Millions of older adults under Medicare prescription drug coverage could face higher monthly costs in 2027. The Trump administration plans to conclude a temporary subsidy program that has helped reduce premiums for two years. The Centers for Medicare & Medicaid Services (CMS) announced the end of the subsidy this week. This program was initially introduced by the Biden administration in 2024 to lower Medicare Part D prescription drug costs. The change followed the 2022 Inflation Reduction Act.

Federal officials believe the financial impact on beneficiaries will be minimal. Still, the decision may have political consequences during a crucial midterm election year. Cost of living is a primary concern for voters, especially older adults on fixed incomes. Approximately 25 million Americans with Medicare Part D plans will find out about their 2027 rates in the fall when elections occur.

Democrats criticized this move, labeling it part of a pattern of federal attacks on healthcare affordability. This follows federal Medicaid cuts and the expiration of Affordable Care Act subsidies that had lowered premiums for working-age Americans. Senate Minority Leader Chuck Schumer expressed concern on X, stating, The Trump administration is actively raising prescription drug costs for 25 million seniors. Heartless, cruel, and completely by choice.

CMS Administrator Dr. Mehmet Oz explained that ending the program would save taxpayers billions. It cost the agency an estimated $3.6 billion in 2026. He noted that most Medicare beneficiaries would see less than a $10-per-month increase. Some might even see lower premiums. He stated, Every Medicare beneficiary still has access to low-cost plans, and we will continue to lower prescription drug prices for every American patient.

The federal government will continue to negotiate with pharmaceutical companies to reduce the prices of the highest-cost drugs in Medicare. This week’s decision does not affect the out-of-pocket cap, which limits the annual amount spent on prescription drugs for older adults with standalone Medicare coverage. This cap was set at $2,100 in 2026 and is projected to rise to $2,400 in 2027.

According to the healthcare research nonprofit KFF, Part D beneficiaries paid an average of $36 a month for their premiums this year. Subsidies offset the average premium by $16 in 2026, as reported by the federal Medicare Payment Advisory Commission (MedPAC). The exact number of affected Americans and how much more they will pay remains uncertain. Older Americans can shop for plans each year, with varying prices. CMS plans to release information about next year’s premiums in September.

Juliette Cubanski, vice president at KFF, stated that price increases might be minor for some consumers but significant for others, especially when combined with rising costs for groceries, gas, and housing. She noted, What matters most is how much more or less people have to pay monthly and what remains after the bills are paid. This change could make it more difficult for some individuals to balance their budget.