CMS’s Decision to End Temporary Subsidies to Medicare’s Stand-Alone Drug Plans Could Mean Larger Premium Increases for Some Beneficiaries Next Year

(Author Juliette Cubanski for The Kaiser Family Foundation Published: July 29, 2026)

The Centers for Medicare & Medicaid Services (CMS) has just announced plans to end the temporary Part D Premium Stabilization Demonstration after 2026. The goal of the demonstration, which CMS originally stated could last for at least three years when it was established in 2024, was designed to stabilize stand-alone prescription drug plan (PDP) premiums and enrollment amid the rollout of changes to the Part D benefit under the Inflation Reduction Act. The IRA capped out-of-pocket drug spending for Part D enrollees and shifted more costs onto Part D plan sponsors, leading to higher expected costs and premiums, particularly for PDPs. Based on its evaluation of bids for 2027, CMS now states that PDP sponsors have gained “sufficient experience” to support bid development, suggesting that the extra financial support provided to PDP sponsors under the demonstration is no longer needed. Continue reading here…

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