Medicare Part D Premium Stabilization Ends After 2026

The Centers for Medicare & Medicaid Services will end a temporary Medicare Part D Premium Stabilization Demonstration after the 2026 plan year, a decision that could raise monthly drug-plan costs for some seniors in 2027.

CMS announced the decision on July 28, 2026, saying insurers now have enough experience with the redesigned Part D benefit to price 2027 coverage without the additional stabilization. The demonstration was created during the transition to benefit changes required by the Inflation Reduction Act.

What is changing

The Premium Stabilization Demonstration applies to participating standalone Medicare prescription drug plans, commonly known as Part D plans or PDPs. It reduced premiums for participating plans and limited how sharply some total premiums could rise from one year to the next.

CMS said the demonstration will end after calendar year 2026, returning standalone drug plans to traditional market conditions for 2027. CMS’s preliminary 2027 bid information includes a national base beneficiary premium of $41.33. That is a starting point used to calculate plan-specific basic premiums, not the amount every beneficiary will pay.

The Medicare Payment Advisory Commission reported that the demonstration lowered participating PDP premiums by up to $15 in 2025 and up to $10 in 2026. It also limited annual increases in total monthly premiums to $35 in 2025 and $50 in 2026.

Who could pay more

The effect will vary by plan, region and beneficiary. Some people enrolled in standalone Part D coverage could see higher monthly premiums in 2027 when the temporary support is gone. Others could see smaller changes or even lower premiums if their insurer changes its bid, benefits or pricing strategy.

The end of the demonstration does not establish one guaranteed increase for all Medicare beneficiaries. Premiums already vary widely among plans, and the final effect will depend on the coverage available in each beneficiary’s area.

The Associated Press reported that roughly 25 million Americans have Medicare Part D plans. AP also cited an average monthly premium of $36 in 2026 with the stabilization support in place and MedPAC’s estimate that the support offset about $16 of the average premium that year. Those figures do not establish what any individual beneficiary will pay in 2027.

What is not changing

Medicare Part D is not ending. The decision also does not eliminate the annual out-of-pocket limit for covered prescription drugs. AP reported that the cap was $2,100 in 2026 and is projected to be $2,400 in 2027.

The change is separate from the federal government’s Medicare drug-price negotiation program and does not by itself determine what any individual will pay for prescriptions or premiums.

When beneficiaries will know more

CMS expects to release final Medicare Advantage and Part D premiums and plan information in September, after insurers’ offerings are finalized. Until those figures are published, estimates about individual 2027 premiums remain incomplete.

Beneficiaries will be able to compare coverage during Medicare open enrollment from Oct. 15 through Dec. 7. In addition to the monthly premium, shoppers should review each plan’s drug list, preferred pharmacies, deductibles, copayments and estimated annual out-of-pocket costs.

The end of the temporary stabilization program is a pricing change, not a decision to end Part D coverage. For many seniors, the practical question will be whether their current plan remains the best value once the final 2027 prices and benefit details are available.

Sources

• CMS: Medicare Part D 2027 National Average Monthly Bid Amount Information
• Associated Press: The Trump administration is ending a Medicare drug subsidy program
• MedPAC: March 2026 Report to Congress