Millions of Medicare beneficiaries could face higher prescription drug plan premiums in 2027 after the Trump administration decided to end a temporary federal support program.
The Part D Premium Stabilization Demonstration reduced premiums and limited annual increases for participating standalone drug plans during the rollout of Medicare’s redesigned prescription benefit.
The program will end after December 31, 2026. Some beneficiaries may pay more afterward, but the effect will vary by plan, location, income, and medication needs.
Temporary premium support is ending
The Centers for Medicare and Medicaid Services created the voluntary demonstration for standalone Part D plans in 2025.
It was intended to prevent major premium disruption after federal changes placed more responsibility for expensive prescriptions on private insurers. CMS announced on July 28, 2026, that the demonstration would not continue in 2027.
The agency said insurers now had enough experience with the redesigned benefit to prepare reliable bids under the traditional Part D system.
The program lowered average premiums
The demonstration provided extra federal support to participating standalone prescription drug plans.
In 2026, it reduced the base premium used in plan calculations by $10 per month and limited a participating plan’s year-over-year increase to $50 per month.
MedPAC estimated that the program lowered the average standalone Part D premium by about $16 per member each month in 2026. That amounts to approximately $192 over a full year, but it was an average rather than a fixed discount applied directly to every enrollee.
Some members may face larger increases
Ending the demonstration removes both the additional premium support and its special limit on annual premium growth.
That means some plans may impose larger increases in 2027 than they could under the temporary rules. Insurers could also raise deductibles, change copayments, adjust covered-drug lists, reduce pharmacy networks, or withdraw plans from certain areas.
No single increase will apply to everyone. Some plans may raise premiums considerably, while others may make smaller changes or even lower their prices.
CMS Administrator Mehmet Oz has said that most affected members could see increases of less than $10 per month, but final plan-specific figures were not yet available.
Standalone plans are directly affected
The decision matters most to people who receive medical coverage through Original Medicare and purchase a separate Part D prescription plan.
About 24.9 million people were enrolled in standalone Part D plans during 2026, including individual and employer-sponsored plans. The average monthly premium was approximately $36, down from $39 in 2025.
Medicare Advantage members usually receive prescription coverage through combined Medicare Advantage drug plans. This demonstration did not cover those plans, although their premiums and benefits can still change for other reasons.
Other Medicare protections remain
Ending the demonstration does not eliminate Medicare Part D or reverse the program’s major drug-cost protections.
Beneficiaries paid no more than $2,100 out of pocket for covered Part D drugs in 2026. That annual threshold will rise with inflation in later years.
Federal law also limits growth in the national base beneficiary premium to 6% annually through 2029. CMS set that base amount at $41.33 for 2027, but actual plan premiums rarely equal the national base because each insurer uses its own bids and benefit design.
Low-income beneficiaries may continue receiving Extra Help with premiums, deductibles, and prescription costs if they qualify.
Premiums tell only part of the story
A plan with a low monthly premium can still become expensive if it charges a high deductible or places regular medications on costly tiers.
In 2026, nearly all standalone plan members were enrolled in plans with a deductible. Many also faced percentage-based coinsurance instead of fixed copayments for brand-name and nonpreferred drugs.
Beneficiaries should compare the total expected annual cost, including premiums, deductibles, copayments, coinsurance, pharmacy prices, and whether each prescription remains covered.
CMS plans to publish the finalized 2027 plan choices and average premiums in mid-to-late September. Members should then examine their Annual Notice of Change and compare options during Medicare Open Enrollment from October 15 through December 7.
TL;DR
- CMS will end the Part D Premium Stabilization Demonstration after December 31, 2026.
- The program supported standalone prescription drug plans rather than Medicare Advantage drug plans.
- It reduced average standalone Part D premiums by an estimated $16 per month in 2026.
- About 24.9 million people were enrolled in standalone Part D plans that year.
- Some plans could impose larger premium increases after the special support ends.
- Final 2027 premiums and local plan choices will be released in September.
- Beneficiaries should compare total drug costs rather than judging plans by premiums alone.
