Worth billions: Trump's dramatic decision and who it will affect

The Trump administration announced the end of the subsidy program for Medicare Part D drug plans at the end of 2026, with a subsidy of $3.6 billion per year. The decision is expected to affect about 25 million beneficiaries, with varying premium increases. Experts warn of significant price hikes in 2027.

The Trump administration announced Tuesday evening that it will end the subsidy program for Medicare Part D drug insurance plans at the end of 2026. The program, which provided $3.6 billion in subsidies to insurance companies this year, was intended to prevent a spike in premiums. The administration argues that the subsidy encouraged insurance companies to raise prices. The decision is expected to affect about 25 million beneficiaries: about a quarter are not expected to see an increase and may even benefit from a reduction, about 30% are expected to see an increase of less than $10 per month, and about 45% are expected to pay an additional $11-20 per month. Health experts warn that pressures on drug insurance prices will continue, partly due to increased use of expensive drugs like GLP-1s and changes from the Inflation Reduction Act. According to the Government Accountability Office, the program injected $9.8 billion into the market over the past two years. The advisory commission estimated that the program reduced the average premium by about 40% in 2025 and about 27% in 2026, so its cancellation could lead to a significant increase in costs.