Medicare will end a subsidy program that helped lower prescription drug plan premiums after this year.
The Centers for Medicare & Medicaid Services said the program is no longer needed to keep premiums stable because insurers have learned to accurately price their Medicare Part D plans without it, Reuters reported.
“We are stabilizing the market so this bailout is no longer needed. Premiums will go up by less than $10 for most Medicare recipients, with many even seeing lower premiums,” CMS Administrator Dr. Mehmet Oz wrote on X.
Medicare Part D provides prescription drug coverage for millions of people through private insurance plans, including UnitedHealth Group, Humana, and Aetna.
The subsidy reduced premiums by about $16 on average, The Washington Post reported.
KFF said that nearly 25 million people have a standalone Medicare Part D drug plan this year.
The final 2027 Medicare Advantage and Part D premiums and plan details are expected to be released in September. However, CMS said that the national average monthly bid amount will be $296.05 next year, while the base beneficiary premium for Medicare Part D will be $41.33.
AHIP, the insurance industry’s trade group, said it is reviewing the announcement, the Post reported.
UnitedHealthcare spokesman Eric Hausman said, “We are committed to working with CMS, ensuring seniors have access to affordable prescription medicines.”
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