Trump administration moves to end Medicare drug plan subsidies

The Trump administration plans to end Medicare Part D subsidies, a move that could raise monthly prescription drug costs for many of the 25 million seniors on the plan. An official projects 45% of enrollees will see premiums rise by $11-$20. The administration claims the move will curb insurer rate hikes, but it comes as Trump has also proposed other cuts to Medicare despite promises not to do so.

Medicare Part D subsidy elimination

• ▪A Trump administration official claimed the subsidies had encouraged insurers to raise rates.
• ▪The government will stop providing billions in subsidies to insurance companies for Medicare Part D plans after 2026.
• ▪The Trump administration plans to end a subsidy program that helps lower costs for Medicare prescription drug plans, known as Part D.

Premium increases for seniors

• ▪A Trump administration official projected 45% of enrollees would see a monthly premium increase between $11 and $20.
• ▪Approximately 25 million people have Medicare Part D plans, with an average monthly payment of about $36 in 2026.
• ▪The same official projected 30% of enrollees would see a monthly premium increase of less than $10, while 25% would see premiums stay the same.
• ▪Medicare recipients will learn of their new rates in the fall, around the time of the midterm elections.

Broader affordability pressures

• ▪The Trump administration has previously overseen a price increase for some 700 prescription drugs covered by Part D plans.
• ▪Americans are also facing rising costs for groceries, utilities, and gas, while health insurance premiums have outpaced wage growth.

Trump Medicare funding contradictions

• ▪Trump's "One Big Beautiful Bill" is set to reduce Medicare funding by an estimated $500 billion over the next eight years.
• ▪In 2026, Donald Trump stated it was "not possible" to keep paying for Medicare, though the White House later removed a recording of these remarks.
• ▪Donald Trump has repeatedly claimed he would not cut Medicare funding.

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