlines and aren't sure what applies to you, give us a call. We're always happy to answer questions.

Jamon White · TX Lic. 1316404 Four Oaks Medicare Planning 📞 512-298-5404 ✉️ jwhite@gofouroaks.com 🌐 gofouroaks.com

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